Every penny counts when it comes to cutting costs at restaurants—operations average only 5 to 6 cents profit on each dollar, according to National Restaurant Association research. Here are some ways to teach employees about restaurant expenses and make them partners in your efforts to reduce costs.

• Show them the money. To help employees understand restaurant expenses, show them how a dollar of restaurant revenue breaks down, suggests Frank Doyle, former senior director of training for the National Restaurant Association. He recommends taking a fake dollar bill and tearing off about one-third to represent food costs and another third to represent employee salaries. Then show them how the remainder must cover all other expenses — leaving only about 5 or 6 percent for profit.
• Scour the trash. Doyle recommends performing trash audits periodically — every month or so — by dumping the kitchen's trash onto a plastic covering on the floor and examining its contents in front of the staff. Show staff how much china and silverware ends up in the trash and what product trimmings are wasteful. Be sure to use proper food-safety procedures when performing a trash audit. To help reduce waste, keep a clipboard in the kitchen with sheets on which to record all discarded food, drink and equipment — along with the reason they’re being trashed, says Doyle. That way you can identify problems, such as if glassware breaks repeatedly and padding is needed on the floor to prevent this.
• Teach employees that little things mean a lot. Stephanie Diaconis, co-owner of the Old Mill Inn Restaurant in Hatboro, Pennsylvania, teaches her employees to look for little ways to save money. For example, each sugar packet costs about a half of a cent. If each employee carelessly throws away a few packets each shift, the restaurant can waste a couple of hundred dollars per year. And that's just on one little item, she points out — then there's the expense of wasted creamers, butter, jelly, napkins and more. "We try to help them understand that these things that seem like minutiae can add up," she says.
• Conduct recipe contests. Each summer, The Kinsale Restaurant in Boston invites its cooks to participate in a recipe contest — and features the winning items as menu specials. "The cooks have to write the recipe ingredients with the cost per ingredient, and then come up with a price they would like to charge our guests," says General Manager Robert Raven. "We explain to our staff that food costs should be between 28 percent and 32 percent of the menu price." In addition to getting employees' creative juices going and giving them a sense of ownership, the exercise puts a dollar value on food items. "It lets them think about costs, so when they improperly cook items that have to be thrown away, they realize that was money that could have been used for their raises," says Raven.
• Make cost-cutting part of your daily procedures. Train employees to incorporate cost-cutting methods — such as turning off lights and checking faucets for leaks — into their closing procedures, says Diaconis.
• Share the wealth. Employees at the Old Mill Inn Restaurant are eligible for a bonus, partly based on the restaurant's profits. "That way there's an incentive" to cut costs, says Diaconis.