5 Ways to Cut Overhead Expenses When Starting a Restaurant

Starting a restaurant can be one of the most challenging businesses to open. Most restaurants fail within the first year. The main reason why they fail is because they run out of money before they start to become profitable. Indeed, in the restaurant business, it is all about survival of the fittest – or the tastiest, for that matter. When it comes down to it, there are a number of ways to cut overhead expenses – without sacrificing the quality of the food. No matter how much money you save, one bad review and you could wind up going out of business. Here are five ways to cut overhead expenses when starting a restaurant.

  1. Cut down on interior decoration costs. When it comes down to it, you don’t want to funnel most of your startup cash flow into the decor of your restaurant. Many burgeoning restaurateurs think they need to spend a lot of money on making their restaurant look more impressive. In fact, you should be focusing on your food and employees – the rest will come later. Plus, giving your restaurant a barebones aesthetic may actually impress people.

  2. Save money on training. When it comes down to it, you don’t want to spend a fortune on training your employees and managers. You want to hire employees and managers that have extensive knowledge of the industry already. If you need to train employees – especially the kitchen staff – you may want to get a My National Grocers membership and look into ways to train your employees for less money. Another option is to train employees yourself and then let them learn on the job. Oftentimes, these methods can be more successful than hiring consultants and managers.

  3. Evaluate your menu and edit accordingly. Sometimes, your menu may be too big to be profitable. So, make sure that you offer plates that are filling, but that aren’t in excess. Plus, you want to add plenty of sides, starters and a good dessert menu. Having options is important, because that way patrons will save room for other dishes. Moreover, you may want to offer a list of the day’s specials as well.

  4. Find a space for your restaurant that isn’t in the most popular part of town. If you are starting your first restaurant, you want to make sure that you don’t rent space in the busiest and most bustling part of town. This can often put you in the position of paying an arm and a leg for rent. If your food is good, patrons will drive or walk out of their way to visit your restaurant.

  5. Save the take-out menu for later. When you first start a business, you want to wait to introduce your take-out menu. When it comes down to it, setting up the infrastructure for take-out can be expensive – mainly because of the permits and the insurance. So, if you are a new restaurant, you may want to wait until you are profitable to offer take-out. When your business is rolling in the money, you could offer a take-out menu.