Restaurants are notorious for having very low profit margins. You can probably think of many that have closed up within the first year due to finances.
You can't control how many people you serve each night or how much they order. But you can take some actions to ensure you're maximizing profits. Here are five tips to help you make more money:
1. Ensure Excellent Customer Service
Customers who feel appreciated tend to spend more and tip better. Hire staff with great customer service skills. Do not just hire any person who wants a job.
Vet like your business' success depends on it. Have ongoing training or offer tips to them on how they can take their skills to the next level. Make it a goal to know the regulars well and show them your appreciation for their weekly visits.
2. Give Some Freebies
Allow staff the freedom to use their intuition to make the guest's experience special. This might be giving a free appetizer to a family with young kids. Or bringing a dessert to a couple who mentions it's their anniversary. Neither of these actions will set your restaurant back more than a few dollars. You'll benefit in tips and a positive comments that they share with others.
3. Be On Social Media
Create a Facebook page, Twitter, Instagram, and Yelp account. This lets you respond to comments – both positive and negative - as quickly and professionally as possible. Customers deserve a response, and this is your chance provide one. You can also use it to let customers know of last minute specials, coupons and upcoming events.
4. Have Servers Promote the Most Profitable Menu Items
It's important to know what your profit margin is on the foods you serve. Your most expensive item may not be the most profitable. Let your wait staff know this, and encourage them to push the more profitable items. Redesign menus with techniques that get customers to order more of the most successful dishes. Get rid of dishes that don't lead to profit.
5. Renegotiate Contracts With Vendors
Unless you serve rare specialty items, raw ingredients aren't hard to come by. Work with vendors to renegotiate terms. They might give you a discount for buying in bulk or paying upfront. You can get better prices from their competitors.
Knowing where to cut costs and how to make more per guest is essential to stay in business. You can also shop around to get better rates on your restaurant insurance and rent costs.