The world of business is chaotic. But like LittleFinger quotes in Game of Thrones, “Chaos isn’t a pit. Chaos is a ladder.” And do you know? Leisure and hospitality industry have consistently been a growing part of the economy for the last half-century.
According to recent studies done by Professor Dr HG Parsa, Professor of hospitality management at the University of Central Florida, 59% of hospitality facilities fail in the period of 3 years. That’s where I will quote “When you play the game of thrones, you win or you die” which stands true for almost anything and everything. And to add to it it’s not as easy to run a restaurant with a good profit because “I swear to you, sitting on a throne is a thousand times harder than winning one.”
The restaurant world isn’t all glamour and glitz; it’s hard work, patience, a great strategy and dedication. The ones who get into this industry love their work like Jaime loved Cersei. They put in all they have with only one thought in there mind “Nothing Else Matters.”- Jaime, They do each and everything to make it last long and efficient, ”The things I do for love.” – Jaime. Along with this, every restaurant owner knows that profit is crucial to survival.
Restaurants operate in an alarming tough environment. There’s high risk and well! enough reward. It’s like Winterfell, where everyone is preparing for winter quite unaware of the White-walkers that is the greatest threat of all times.
Challenges in the sector are the rent, competition, vendor management, capital and cash flow, food cost, effective inventory management and menu pricing, rise of social media and a lot more. It’s like the competition for the Iron Throne, where everyone wants to rule the world of consumers because the restaurant industry has always been and will always be a very consumer-driven market.
Improving your restaurants’ profitability is one of the baby steps to expanding and growing your restaurant in general. And the thing is that you might already know that whether your turnover has seen #AchcheDin, or you’re looking for income to drive growth, there are a number of ways to maximise the profitability of your restaurant. These are simple adjustments so as to how the restaurant is operated and how easily these are implemented.
Making it as easy and comprehensive as possible here, you can start with
- Increasing sales volume relative to expenses
- Decreasing expenses relative to sales
For your benefit, I introduce to you the ‘6 Simple Adjustments To Restaurant Profitability’
1.Combos And Offers
Weekdays are less hectic as compared to weekends. To drive traffic in during this time you can think about offering discounted appetisers or special combo meals. Another way to draw more consumers is to brand certain days of the week. For example, Wednesdays/Thursdays could be “Ladies Night” where the restaurant offers specials on alcohol or other items. You could invite your regulars for a tasting or food trials on certain days of the month, this way they feel valued and you also get a fair idea of how your new menu additions is likely to perform.You could use these days to try out new dishes or recipes and see how they perform with the crowd. Innovation is key to get in customers on slow business days and a sure-shot way to improve overall profitability.
2. Consider Implementing A POS System And Integrating Additional Technology
Now this is something very important in today’s time. A mobile point-of-sale system can help servers communicate instantly with kitchen or bar and send in orders immediately which in turn improves speed and accuracy of the preparation. This in turn will help you reap profits as the customer will be satisfied because of the efficiency of the restaurant.
Integrating technology in your restaurant not only maximises efficiency but also helps in keeping track of input and output.
For example, an inventory management system helps in constantly checking stock level and value along with keeping a note on consumption patterns. For managers, a scheduling management systems so that more time is spent with customers and less time scheduling.
3. Buy Fresh Produce Locally
Ask me why? Well, Firstly! It helps keep up the quality and flavour of food served in the restaurant which surely creates stickiness for the consumer.
And secondly! Buying local produce cuts your logistics cost as it cuts shipping time and increases its shelf life giving a restaurant more time to use the fresh produce and reduce the amount of waste generated as much as possible.
4. Money Saved Is Money Earned
There are a number of things that can be done to increase profitability and decrease wastage. Wastage of power, resources and equipment can be checked by using:
Power strips that have built-in occupancy sensors for active/inactive appliances. You can also switch to motion sensing lights for areas like bathrooms, freezers, and outside exterior doors that are not used by the customer at all times. Keep energy costs from being unnecessarily high at all times.
Resources can be saved by regular checks on refrigerator temperature. This can be implemented as an opening and closing process. An incorrect refrigerant charge can reduce efficiency by up to 20 per cent and can also increase your risk of equipment failure.
Buying used equipments, in some cases helps save capital.
5. Evaluate Current Suppliers
Assessment of the supplier contracts periodically ensures that you’re getting the best of deals for your own advantage. If you find other suppliers offering a more competitive price, don’t take a back foot in switching the vendor or you can also use their price as leverage to negotiate contracts with current suppliers. Track price fluctuations on a regular basis, sudden increases will severely dent your margins.
6. Analyze Each Menu Item
On a very personal note, this is something we believe in very strongly. A system in place for analysing each item on the menu, the ingredients used, quantities and cost price for the same sure adds up to your bottomline. This knowledge gives you a deeper insight and it’s analysis and implementation gives you a way to make the restaurant even more profitable.
Another important aspect of not just a restaurant business but any business is your people, your staff as you work together for 12 hours a day, 6 days a week. Your staff plays a major role in creating stickiness for the consumer. A proper greeting and farewell makes way for a great relationship between both the consumer and the restaurant.
You can easily say that website and social media for your restaurant is your eyes and ears in this era. This not just helps stay updated in the market but also helps in getting more traffic by making you present on all platforms of daily use.
All said and done! With these 6 simple fundas in your mind and aim to the sky, we will see you excel and that’s when no one will be able to say “You know nothing, Jon Snow.”
It’s not easy! Hard work and dedication with proper planning will surely help with your restaurant profitability but then again quoting Ramsay from Game of Thrones here, “If you think this has a happy ending, you haven’t been paying attention.”