Controlling food and labor costs is one of the most serious tasks that need to be taken seriously by every foodservice business proprietor. With careful menu planning, sales forecasting, and effective staff training, a restaurant or a bar can prevent overspending on personnel and supplies and still provide excellent quality dishes, cocktails, and services. Using numerous techniques for planning, controlling and evaluating operation, you can continuously manage these costs to ensure you remain profitable without sacrificing your brand’s standards.

Let’s now review some appropriate techniques for better food handling and efficient cost control:

Perform Food Cost Calculations

The first step in controlling foods costs is to determine what they are. You can do this by calculating the expense of each ingredient that goes into each dish. The rule of thumb within the foodservice industry is to maintain a 30% food cost, or less. Apart from the above-mentioned industry rule of thumb, owners should do some research for their specific type of business to know what their exact percentage of food cost is.

Reduce Waste and Theft

Use ordering, inventory techniques and applying security rules helps reduce food from going bad or being stolen.

Buying in bulk saves you money but can lead to spoilage of fresh foods. Instead, work with your purveyors to buy in bulk but remember to receive orders in more than one shipments, based on your regular order schedule.

Keep track of daily and monthly traffic to better project demand and prepare for sales peaks and valleys.

Record how many dishes or cocktails are returned each service and why, and how many meals or beverages you comp or replace to determine if the problem is a particular employee or one or two menu items you need to retire. Additionally, require servers or cashiers to check each menu item against the corresponding ticket to prevent orders from going out incorrectly.

Track Your Food Cost and Inventory

You have to track food costs on a daily basis so that you will be able to know levels of profitability in your operation. This gives you the ability to decide on your next moves on a slow month, to formulate promotional activities, to adjust your ordering, to determine which dishes will remain on the menu or the menu items that need a rest. It’s a very organic and flexible methodology, but one that works.

Order Wisely

Κnow what you need and how much—something that keeping inventory will tell you. Keeping track of the amount of goods stored in your business every month, comparable with the amount of goods bought and the menu items sold, will give you a good lead on what to expect on gross profit margin.

Avoid Menu Price Increases

Raising menu prices is a last resort or not an option at all. I believe that it shouldn’t be an option. You have to try to reconstruct the menu item to include less expensive ingredients. Every food service facility must try to have rules with maximum prices or distinctive price points so guests don’t feel uncomfortable going.

Just remember to treat food cost as a living and breathing thing, a factor that still plays a crucial role in the living and breathing of your business entity.

Now, let’s try to dig a little deeper in controlling labor costs.

Before you can develop appropriate and effective measures for labor cost control, you must gather the necessary information on which to make your decisions. Therefore, the accumulation and reporting of relevant labor cost information is critical. To do this, you need more than your calculator; you need to look around you.

On that count, employees cannot be viewed and treated as “inputs” without feelings, needs, and fears. You have to remind yourself that the two most important groups of individuals affecting your business’s success are the customers and the employees. Both must be given the same respect and appreciation.

So, you cannot control labor cost until you understand that you are not “scheduling” people but rather “purchasing” the potential to do work. That’s why you have to always spend time in knowing more about their personal lives, their abilities, their potential, and these special characteristics of their personality.

Schedule Staff Efficiently or Purchase the Potential to do work

Review your expected tables for each service during the week and mix your staff to ensure you don’t end up with all rookies during one lunch rush and all veterans during a slow dinner. Have fewer staff members for set-up, shift change and takedown than during a service to minimize your costs. To keep costs low on slow nights without losing staff, offer a cancellation fee to staff you schedule but send home. You’ll pay staff for not working, but pay less than if they had stayed doing little or no work.

Cross-Train Staff

The more each staff member can do the more productivity you’ll receive from each. Slow service can doom a foodservice facility as customers leave or make the decision not to return. Train your prep cooks to prepare menu items or managers and bus staff to serve diners to help out during rush periods.

Hire Talents

Restaurants rely on repeat customers and sales of non-entrée items to maximize revenues. Paying the least amount for dining room staff can lead to a frequent turnover and poor customer service. Consider paying high-quality, trained staff more and teach them to know how to sell specials, upsell appetizers, desserts, and drinks, remember regular customers and their preferences and work with your kitchen staff to get orders in and out quickly.

No food service facility expense is untouchable when searching for ways to save money. It all depends on the business and the effects of cutting costs. Finding alternative purveyors with competitive selling prices, cutting back on spending in energy consumed, restructuring your menu in order to generate better profit margins, reducing operating hours, renegotiating lease can all lead in reducing fixed costs or minimizing the effect variable costs have on profit .


Boost Restaurant Labor Productivity to Manage and Control …. (2017). Retrieved on May 16, 2017, from

How to Control Cost of Food & Labor in a Restaurant Service …. (2017). Retrieved on May 16, 2017, from

Tips and Tools for Controlling Your Food Cost | (2017). Retrieved on May 16, 2017, from