High start up and operational costs can oftentimes make running a restaurant feel like a bottomless money pit. As a result, restaurant owners are constantly looking for new methods of saving money without having to skimp out on quality.
One of the first methods restaurant operators turn to is usually trying to lower their food cost. While this strategy might work for a while, ultimately a restaurant's food cost should only account for about 25% of total expenditure. Meaning, the other 75% of money flowing in and out of a restaurant also needs to be considered and optimized.
Below is a typical restaurant cost structure for a medium quick service restaurant.
Restaurant Cost Structure:
- Marketing - 10%
- Rent - 10%
- Labor - 15%
- Overhead - 20%
- Food Costs - 25%
- Net Profit - 20%
As seen above, average food cost shouldn't go above 25% of your total restaurant costs. If you've already taken the time to pinpoint the causes of your high food cost, and experimented with food cost saving ideas, your efforts aren't entirely wasted.
There are numerous other outlets within your restaurant to save money. Namely, labor, overhead, and marketing. This article will go over a few simple changes you can make at your restaurant today that can make a world of difference in terms of savings.