Strategies to Reduce Operational Costs in Italian Restaurants

High operational costs make picturesque location, friendly ambience and terrific cuisine worthless.

Keeping operating costs to bare minimums in Italian restaurants is key to their long-term financial health and often their survival. The ability to curb unnecessary spending and pinpoint only the most critical outflows is many Italian restaurants' salvation in bad times and source of massive profits in better times. Certain strategies can reduce their operational costs.

Problem Area Identification

Menu prices relate to ingredient prices.

The source of most operational cost overruns is born in the kitchen and back of house (BoH), and they become evident in quarterly financial statements. The greatest economies in Italian restaurants also are in the kitchen and BoH.

In the kitchen, preparation is everything. A blending and portioning operation is the cornerstone of a kitchen management system. Effective systematization is crucial to efficient operational planning. Knowing your Fettuccine Alfredo dinner's ingredients cost $1.40 per plate, you can comfortably price the dish at $14 on the menu with plenty of room for discounting. With this knowledge, you easily can offer a Fettuccine Alfredo lunch special with less volume and price it lower.

Inventory Control

Superior planning and organizational skills are powerful tools.

You can save money in inventory control. If you don't handle purchasing and vendor relations personally, keep your eyes on the negotiations. For example, ensure vendors can fulfill each restaurant's daily consumption of produce, freshly baked goods and outsourced dough. Employing the small-batch production method, a good vendor will accommodate your product demand with daily and semi-weekly rapid-replenishment system deliveries, resulting in reduced spoilage because you will sell everything you produce. Like the just-in-time system, the rapid-replenishment system stocks inventory for delivery per demand consumption. It ensures you receive only what you need when you need it, with flexibility to accommodate changes in demand quickly.

Savings Opportunities in Marketing

Identify highest performing marketing mediums to determine lowest cost per customer.

While Italian restaurants can't eliminate marketing, focusing on only methods that previously produced results obtains the most from marketing dollars. A mixture of newspaper display advertisements, radio spots, direct mail and a website may have traditionally paid off in more covers for the restaurants, but that mix isn't inexpensive. When the budget is tight, look for media alternatives that keep each restaurant's name "top of mind" without tying up bundles of cash. During tough economic times, door-hangers traditionally produce consistent results for Italian food/pizza delivery businesses. All online activities provide inexpensive local exposure.

Second Income Through Catering

Once a lean operational model works, catering can boost the bottom line.

Many Italian restaurants make a significant second income from catering operations. The more channels through which you sell products that come from same-store operations, the more you reduce operational costs.

New Product Development

New product development isn't immediately considered as a means to reduce operational costs. If you can deliver an existing product in different packaging, however, you may hit a home run. Offering customers the "better quality" option, the "ease of use" option or the "lower price" option could provide numerous spin-off opportunities. Jars of the house marinara sauce, bake-at-home pizzas and heat-and-eat meals are a few opportunities.