If 2020 was tough on anyone, it was restaurant owners. And while it’s unclear what the future has in store, there are numerous ways to generate more revenue and increase profits. You just need to get creative!
4 Tips for Fatter Profits
If you’re having trouble getting customers through your doors this year, the next-best option is to increase your profit margins. This increases your chances of staying afloat (and even growing) in spite of fewer transactions.
How do you make it happen? Here are a few ideas to get the wheels spinning:
- Regain Control Over Delivery
Meal delivery services have had massive success over the past year. They’ve grown their businesses multiple times over and, unfortunately, have done so at the expense of restaurants like yours.
While it’s better to partner with a meal delivery service than nothing at all, they’re eating away at your profits. Why not take control over your delivery system and stop paying massive amounts to those third-party applications?
By installing a delivery system for POS, you can process orders online, connect with your kitchen, manage your own deliveries, and offer curbside pickup. And even after the COVID crisis ends, you’ll still be able to leverage this system to expand further.
- Refine Your Marketing
Is it possible that you’re casting too wide of a net with your marketing efforts? Whether organic or paid, you can generate a higher return on investment if you’re willing to refine your target audience and focus on a more specific niche or demographic.
Niching down can feel counterproductive at a moment when you’re trying to bring in more revenue, but it’s more important than ever. People feel more engaged when they feel like the messaging fits them. As a result, they’re more likely to become loyal repeat customers.
- Add High-Margin Menu Options
One of the best ways to improve profitability is to simplify your menu and do away with any low-margin options. Instead, focus your menu on items that share common ingredients and have fat margins. This includes:
- Fountain drinks and coffee are huge moneymakers. At less than $0.10 per serving, these drinks often have a 20x markup. (And even with free refills, you’re still making 15x-17x per drink order.)
- If you have a liquor license, you should really push the sale of beer, wine, and cocktails. The average markup sits somewhere in the range of 200 to 600 percent!
- As far as food goes, items like pizza, soup, and dessert are always good options. Children’s menu items tend to provide beefy returns as well.
- Breakfast items are always known for having robust profit margins. Eggs, for example, sell at less than $4 per dozen. And yet you can sell a side of two eggs for two or three bucks. On top of that, potatoes, toast, oatmeal, and grits are all very cost-effective. If you haven’t already, consider opening for breakfast and/or expanding your menu selection.
You don’t want to stray too far from what your restaurant is known for, but a willingness to expand your menu for these special circumstances could do your bottom line a world of good.
- Diversify Your Business Model
You might need to switch up your business model to evolve with the times. Just because you’ve always been a dine-in restaurant, doesn’t mean you can’t shift to account for changes in the marketplace. Offering multiple sales channels, including things like meal plans, catering, and delivery, will allow you to reach more of your target market than ever before.
The key when diversifying your business model is to avoid huge overhead expenses related to starting up. Look for the lowest hanging fruit and try a small rollout before investing lots of resources.
Invest in the Future of Your Business
The past year has been extremely tough on restaurants. And though it would be extremely easy to roll over and give up, you still have some fight left in you. No matter how tough local restrictions make it, or how limited your resources are, there are always options. Pursue these tips with purpose and poise and see where they take you. If nothing else, you’ll be able to confidently say you’ve given your business everything you’ve got.