Restaurant owners must carefully negotiate supply contracts to turn a profit. They should research what other restaurants pay for goods to get purveyors to compete for their business. When negotiating, owners should get item prices, additional charges, payment terms, and quantity discounts included in bids. Large, regular bulk orders offer the greatest opportunity for savings.

1. Supply Contracts for Restaurant
Owners By Benjamin Dalley

2. •
Everyone knows the restaurant business is tough, but chefs and
entrepreneurs who have the right menu for their market, well-trained staff,
and a carefully planned marketing strategy are off to a promising start.
•
However, they still need to negotiate contracts wisely if they hope to turn a
profit.

3. •
Although restaurant owners and managers deal with many companies,
including equipment dealers, cleaners and linen providers, marketing
agencies, and landlords, they pay close attention to the suppliers of food
and bulk goods.
•
When negotiating vendor agreements, managers should first find out what
other restaurants are paying for the same goods.

4. •
They can then use that information to make purveyors compete for their
business.
•
A restaurateur might bid out the major product purchases each year to get
the best deal.

5. •
Bids should include item prices, additional charges such as freight and
insurance, payment terms, and quantity discounts.
•
Typically, large orders made on a regular basis offer the greatest opportunity
for savings.

6. •
Owners can agree to buy in bulk but take delivery over an extended period
of time.
•
Using multiple sources for the same items may keep vendors honest, but
this practice is not always a good idea.
•
After all, food brokers routinely offer percentage discounts to restaurants
making all their purchases with a sole supplier.

7. About Benjamin Dalley:
•
Benjamin C. Dalley is a Managing Partner at the Xebec Enterprises
consulting firm. Ben Dalley founded and developed a successful restaurant
group in Washington, D.C.

8. Thank You!