The restaurant business certainly looks glamorous, but did you know that 60% of restaurants close in the first year and 80% within 2-3 years. One of the main reasons for closure is an inability to control costs. For food businesses, cost is king. However, owners often find it difficult to cut costs without compromising quality. That’s why we spoke to Dr. Chanikarn Wongviriyawong, CEO and Founder of EATLAB to get her tips on reducing food costs while still maintaining quality.
Budget-friendly does not have to mean low-quality. By shopping around and purchasing ingredients from different suppliers you can maintain quality at an affordable price. The best place to buy budget-friendly ingredients is from local suppliers or produce centers. It might take time but the pay-off will make it worth it.
Developing a new dish from ingredients you already have is another clever idea. Ideally many dishes on your menu will share core ingredients in order to reduce food costs and waste.
First In, First Out is commonly known as ‘FIFO’. It’s basically an asset-management and valuation method that every restaurants owner should apply to their business. You simply stock your fridges and freezers with older food at the front so that you can use it first and avoid food waste. This is also essentials for maintaining freshness and quality.
You should manage ingredients according to sales. For example, if steak is more popular during the weekend, then you should order more for the weekend. Similarly, you should reduce the stock of less popular ingredients. If you record the number of each dish you’re selling, you will quickly identify a pattern and it will be easier to manage the buying of ingredients.
A cost analysis program like EATLAB can help restaurants extract actionable insights to improve service quality, pricing and promotions. It will equip restaurants with the AI capability to understand customers, and optimize profits using data. This is a really easy-to-use and effective program that every restaurant should have.