If you’ve ever spoken to someone who runs a successful restaurant about some of the things that you need to do to make sure that your own goes well, you probably were told things like make sure you offer great customer service, create some signature items for the menu and also, don’t forget to stick to a tight budget for the first five years.
When it comes to that last tip, the reason why is because according to many reports, approximately 50 percent of all new businesses end up closing their doors within the first five years, mainly because of how expensive it is to run a company.
So, when it comes to looking for effective ways to minimize costs as it relates to starting up a restaurant, we have provided you with five great tips below:
Lease space rather than buying it. Although we can understand why you think it would be great to own your own property, the reason why we recommend leasing instead is because by taking this approach, not only is it cheaper, but you can also deduct it comes tax time. And anywhere you can get a break on your taxes is definitely something worth considering.
Buy used equipment. When it comes to outfitting your kitchen, there is plenty of great equipment to choose from. Just remember that a lot of it costs thousands of dollars. That’s why it really is best to purchase used items rather than new ones. Also, try and buy equipment that has the Energy Star label on them. They are created to be energy efficient and that can save you as much as 30-40 percent annually on energy costs. You can learn more about Energy Star appliances by going to EnergyStar.gov.
Pay what you can in cash. There are definitely going to be some things that you’ll need to pay for with credit cards simply due to the price tag that comes on them. But whatever it is that you can pay in cash, make a point to do so. Remember, credit cards come with interest and so if you’re always relying on them, there’s a pretty good chance that they could keep you in debt.
Use local produce. By opting to use local produce rather than paying to have certain things shipped to you from other states, it saves you time and money, plus your produce tends to be fresher. And, as an added bonus, it’s also a great way to support your local farmers as well.
Do some things yourself. If you were to ask a consulting company like Gilkey Restaurant Consulting Group what they’d recommend for cutting costs for your restaurant business , they would probably tell you that you should do as much as you can yourself. For instance, when it comes to the decor of your restaurant, while it actually is a good idea to hire an interior decorator for consultation purposes, after you get an idea of how the place should look, use some of your family members and/or friends to help you paint, hang up treatments and bring in furniture. And if there are little projects that need to be done, remember that websites like HGTV, Bob Villa and DIY Network can walk you through how to do a lot of them. That way, you can put the money that you would spend paying someone else to do certain things back into running your restaurant.