Operations
Nathan Leathers, the founder of Kitchen Guard, discusses how proper risk management, high-quality leadership and strategic financial planning are the keys to ensuring the success and safety of any restaurant.
Photo: Adobe
June 17, 2025
Controlling expenses is a daily challenge in this volatile, competitive marketplace. Pressure to “cut costs” comes from all angles, shapes and sizes, so before you strike that line item, think twice. Many owners and managers, particularly in smaller establishments, often focus on cutting costs in areas that might seem minor but are critical for your restaurant’s safety and long-term health. While this approach may appear financially prudent in the short term, it can lead to catastrophic losses that far outweigh the savings in the long run.
The risks of cutting safety costs
Some variable expenses can be managed appropriately to your advantage. However, reducing costs in critical safety areas, such as kitchen equipment maintenance and fire prevention systems, can have devastating consequences. Fires caused by neglected kitchen equipment are a prime example.
I remember a situation with a restaurant in San Diego a few years ago. Something caught fire on their kitchen line, and the staff extinguished the fire very quickly because the hood system had been cleaned appropriately. The losses were in the thousands versus millions. This incident underscores the importance of maintaining safety systems. A well-maintained hood system prevented what could have been a catastrophic loss.
The truth is that kitchen exhaust cleaning services and fire prevention systems usually cost less than 2% of a restaurant’s gross revenue. If you’re not aware of this, it’s worth noting. Sadly, many restaurant operators overlook the minimal financial investment required for these services, which can offer tremendous value. Often, they only realize the significance of these investments when it’s too late. By investing in these essential services, restaurant owners can save significantly and avoid potentially catastrophic expenses.
The cost of poor risk management
Many restaurant managers focus on cutting visible expenses, such as labor or maintenance services, without considering the total risk involved. Most restaurateurs don’t spend time thinking about these types of things. Decisions based solely on cost savings rather than risk mitigation expose businesses to severe financial and operational risks.
This means that small cost-cutting measures in labor or maintenance may not result in significant financial benefits, but the risks associated with cuts to safety measures can be severe. It’s crucial to analyze the total risk of the business, focus on the riskiest aspects, and manage those effectively.
The Role of leadership in business success
Another critical factor in restaurant success is leadership quality. The importance of investing in skilled restaurant managers cannot be overstated. Paying competitive salaries for managers with strong business acumen and leadership skills can significantly impact an establishment’s success. This investment in quality staff leads to better decision-making, particularly in safety and maintenance, fostering long-term prosperity and stability.
The compensation structures for restaurant managers also play a significant role in decision-making. When incentivized based solely on short-term financial metrics, managers may prioritize immediate cost savings over long-term sustainability. Owners must evaluate whether they have the right people to make sound business decisions.
Education and awareness: The key to long-term success
There is a pressing need for better education and awareness among restaurant owners and managers about the risks associated with cutting essential services. The industry remains fragmented, with minimal regulation, making it even more critical for business owners to take responsibility for their decisions.
By understanding the actual cost of risk and prioritizing essential safety measures, restaurant owners can safeguard their businesses from unnecessary disasters. The one key message for restaurant owners is clear: Analyze the total risk of your business, focus on the riskiest aspects, and manage those, then focus on the experience and proper customer service.
As a restaurant owner or facility manager, it may seem that short-term cost savings are attractive. Still, they should never come at the expense of essential safety and maintenance services. They must shift their focus from immediate financial gains to long-term sustainability. Proper risk management, high-quality leadership, and strategic financial planning are the keys to ensuring the success and safety of any restaurant, ultimately guaranteeing a thriving establishment for years to come.
Partnering with B2B service professionals who have a vested interest in your operational safety, business success and the well-being of your clientele can be a game-changer. These experts bring a wealth of knowledge and experience to the table, ensuring your operations run smoothly and safely. They are not just service providers but strategic allies who understand your business’s unique challenges and opportunities.
