Boosting Restaurant Profit Margin: Cut these 3 Common Costs

Increase profit margin concept. Businessman plan (predict) profit margin growth represented by graph.

Saving money is top-of-mind for many business owners and operators, and restaurants are no exception. Operating costs quickly add up and can take a huge bite out of your restaurant profit margin. The good news is your operations can take several small steps to help save money and improve overall profit. Here are three common costs that you can cut in your restaurant with ease:

1. Food Waste Costs

When it comes to running your restaurant, you know that one of your biggest expenses is ensuring you have the ingredients your cooks need to create the dishes on your menu for your customers. You want to make sure to order enough ingredients to run your business, but not so much that it goes bad before it gets used, cutting into your restaurant profit margin.

Here are some tips to help cut down on food waste costs:

  • Create a one-page prep list to ensure cooks prep the right ingredients based on what is needed for each shift.
  • Make use of products where possible: turn old, bruised fruit or vegetables into smoothies, stale bread can be made into croutons, and yesterday’s house veggies can be added into today’s vegetable soup.
  • Create a first in, first out system where the oldest ingredients get placed in front of new ones on shelves or in the cooler.
  • Use an integrated kitchen display system to help with inventory management. This can help you gain visibility into your inventory supply and generate a bigger restaurant profit margin from reducing waste.


2. Utility Costs

Restaurant utilities can be costly, especially if your restaurant runs ovens, fryers, dishwashers, and other appliances. However, you can boost your restaurant’s profit margins by cutting out unnecessary utility costs. Consider investing in energy efficient appliances and updating lighting to energy efficient fixtures and LED solutions to help reduce electric costs.

Train your employees to turn off any unnecessary lights or install motion sensors in areas such as walk-in coolers, freezers, and restrooms where constant light isn’t needed. Also consider creating automatic ventilation systems to keep employees comfortable working in the kitchen. These will help you save money, create a more sustainable restaurant environment, and boost your restaurant profit margin.


3. Labor Costs

Other than costs of products to prepare meals, labor is one of the most costly aspects of running a restaurant. Employee turnover is a pain point for many operations and can cost restaurants $146,600 annually, which cuts deep into your restaurant’s already tight profit margin.

Incentives such as benefit packages, mentoring opportunities, and offering a healthy work/life balance can keep employees happy and more likely to stay with your restaurant for a longer period of time. An employee reward program can also boost employee morale and make them feel valued.

To reduce overall labor costs, consider implementing self-ordering technology in your restaurant. These touch screen solutions are sleek, attractive devices that allow guests to browse and order meals. Not only is this a fun, interactive way for guests to experience your restaurant, but it also frees up more servers to cover a larger area of the restaurant.


When it comes to how your restaurant operates, no one knows your needs quite like you do. Making sure you are operating at an optimum level while also ensuring profitability is key– especially if you can boost your profits with the right solutions.

Contact WaveSoft today and see how we can help cut your operating costs and boost your restaurant profit margin with the technology and tools your restaurant needs.