Why Controlling Costs Can HURT Your Business

In the world of bars and restaurants, as owners and managers, controlling costs is a repeating mantra that will forever be scarred into brains.

However, let me make one thing clear:  when I encourage you to control costs, it is not to the detriment of quality or customer experience. Costs can only be lowered so much. You cannot sacrifice quality in order to meet a bottom line goal or your business will suffer for it.

The over-simplified reason:  your business is only as good as its reputation. If you have fruit garnishes that are shriveled and fermented, or salads coming out with wilted lettuce, people will not come back no matter how good the service is, not to mention the tales of horror they are going to share with their friends and acquaintances. You have to pay for quality ingredients and you have to pay for quality employees.

This means not trying to find the cheapest quality food from your vendors just so you can lower your food costs, because in the meantime your guests are chewing on rubbery fish and chips and dog food hamburgers. It’s not worth it. Even if you’re not interested in being a 5-star restaurant and you’re a simple dive bar serving corn dogs and nachos. Get good quality corn dogs and nachos at a reasonable price.

This is where creating a cost effective menu comes into play, especially if you’re stressed out about food costs. If wings are costing you $0.75 per wing wholesale and you can only reasonably sell them for $1 apiece on the menu, then that 25% profit does not make putting wings on the menu a very smart choice. It doesn’t mean find cheaper, shittier wings from the trunk of a Buick. It means, unless your name is Buffalo Wild Wings, that you find something else on the menu that is more cost effective, like nachos, and then make sure it’s good quality.

Controlling costs when it comes to labor also causes your business to suffer on a level of quality when it comes to guest experience. Watching labor costs is extremely important, especially when it comes to overtime, but if you cut employees too early, or don’t schedule enough in the first place, the service will not be exceptional, and without exceptional service nobody will come back and you won’t have to worry about overscheduling or labor costs ever again because there will be no people to serve.

Got it? Fantabulous.

Cheers, until next time,


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