Increase Profitability
If you are a restaurant owner, or thinking of being one, you are going to want to be as efficient as you possibly can. You must continuously figure out ways to increase profitability for your restaurant.
Being in the F&B industry is not easy as the competition is fierce and eateries are opening up everywhere.
Because of the high competition, you would need to optimize your spending in order to maintain a positive cash flow into your restaurant business. The question is, how can you save money while maintaining the high standards of your beloved restaurant?
Read on to learn more.
Monitor Your Spending
The first thing any small business owner (not just restaurant owners) should do is to actually look at what you are spending on.
Yes, this means a boring afternoon of looking at receipts and statements, but it’ll pay you dividends, literally, for the laborious effort. (It should not be a laborious work, if you know the right tools. Click here to find out more)
- What looks expensive and what are you spending a lot on?
- Did you know about those expenses?
- Why are you spending that much on certain things?
- Are the purchases necessary?
- How can we reduce the cost while still deliver outstanding food for our customers?
- Maybe something looks fishy and you might think that somebody could be stealing from you? Who knows.
These are all good questions to ask while you are monitoring your spending.
You would be surprise at how much you could save just by monitoring your spending.
Look for Fresh Ingredients and Best Deals
Once you’ve got a good idea of your restaurant’s spending, the next step is to shop around.
A restaurant owner should always search for the best places to buy their ingredients and produce.
There are many wet markets, hyper markets and stores that can provide good quality ingredients.
1. Fresh Ingredients
Be it chicken, fish, beef, onions, garlics, tomatoes, carrots, cooking oil and many more.
To continue producing outstanding food and services for your beloved customers (so that they will actually love you, keep coming back and recommend your restaurant to their friends), please be sure to always look for the freshest ingredients.
Old chicken, stale fish or rotten vegetables are a sure-fire way to deter customers from coming again to your restaurant.
Sounds crazy, but have you ever watch Gordon Ramsey kitchen nightmare? You would be amazed at the gross things he finds in those horror restaurants.
2. Best Deals
The challenge is for you to find the best deal in town.
Go to local wet markets as you can almost always find fresh proteins and vegetables.
Go to hyper markets or stores to find your supply of canned items. Be sure to get items that are well before they expiry dates.
Certain hyper markets or stores are still selling items that are passed their expiration date. This could be dangerous for your customers.
If they find out that the reason they got sick is because they ate your food, you and your restaurant might get in trouble. Plus, your restaurant will get a bad reputation. We don’t want that now, do we?
Team Cooperation
1. Communication
This is where your leadership skills come in: getting everybody on board. As an owner and the leader of your restaurant, you will need to find ways to effectively communicate with your team.
Your team will need to know your restaurant’s cost-cutting goals.
Present data and facts to show the real situation of the restaurant if you are going to get them to help you save money. So be honest, be open and get them on your side to help increase profitability.
2. Present Data & Facts
To help set your goals objectively, you would need to present data and facts to your employees. This will make your goals attainable and measurable.
Knowing your numbers is crucial as a business owner because that is how you make informed decisions. Making decisions based solely on instinct is not scalable and can lead to business failure. A sure fire way to not increase profitability.
3. Motivate Your Team
One of the ways to get your team motivated to help is to reward your good employees. Once your team goals are met, you could reward them with free dinner, special bonuses, or any other creative ways you can come up with.
Remember that your team is the heartbeat of your restaurant, keeping them motivated and on your side is your best bet to ensure your restaurant’s success.
Food Portion Size Control
Another effective way to reduce cost and increase profitability is to monitor how much food you are sending out front and how much is coming back uneaten?
If you can reduce your portion size without your customers complaining too much, you can save enormous amounts of money. Apart from that, you will also contribute to the environment by reducing food waste.
Did you know, about 40% of waste generated by Malaysians are food waste? A research that was conducted by SWCorp Malaysia shows that about 38,000 tonnes of waste are being generated by Malaysians daily. Food waste amounted to 15,000 tonnes! – sourced from www.channelnewsasia.com
From that 15,000 tonnes of food waste, about 8,000 tonnes are avoidable food waste while 3,000 tonnes of food going to landfills are actually edible. – sourced from www.channelnewsasia.com
Imagine that! So, let’s do our part to save our environment too!
Free Stuff Costs Money
Freebies! In your efforts to attract customers, you might be tempted to offer lots of unnecessary free stuff to your customers. Don’t take this wrongly, there is nothing with giving our free stuff. People like free stuff.
The only time it can become bad is when it will reduce your profit margin. Think for a second and ask yourself, what do you give away for free that you could reasonably avoid doing?
Even things like a glass of water your staff take to the table, do you need to do that or can people ask for them?
For an effective giveaway, set your objectives (like how this giveaway can make the customer come to your restaurant again, which in turn increases your customer life time value), have a budget and set your limit.
Rather than aimlessly giving away free stuff, use specific guideline that will actually increase profitability for your restaurant.
Have you got the Right Software?
For your business to grow and become profitable, you should consider having a restaurant software.
Having a dedicated software for your restaurant that has analytical and streamlining capabilities can help your restaurant become efficient at managing cash flow, handling food supplies, improving employee performance and customer service.
This will significantly improve your profit margins.
It is crucial for you to analyse and understand your business data. Some of the data that are possible to be captured using a restaurant software includes:
- How your income is generated and how spending is handled?
- Are popular ingredients are running out fast?
- Which ingredients should be you buy less?
- Who is performing and which employee need extra training?
- What promotions or loyalty programs are working and which ones are not working?
One of the most popular software out there now is a Cloud based iPad Point-of-Sale (POS) System. To understand why you would need a POS System to help your business grow, click here to read 13 Ways an iPad POS Can Increase A Restaurant’s Productivity
You’ve already understood the importance of having an iPad POS System? Sign-up for a FREE demo with Slurp! iPad POS system today!
