How to increase the profitability of your restaurant?


The development of a business, especially a restaurant, does take a lot of efforts and investments. Starting a restaurant would imply not only the requirement of substantial capital investment but also the needs for creative ideas with the restaurant’s decor or the menu. Many restaurant owners are troubled by the thoughts of profits swirling down without any hope for an increase in the number of customers.

Therefore, it is advisable for restaurant owners to keep looking for innovative or proven methods for increasing the sales of their restaurants. The following discussion would facilitate a brief impression of various measures that restaurant owners can implement for increasing sales of their restaurants.

Check the accounts properly

Let us jump into the maths first! Any restaurant owner could access profitability if they are attentive to the profitability received for each recipe plate cost. Even though it may seem to be too tiresome and time-intensive, calculating the cost of each recipe plate helps in finding menu items that provide the maximum profitability.

It is a common assumption in the restaurant industry that 86% of the sales are obtained only from the selected 16% of items found on the menu. Therefore, it is essential to check the monthly profitability derived from specific recipe plates or the whole menu of the restaurant.

Earn profits through loyalty

Loyalty or reward systems could be a proven approach for bringing in repeat customers. Renowned brands such as Starbucks have been able to improve their profits substantially through loyalty programs, and the same could be applicable in the case of small businesses also.

It has been found that the cost required for maintaining loyalty programs for small businesses was considerably lower than the profits that were derived because of it since repeat customers were more likely to spend 67% more on any purchases as compared to new customers. However, a restaurant has to plan out a clear and competent strategy for rolling out the loyalty rewards program so that it does not become another cog in the whole wide world of marketing.

The restaurant’s environment should be lively!

Do not stress your workers too much! As a restaurant owner, many responsibilities are going to pile up in the line of duty. However, it is also imperative to note that restaurant workers also have a life beyond the kitchen and tables. Allow flexible working hours for workers so that they can come rejuvenated to the job and make the place feel lively rather than a place reeking of melancholy. Lively workers at a restaurant excite the working atmosphere and also serve an inviting atmosphere for customers.

Small changes can work big wonders

Apart from the above mentioned strategic approaches, restaurant owners could also try some minor changes in their operations for increasing their profitability. For example, offering combo deals on weekdays could be taken into consideration. This would be a reliable way to increase sales on weekdays when the visitors are less. Organizing special themed events on certain weekdays such as ‘Boy’s Night Out’ on Wednesday nights could also be a vital boost to the appeal of a restaurant among a particular consumer population.

On a closing note, these pointers have been proven to show desired results in the case of improving profits of a restaurant. Appropriate market research and the choice of best practices in marketing and production according to the target audience could provide explicit advantages in increasing the profitability of a restaurant.

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