Article by – AllaboutFnb.sg – Everything your Food Business Needs
This article focus on Ways to Reduce F&B Business overheads for the Singapore Market. Most of the content stays relevant for F&B establishments all over the world. The next article will be on How to Increase Sales.
Kudos to You in the F&B industry, bringing passion and great food to the community. Being in the F&B industry is a great challenge for many business owners. For many of those who think that F&B is an anytime business and that a café, restaurant or eatery can be easily setup with money, one may end up potentially defeated with an empty pocket sooner than they think.
All F&B business faces challenges and it all depends on whether you have any innovative ideas to turn things around in the little red dot. Overhead Reduction and Increase Sales are the 2 main factors that will make or break the game.
You could probably be stuck in a dilemma situation. There are sales but maybe just barely enough. Overheads such as man power cost, levies, rental, raw materials etc are constantly increasing. Customers complaining that the food is costly and not exactly unique. Before you throw in the towel and finally call it quits, we hope this article may help and provide you some solution which you may have not considered about.
Business efficiency improvement can trim F&B overheads.
- Implementing a self-ordering kiosk or ordering tablet would help to reduce fixed salary of at least 1 to 2 waiters or reassigned them to much needed area. Business can tap into SPRING SINGAPORE – Capability Development Grant for this project.
- A paging system for diners to collect food themselves is another way to reduce your manpower cost
- Gather a pool of part time waiters during the peak hours, although they are paid higher per hour but you are paying them the amount of money for a few hours of their work. The low peak period can be handled by your full timers.
Tip: run a few trial for the part timers with your existing full timers before you start to trim the overheads
- Cross-train your people, a waiter can be train as a runner and a kitchen assistant can be a waiter. Cross training doesn’t reduce the manpower overheads but maintain the efficiencies of your business when staff goes on leave, one way or another.
- Encourage Split shift with allowance if staff are working throughout the day.
- Automated equipment to reduce the manual work inside the kitchen. This depends on what type of restaurant you are operating and what work can be outsource to make it more efficient.
- The more efficient the process, the less people you will need to get the same amount work done, if not more.
- Hiring older Singaporeans in your establishment is another way which could save work levies and you could be rewarded by the government “Special Employment Credits” scheme till 2019
The ideal supplier rather than the cheapest or most expensive supplier.
- Reliable Suppliers are extremely important as they are dependable and stable. Imagine how sales could be affected if you start your kitchen an hour later because the supplier is stuck in traffic.
- Identify your position. Do you acquire your product 1st hand from manufacturer, 2nd hand from supplier or 3rd Hand from distributors? The last one is of course the most expensive as you are paying for 3 parties services and profits before yourself.
- Compare price of the suppliers. The concept of “expensive = better” doesn’t applies to everything however if you pay peanuts, likely monkeys will come. There is a reasonable price to pay for materials and what makes the price differences at the end of the day are the supplier business efficiencies, loyalty customers price and wholesale quantity.
- Tip. Some manufacturer delivers if your restaurant is near to them at a min quantity.
- Maintain good relationships with suppliers goes a long way in pricing.
Do you check your wastage in Food and Utilities?
- Brain Storm – Is there a need to turn on the storeroom lights 24/7. Does the exhaust have to on throughout the entire business hours? Do you need that many A/C to be on? Why keep the gas on to keep the food warm? These are some of the questions which perhaps you can think about it and the solution could be free. It may seem trivial but could potentially saves a couple of hundreds to thousands a year in Utilities overheads.
- Equipment – are your equipment high in energy consumption, check them out and replace them when their lifespan is near with better energy efficient equipment. You may consider to user LED lights for better cost savings.
- Food waste – Do you throw away lots of food because they have gone bad? In a kitchen where there are so many types of ingredients to purchase, will it be possible to remember what have been purchased and remains? Track your food supplies inventories. There are POS systems with material tracking functions embedded and waste can be reduced significantly.
- Water Splurge – Some establishments install interchangeable water outlet head. These can control the water output capacity with lesser wastage.
End of Part 1. Click Here for Part 2