Running a restaurant is tough, especially when 45% of operators expect competition to be fiercer in 2024 than it was last year.
Small changes in how you manage your restaurant can lead to significant improvements in your profit margins.
By focusing on key areas like customer experience, menu development, and cost control, you can ensure your restaurant not only survives but thrives.
Here are our seven top tips to maximise restaurant profitability and stay ahead of the competition.
Engineer Your Menu for Maximum Profit
Your menu is more than just a list of dishes; it’s a strategic tool for maximising your profit margin.
But first, what is the average profit margin for a restaurant? It’s only between 3% and 5%—a reminder that there’s no room for a lack of focus. And with food and drink being the “product” to achieve this margin, it’s key to make sure your menu is optimised for maximum success.
Menu development involves promoting high-margin items and tweaking your menu based on performance data. Highlighting your most popular and profitable dishes can increase sales of those items.
Regularly review your menu to keep it fresh and appealing. Consider removing items that don’t sell well or have low margins. Use menu design techniques, like placing high-margin items in prominent positions, to guide customers' choices.
RELATED: How to Increase Restaurant Gross Profit Margins with These Proven Strategies
Efficiently Reduce Overhead Costs
Keeping an eye on overhead costs is crucial for maintaining healthy profit margins for restaurants. These include expenses like utilities, rent, and supplies.
Some solutions?
- Implement energy-efficient practices to reduce utility bills, such as programmed thermostats and LED lighting.
- Negotiate better rent terms if possible.
- Use technology to monitor these expenses and find areas to cut costs. Every bit saved on overheads goes straight to your bottom line.
- Regularly review your supplier contracts and look for opportunities to negotiate better deals or switch to more cost-effective alternatives.
Use Forecasting: Your Secret to Staying Ahead
Accurate forecasting can make a huge difference in managing your costs effectively.
By predicting sales trends and customer volume, you can order the right amount of stock and schedule the right number of staff.
This reduces waste and optimises your resources.
Tools like Opsyte’s forecasting feature use historical data to give you predictions. This means you can use sales data to ensure you understand your business flow and that you have enough staff during peak times without overspending on labour. This results in a much tighter operation which directly impacts your profitability.
Master Your Invoicing
Getting your invoicing right can save you time and cut unnecessary expenses, boosting your restaurant's profitability.
Here’s how:
- Automate Data Entry: Use tools like Opsyte that offer OCR technology or automated systems for invoice entry and categorisation to reduce manual errors.
- Set Up Approval Workflows: Multiple approval levels help control spending and ensure accuracy.
- Cut Down on Errors: Automation means fewer mistakes, saving you time and effort.
- Sync in Real-Time: Ensure invoices sync with your accounting system for up-to-date financial data.
- Streamline Your Process: Automated tools like Opsyte make invoicing smooth and efficient, ensuring timely handling.
Smart Scheduling for a Lean Team
Labour costs are one of the biggest expenses for any restaurant. The good news, however, is that by keeping tight reigns on staffing, this cost is entirely manageable.
Optimising your staff scheduling can help you balance providing excellent customer service with keeping labour costs in check. Match your staffing levels to demand by using forecasting tools that consider sales forecasts and customer volume.
This way, you can avoid overstaffing during slow periods and understaffing during busy times.
Opsyte’s scheduling tool is perfectly designed for this task, getting your staffing levels just right—ensuring the labour spend is correct and customer service is consistent.
RELATED: Practical Tips for Running a Profitable Restaurant and Pub in the UK
Dig into Detailed Sales Reports
Detailed sales reports provide valuable insights into your restaurant’s performance, showing you what’s working and what isn’t. Use these reports to identify trends, spot inefficiencies, and adjust your strategy accordingly.
A reliable reporting tool is the answer in this regard.
Opsyte’s Insytes platform offers real-time analytics and customisable reports, giving you a clear picture of your sales performance.
With this information, you can make data-driven decisions to improve your menu, marketing, and overall operations.
For example, if you notice a particular dish is consistently popular, consider promoting it more or creating variations of it to increase sales.
Keep Your Finances in Check
Frequent financial reviews are essential for maintaining restaurant profitability.
Set up regular audits and financial checks to monitor your restaurant’s financial health. Use tools that assist in tracking and reviewing performance, ensuring you stay on the right track.
By regularly reviewing your financial data, you can identify potential issues early and take corrective action. This proactive approach helps you avoid financial pitfalls and keeps your business running smoothly.
Opsyte’s reporting tools provide you with the data you need to understand your restaurant’s profitability fully.
Ready to Boost Your Restaurant Profitability? Start Today!
Boosting your restaurant’s profitability simply involves gaining a detailed understanding of how your business is performing, focusing on key areas like sales, menu development, and cost control.
So, are you ready to make positive changes? Implement these strategies and leverage Opsyte’s tools to see real improvements in your financial performance.
