STRATEGIC ACTION PLAN

A step-by-step procedure

 To decrease operational costs by 5% by the end of the year:

On a daily level, operating costs are linked with the maintenance and
management of a business. Reduced operational costs normally enhance short-term
profits, but they can also impair the company's long-term gains. Furthermore, reducing
operational costs by 5% by the end of the year will (1) limit the undesirable reduction in
profitability as a result of the COVID-19 pandemic; (2) return to profitability from lower
sales; and (3) accumulate a higher return at present revenue levels.

 Recommendations:
1) Seeking methods to cut operational costs without compromising the quality of
meals and services, as well as the employees' morale.
2) Identifying inefficiencies by tightening up organizational processes and
procedures. Analyzing the highest monthly expenses by breaking them down
into the most significant monthly expenses for the firm contributes in cutting
operational costs.
3) Making use of sales and cost tracking.
4) Eliminating excessive inventory and stock to reduce waste and spoilage.
5) Saving costs on utilities through lessening utility prices, as gas, water,
electric, and other utility bills may consume up a significant amount of the
monthly budget.
 Step-by-step Procedure:
1) Encourage staff to identify shortcomings and provide ways to solve
problems. Consider offering an incentive to workers who do so.
2) Conduct a monthly team review. A software application may be used to
facilitate the process of implementing inventory management, payroll, and
other operational expenditures easier. This will also bring transparency to
employees, allowing the team to deliberate on measures to increase
earnings.
3) Purchase assets and supplies rather than leasing them. Purchasing an
asset may potentially result in a significant instant tax reduction.
4) Prevent from overbuying whether for the sake of convenience or a good
deal.
5) Take considerable time assessing inventory levels and determining how
much will be needed between deliveries. Having less inventory on hand
urges employees to perform a better job of handling and portioning out
items since they are aware that there is a limited quantity accessible.
6) Save on utilities by reducing utility costs; the following measures can be
performed:
 Half the electricity bill by turning off all electronic devices and
machineries when closing up the establishment.
 Replace all previous bulbs with energy-saving ones.
 Preferably buy energy-efficient equipment during restocking and
refilling supplies.
 Encourage the staff to be conscious of the amount of energy and
water supply being utilized in the establishment.
REFERENCES

Enterprise League. (2020, September 4). 23 proven ways to reduce operating cost of your
business without losing efficiency. Retrieved from Enterprise League:
https://enterpriseleague.com/blog/ways-to-reduce-operating-cost/

Kranker, D. (2020, August 11). 21 Ways to Cut Costs For Your Restaurant. Retrieved from
Budget Branders: https://budgetbranders.com/blog/21-ways-to-cut-costs-for-your-
restaurant/

Shipware. (2020, July 1). How to Reduce Operating Costs for Your Business. Retrieved from
Shipware: https://shipware.com/blog/how-to-reduce-operating-costs-for-your-business/

Sullivan, M. (2019, September 3). Operating costs: Understanding and reducing them for your
business. Retrieved from Intuit : https://quickbooks.intuit.com/r/expenses/8-ways-reduce-
operating-costs