A few months ago, while the team at Slurp was taking a break (munching on chips & sodas, healthy right?), one of us asked, “How can we help restaurants and cafes succeed in this highly competitive industry?”. “More importantly, how can they increase their restaurant’s profit?”.
These was natural questions to ask. At Slurp, we strive to help small businesses pave their journey towards achieving their goals and become successful. This meant that we needed to find ways to help them compete in a meaningful way.
The steps listed below are meant to give a basic guidance, an overview on areas to improve your restaurant’s profit. As for the seasoned restaurateur, this guide could serve as a reminder.
Why we decide to write these steps?
The food and beverage industry is such a competitive landscape that often times, there is only a thin line separating between success and failure.
This basic guide can hopefully give restaurants and cafes the slight edge to bring in more customers which opens up the possibility of higher restaurant’s profit.
Though Slurp Point-of-Sale revolves around offering restaurants a complete F&B Operations Management Solutions system, we strongly believe that our system will be even more useful and effective to the restaurants if there is a constant stream of customers for the restaurants.
01 Sales Report: Track, Analyse, Innovate, Repeat
One of the common mistakes that a lot of restaurants do is focusing too much on net profit; without ever breaking down the sales generated by respective food items.
As a result, more food items is often added to the menu without removing the old ones. After all, as long as it contributes to sales, it makes sense, right?
This not only potentially spreads the sales of your best-selling food items to the non-popular menus, but your profit margins tends to drop as your cost increase from the introduction of new ingredients.
Because you do not know which food items are working and which ones are not, the only way to increase your restaurant’s profit is to introduce more variety. At one point, this constant introduction reduces your net profit. It gives you the false perception that the new food items is a failure.
So, how do you ensure a sustainable growth?
Yes, track! Track everything about your sales, from the food that are being sold to the drinks. Track the average number of people in each order ticket and the time that your sales are being made. By tracking, you will be able to gather useful information that you can then make sense of.
Now that you have all the data, the next step is to make sense of the data and turn them into actionable insights.
For example, lets say your best-selling items are “chicken chop” and “peach tea”, what does this mean to the business? Do these items have a high profit margin?
If you prefer selling lemon tea than peach tea because of the higher profit margin, can you introduce a set meal to encourage the take up of lemon tea? Or what about introducing a set meal to encourage people to come to your restaurant during the non-peak hours; does it make financial sense?
Keep on digging to find a pattern that makes sense for your business and that can potentially increase your restaurant’s profit.
After analysing the data, you decide to introduce a “chicken chop and lemon tea” set meal. Based on your calculations (make sure it makes sense for your business), you found out that you will potentially get a higher profit by introducing this menu rather than selling them individually.
Once this is discovered, the next step is to start introducing the menu and track the sales data so you can repeat the process and learn about the new menu.
Now that the “chicken chop and lemon tea” set meal went live, it is time to repeat the whole process of tracking, analysing and innovating. Yes, you heard that right.
It is NOT a one-off method. You need to repeat this process throughout the life of your business because your customer’s preferences changes. As an awesome restauranteur, you need to cater to their cravings most importantly.
By repeating, you will be able to identify your best-selling items, remove non-popular items and introducing successful set meals. You can even offer strategic discounted meals campaigns to help drive sales.
No longer you will be shooting blind-folded.
No, you have the power of data to back you up with every decision you make for your business. Onwards to higher restaurant’s profit!
02 Order Management: Speed is the Essence
As any good restaurant operators can relate to, table turnovers are one of the most important metrics to look at.
What is table turnovers?
Table turnovers is the time on average a customer spend in the restaurant.
If the tables in your restaurant has an average of one seating, this shows that the restaurant is lacking in customers. If your restaurant has multiple seating for each table on average, this means more sales for you.
Like any business, growth is definitely something that everyone wants.
If you have an average of one seating per table, it is time to put your focus into drawing more customers into the restaurant. However, if your restaurant already has multiple seating per table, how do you increase it?
This is where speed comes into play.
How can your waiters take and get customer’s orders processed faster and accurately? How do you ensure that the customers do not need to wait too long before they get their food?
Getting these questions answered will help reduce the average time spent by each customer in the restaurant. This in turn allows you to serve more customers and increase your restaurant’s profit. As a side benefit, customers will leave the restaurant satisfied as they get to have their food on time.
03 Employee Management: Great Employee, Great Service
There is a saying that goes something like,
“If you treat your employees right, they will treat the customers right”.
This also means that you should strive to identify, reward and keep your great employees so that they can continue delivering exceptional service.
While it is common knowledge to keep great employees (everyone knows that), but it is equally important to identify and let bad employees go early.
However, most restaurants fail to do that. This allow the bad employees to disrupt the operations of your restaurant and negatively affect the moral of the other members of your staff.
As a result, customers get a very bad experience in your restaurant. These customers will not only not return to the restaurant, they will also share about their bad experiences with their friends and families. This translates to a huge loss of potential sales and reduces your restaurant’s profit.
That is why it is imperative to have a system put in place to not only check the clock-in and clock-out time of your employees, but also their performance.
Monitor Performance and Reward
As an employer, you should monitor their performance such as how many tables on average does each employee serves. If most of the tables seem to be serve by the same employee, then you know that theres is an under-performing and unproductive member of the team.
Rewarding the performing employee while replacing the underperforming employee will keep your team motivated to do better.
Apart from rewarding just one employee, you can also come up with a team goal. If the team work together and achieve such goals, they can be treated to a nice dinner or get a nice incentive. Depends on your creativity as an employer.
A great service will make your customers happy and come back for more. They will start spreading the word to their family and friends and hopefully you will gain good reputation as well as boost your restaurant’s profit.
04 Inventory Management: Replenish or Remove
Slow service or bad employees can give your restaurant a bad reputation, but constantly unavailable food is a huge turnoff to your customers. Imagine travelling a distance to try out a restaurant’s food but only to be told that everything is sold out for the day.
A customer might give the restaurant another chance by coming back some other time but if it happens again, more often than not the customer will just “give up” on that restaurant and you have potentially lost this customer forever.
Even worse, they might share the bad experience with their connections. That is disastrous for any business!
To prevent that, you need to constantly do an “ingredient audit”. At the end of each day, do a stock audit to determine how many ingredients are available. Determine whether do you need to replenish any.
Besides the quantity, you should also check on the quality of the ingredients. The last things you want is your customers getting food poisoning from your food which can easily spell an end to any restaurant.
With an advance system in place, your “ingredient audit” can also help you determine how long has the respective ingredients have been kept in the store and how many ended up going to the waste. This will give you some insights into potentially altering your menu to reduce the number of ingredients that go to waste which translates to a lower cost and higher restaurant’s profit.
What is the point of making the best curry noodle in town if no one knows about it? That is why good product and good marketing have to come hand-in-hand and compliment each other.
You want as many people as possible to know about the existence your restaurant and that you have a delicious dish to support the buzz.
With the many marketing opportunities available, here are 2 ways that you can start off with:
Instagram – What better way to generate awareness about your restaurant then showing mouth-watering food pictures to your potential customers.
According to recent study in 2017, there are close to 14 Million Instagram users in Malaysia! It is high time for you to promote on a platform that people spend a lot of their time on.
With Instagram, you really need to take good looking photos. If you can afford a professional, by all means do that. If you do not have the budget, you can also use your smartphones to create astounding images.
There are many resources on the internet you can refer too for tips and pointers. For example, iPhone Photography School has great tips on how to take great food photography using an iPhone.
With proper “hashtags”, you can even show up when they search for something related to you. #bestfoodintown anyone?
Daily deals – now that you have created awareness, it is time to translate these to actual sales. With the time-tested method of offering discounts on your meals, you can convince even the stingiest person to try the food in your restaurant.
While the consumer has always been spoilt for choices when it comes to food, there has been more platforms than ever when it comes to discovering new restaurants to try out.
Restaurants can no longer afford to just provide great food, but they also need to figure out ways to “stand out” in places where a consumer might be potentially looking for them. Getting more people to notice your restaurant is a good way to increase your restaurant’s profit.
THE GOOD NEWS!
After the tips above, you might be thinking “Oh thats great, but it adds so much work for me to do!”
Well, good news! Slurp Point-of-Sale System can help you automate 4 of the tips we just shared. Slurp POS can help you save tremendous amount of time and energy. You can now focus to think of ways to bring in more sales!
01 Sales report – This can be tracked as your customers place an order and be analysed in real-time whenever and wherever you are. The user-friendly interface also allows you to quickly and easily compare sales performance across different time period.
02 Order management – Your waiter can now take orders on a tablet which will be immediately relayed to the kitchen. You can also track how long has the customers been waiting for their food to arrive which allows you to priories accordingly. No more long waiting time or missed orders for your customers.
03 Employee Management – Not sure if your employee is doing their work when you are away? Now you have an “invisible” manager that not only can track the clock-in and clock-out time of your employee, but which employee are actually doing work and which ones are not.
04 Inventory management – You can quickly check how many ingredients are left in your restaurant inventory which can be tied to the particular food and drink. This can allow you to plan your stock replenishment easily or offer set meals to encourage customers to buy another product if one sold out.
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