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5 ways a QSR can save money without spending a dime

Being in the restaurant business is one tough and often expensive enterprise. Making the most of what you have can make a big difference in how much money you can make.

March 28, 2016 by Jeff Rebh — President and CEO, Innoseal

By Jeff Rebh, president and CEO, Innsoeal

Being in the restaurant business is one tough and often expensive enterprise. You're faced with some of the smallest profit margins out there, averaging 4-7 percent. Simply put, you have no time or money to waste. Making the most of what you have can make a big difference in how much money you can make.

Here are a few tips on how you can save big-time without having to pull out your own wallet.

Scheduling

Workforce management experts say scheduling your hours more wisely can save you nearly 30 percent in annual labor costs. With smart planning, the majority of the problems regarding scheduling for maximum profitability and meeting employee needs can be avoided.

Hiring more employees with flexible availabilities helps managers to schedule around the demands for coverage during high volume shifts and unexpected life events. The mistake most employers make is by holding real-life variability too accountable. Real life isn't predictable for operators nor their employees. Employers who fail to acknowledge that typically pay the price in high levels of turnover and absenteeism.

Employees should be encouraged to post schedule conflicts or swaps on an online Google drive spreadsheet so everyone can see what shifts are available and who is looking to pick up or get rid of any hours.

Cross training

Cross training is a very effective way to balance a quick serve's needs for both flexible staff members and an employee's way to become more valuable to the company.

"If we have catering orders to be delivered in the morning, we'll need more people who can work both the breakfast and lunch line; I won't need so many scheduled just for breakfast," said Eugene Fuller, director of operations at Chick-fil-A in Atlanta.

Using cross training methods helps keep the cost of labor low by scheduling employees who are more versatile and able to do an array of tasks around the restaurant. Having employees who are only trained to perform specific tasks limits their involvement in store operations and can cause restrictions in your day-to-day scheduling.

Limit deliveries

It's a huge imposition in both labor costs and store costs to receive multiple deliveries in a given week. If possible, cut back to one delivery per week and only request what you need. Receiving one delivery per week can reduce the labor costs by freeing the need for staff to work on organizing and stocking those deliverables. It can also create an opportunity to negotiate for lower prices when you only purchase from one supplier.

Menu lineup

Your menu lineup may be a reflection of your quick serve's best dishes followed by your more common selections. However, one study shows that a restaurant can save nearly 25 percent of food costs as well as gain an additional 20 percent in monthly net profit just by changing the menu position of their dishes, said Aaron Allen of Aaron Allen & Associates, a restaurant consulting firm.

Other studies using eye trackers show that the middle of a single page or landscape-grouped menu is where most reader's eyes go when they are looking to place an order. Placing the items that drive better margins in the middle of the menu can easily boost revenue without having to do anything else.

Workers' Compensation Insurance

Workers' Compensation Insurance is an annual calculation based on a forecast of the upcoming year's labor costs. When the economy tends to slow down, oftentimes that insurance forecast is not recalculated. What later happens is insurers go to re-sign a business for an additional year and the operators neglect to update their labor figures. This creates outdated and inflated projections that are not a true reflection of the insurance forecast.

It's imperative to update the labor figures with your insurance providers on an annual or semi-annual basis to gain an accurate reflection of your quick serve's insurance needs right away.

If big savings is the goal, then these five tips should help build a bigger bang out of your buck. Cutting costs does not always mean cutting corners and cutting employees in the process. These are easy and practical approaches that help save money as well as push your QSR's team forward in the process.

There's no "I" in team, and coincidentally there isn't one in "restaurant" either.

Jeff Rebh is president and CEO of Innsoeal, an international manufacturer and distributor of tamper-evident bag-sealing solutions. 

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