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Top 3 Tips to Reduce Restaurant Operation Costs in 2014

From mandated insurance to increased minimum wage, the year 2014 will be marked by significant legislation directly impacting restaurant operators. The Affordable Care Act (ACA) will usher in a new wave of employee health care policy. On top of that, minimum wage initiatives for tipped workers have gained footing in many states. Luckily, there are easy adjustments you can make to save on labor, avoid ACA penalties, and cut down on overall costs. Cheers to a profitable New Year!

1. Don't Ignore the Affordable Care Act

Now that the Affordable Care Act is in effect (as of January 1, 2014), you could be hit with penalties costing up to $2,000 per employee for failing to follow its mandates. The ACA affects both large and small businesses, particularly impacting the benefits of "full-time equivalent" employees at your business. Due to the nature of foodservice jobs, it can be tricky to determine who qualifies as full-time or not.

  • Compile data to determine the status of seasonal employees and those whose work hours vary. Talk to your financial adviser to see if you need to combine employees in multiple entities under “common control.”
  • If you average 50 or more “full-time-equivalent” employees on business days in 2014, you're considered a large employer for 2015. This means that you face penalties if you fail to offer health plans to full-time employees and their dependents.
  • Employees will face a mandate requiring them to obtain coverage in 2014. You’re required to give your employees written notice about government-run exchanges if your business is covered by the Fair Labor Standards Act.
  • If you employ fewer than 50 full-time-equivalent employees, you are not required to offer health benefits, so employer penalties do not apply to you. However, other parts of the law will still affect you.
  • If your business is small enough to meet certain conditions, you could qualify for a tax credit to help you pay for employee coverage.

2. Save on Labor with Equipment

Employee labor costs are one of the largest expenses that foodservice operators incur. This year will be particularly challenging, with ACA benefit mandates and minimum wage initiatives calling for a pay increases up to 40%. You may have to cut back on employee hours - and possibly the amount of employees hired. Consider investing in labor-saving equipment to pick up the slack.

  • A versatile combi oven offers three cooking modes (convection, steam, and a combination of both) to roast, grill, bake, and poach entrees without sapping them of moisture. For smaller scale operations, consider a rapid cook microwave oven to prepare foods up to 15 times faster than conventional cooking methods.
  • Constantly boiling items? A commercial steamer will let you prepare bulk batches of veggies, starches, and soup.
  • Food processors can save you hours of slicing and dicing in the kitchen. Commercial vegetable and fruit cutters will quickly chop tomatoes, potatoes, and everything in between.
  • Depending on your daily volume of dirty dishes, a commercial dishwasher can eliminate the need for washroom staff. For busy bar nights, a glass washer machine will help keep up with glassware cleaning when you're short on servers.
  • Sous vide cooking provides precise temperature control to deliver consistent food finish each time it's cooked. So even if your chef is out of town, you can still cook a vacuum-sealed steak to their standards with the right sous vide settings.
  • Cross train your staff. This allows you to schedule fewer workers without skimping on productivity. Train prep cooks to handle the grill, hostesses to work as back-up servers, and bussers to help run food to customers.

3. Keep Track of your Bottom Line

Adhering to the “waste not, want not” adage can slowly add up to thousands of dollars in savings. It can be as simple as adjusting the temperature of your dishwasher.

  • Monitor your tabletops and make adjustments to inventory and portion control. For example, use napkin dispensers rather than offering napkins by the handful, and don’t overfill baskets of chips.
  • To save on utility costs, turn the lights off in backrooms when things are slow.
  • Cut down on water costs with a few simple adjustments. Fill every dishwasher rack rather than running small loads. Turn your dishwasher off at night (most high temp dishwashers have built in elements to keep tank water hot). Tankless water heaters can help save on energy costs by eliminating standby losses (energy that is wasted when heated water sits unused in a tank). Thaw food in your refrigerator rather than under running water.
  • Conduct a waste audit. Roughly 4-10% of all food purchases become pre-consumer food waste. How often are you tossing food? The solution can be as simple as purchasing color coded food labels to keep track of perishables in your kitchen.
  • Posted in: Management & Operation | By Kim O'Brien
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