Are your profits getting eaten up because of high utility costs? Do you even have any idea how much you can save on your utility bills? Higher utility costs in restaurants are an issue that most restaurant owners I know face. But they make timely decisions to stop splurging on them. If you don’t know how to do it then this blog is for you. We have discussed in detail how you can cut your utility bills and how much profit you can make through this.
What are Utility Costs?
Utility costs are the recurring expenses associated with essential services that keep your restaurant operational. These costs can vary depending on factors like the size of your restaurant, the equipment you use, and your operating hours. Being mindful of these expenses and understanding their impact on your budget is crucial. Monitoring and managing utility costs not only helps you save money but also contributes to a more efficient and sustainable operation.
How Much Do Most Utilities Cost?
The cost of utilities can vary depending on the size and type of your restaurant. On average, utility costs make up about 5-10% of a restaurant’s total expenses. In Malaysia, the average utility bill for a restaurant can range from RM3,000 to RM7,000 per month. Electricity is usually the biggest contributor, making up about 60-70% of this cost.
Water and gas together often account for another 20-30%. If you’re spending more than this, it might be time to look into reducing your utility costs.
Examples of Utilities in a Restaurant
In a typical Malaysian restaurant, utilities include:
- The electricity that powers your refrigerator to keep fresh produce.
- The water used to wash dishes and clean the dining area.
- Gas for cooking popular Malaysian dishes like nasi lemak or char kuey teow.
- Waste management services that handle leftover food and packaging.
- Internet to facilitate delivery orders through platforms like EasyEat.
All of these are essential for daily operations, but managing them wisely is the key to savings.
Practical Ways to Reduce Utility Costs
Reducing utility costs doesn’t mean compromising on quality. It’s about finding smarter ways to operate. Here are some strategies you can implement:
1. Upgrade to Energy-Efficient Equipment
Investing in energy-efficient equipment may seem expensive at first. However, it reduces electricity usage over time. For example, energy-efficient refrigerators and air conditioners consume less power. According to a study by the Malaysian Green Technology Corporation, using energy-efficient appliances can lower electricity costs by up to 30%.
2. Conduct Regular Maintenance
Regularly maintaining equipment ensures they operate efficiently. For instance, cleaning your air conditioner filters or servicing your kitchen hoods can improve performance and reduce power consumption.
3. Train Your Staff
Educate your staff about energy conservation. Simple actions like turning off lights in unused areas or ensuring water taps are fully closed can make a big difference. You should teach your chefs about food wastage too so that they don’t end up wasting a lot of ingredients. Creating an energy-conscious team can save up to 10% on utilities.
4. Use Smart Technology
Smart thermostats and timers can automatically control air conditioning and lighting. This ensures energy is used only when needed. In Malaysia, smart technologies are becoming more affordable and accessible, making them a great option for restaurants.
5. Negotiate with Service Providers
You can also negotiate rates with utility providers. For instance, you might secure lower electricity rates during off-peak hours. This can be especially helpful for your restaurant if you operate during later hours or weekends.
6. Monitor and Optimize Water Usage
Installing low-flow faucets and water-saving devices reduces water wastage. Additionally, recycling water for tasks like cleaning outdoor areas can help.You can use the water used to wash vegetables to clean the floor or you can just pour that water into the flush tank.
How EasyEat Can Help You Reduce Utility Costs
Since the biggest contributor to utility costs is electricity you can save electricity using EasyEat. I’ll tell you how. EasyEat lets you monitor the status of tables, that is you can see which tables are occupied at a given time. Then you can go and switch off the fan or Air conditioners in that particular area when nobody is there. You don’t have to have a multi-floored restaurant, even if your restaurant is small this can be an efficient way to save some utility costs.
Next, you can avoid food wastage using the smart inventory management feature of EasyEat. You will know when you’re running out of stock and when you’re full. This will help you in avoiding over-ordering which will eventually be wasted. Now that EasyEat has collaborated with the food market hub you can even enjoy the privilege of getting smart inventory reports that can help you make decisions based on data.
FAQs About Utility Costs
- What is the average utility bill for a restaurant?
In Malaysia, the average utility bill for a restaurant ranges from RM3,000 to RM7,000 per month. Electricity is usually the largest component, contributing up to 70% of the total bill.
- What are examples of utilities in a restaurant?
Examples include electricity for lighting and equipment, water for cleaning and cooking, gas for stoves, waste management services, and internet for online orders.
- How much do most utilities cost?
Most restaurants spend 5-10% of their total revenue on utilities. This includes electricity, water, and gas. Monitoring these costs closely can help you identify areas to save.
- What is included in the utility costs?
Utility costs include electricity, water, gas, waste management, and communication services like internet and phone. These are essential for the smooth operation of your restaurant.
Managing utility costs in your restaurant doesn’t have to be overwhelming. By understanding what makes up these costs and taking proactive steps to reduce them, you can improve your profit margins. Platforms like EasyEat can play a significant role in helping you achieve these savings. You would’ve learned it above and now its your time to implement these steps. Hurry up and get more profits just by reducing your utility costs.
