4 Easy Ideas to Increase Your Restaurant’s Profit Margin

Every restaurant owner wants to have a wide profit margin for their restaurant. To raise your restaurant profit margin, you have to reduce your operational costs or increase sales. Restaurants operate on thin profit margins, which is something experienced even by top restaurant chains. Although it may be challenging to achieve a high-profit margin, it is possible to achieve it with the right strategy and a little hard work. Here are four ideas to increase your restaurant’s profit margin.

  1. Increase Customer Numbers

You can increase the number of people visiting your restaurant by bringing in regular innovations, such as providing offers and discounts, running a loyalty programme, hosting events, and improving your menu. Have in mind that simple, innovative ideas and changes attract more customers. When you make the changes and bring in innovation, you have to let people know about it by marketing your efforts. Carry out market research and find out how your competitors are garnering more customers. An increase in the number of customers will result in increased restaurant sales.

  1. Increase your Sales Average

An increase in the sales average can be achieved by increasing the cost of food and drinks or looking for ways to increase the number of items sold. You can increase the number of things you sell to one customer by upselling. Your servers should learn how to suggest other items to customers to order more or increase their order. But, train your servers the art of doing this without irritating your customers. Allow them to sample foods and drinks on your menu to suggest something they are familiar with. The staff should understand the profitability of various items and the ones that make sense to offer. Upselling is a technique that can significantly increase your profit margin.

  1. Reduce Restaurant Costs

Try and reduce the expenses that increase your general cost. Some of the expenses may be incurred through hiring more employees than you need, high staff turnover, generating a lot of kitchen waste, or constant equipment failure.

Another way to reduce expenses is by reducing food costs. This is done by pricing your menu correctly and being updated on your restaurant inventory. Have a standard recipe, manage the yield of all items in controlling food costs, and ultimately increase your profit margin.

  1. Control the Cost of Labor

After food costs and rentals, labor takes the third-highest cost in a restaurant. An extreme competition, lack of skilled workforce, and high employee turnover rates all add to restaurant labor costs. You can manage the labor costs by employing the right people and training them more according to your restaurant needs. Motivate and keep your workers happy to make them perform better and stay longer in your restaurant without quitting.

Human resource personnel and managers may use a lot of time to create complex work schedules, especially when dealing with a large workforce. Creating work schedules by hand sometimes brings conflicts among workers, affecting work quality and leading to wasting work hours while trying to resolve disputes. Therefore, restaurant managers should use restaurant scheduling software to save time and come up with a schedule acceptable to everyone.

The software has many other benefits, including:

Collaborative scheduling where employees manage shift trades by setting their availability. This enables managers to ensure that all the shifts covered and endorse employee input and requests.

Alert for Uncovered or Understaffed Shifts. Creating schedules using pen and paper is prone to mistakes. You can configure the software to alert you when there is an uncovered shift or when more people are needed in a particular shift.