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They say there are only two ways to improve your profits in business, you can either cut costs or increase sales, so without wishing to be too simplistic let's look at how you might do that in your restaurant or hospitality business.
Cutting Costs:
Nearly every restaurant owner I have worked with in the last 15 years has been able to cut their costs by checking invoices, delivery dockets and time sheets… then by addressing anomalies and letting suppliers and staff know that these figures are being watched.
Having too much food on the plate means ingredients are reordered faster and waste increases because diners are leaving food on the plate. The other issue that this creates is low numbers of dessert sales.
The above seems obvious but in the busy nature of our industry these things aren’t done constantly, things slip and it’s the owner that pays in the end.
The Four Ways To Increase Sales:
There are only four ways to grow your business: 1. Grow the amount of New people visiting, 2. Grow the amount of Repeat visits, 3. Increase the amount spent-per-visit and to 4. Increase your prices.
Increasing New Business is the most expensive and risky marketing exercise however, it’s the one most restaurateurs want to use. There’s so much money wasted yet at the end of the day there’s very little to show for it. My mantra that I get my clients to repeat is “The only reason to get new business, is to turn it into repeat business”.
The profit margin can be zero or worse when you spend hundreds or thousands of dollars to attract new customers and if you don’t have repeat business strategies in place then you are left “hoping” they come back… and “hope” is not a business plan!
Instead focus the lion’s share of your budget, time and efforts on increasing Repeat Business. We’ve documented over 100 ways that we get repeat business for our clients. The most successful are driven from a database. We manage over 1.3 million diner’s data for our clients, which we use to invite them to dine again and again in their restaurant.
The most successful Repeat Business strategy is a Birthday Club that invites people to dine on their birthday. This works like a Swiss clock for our clients generating tens of millions in sales every year. The reason ours is so successful is that we use Birthday CARDS and they pull like crazy where emails etc go unread.
Increasing Spend: Having staff that can upsell and cross sell menu items and drinks is a sure fire way to increase net profit because it doesn’t increase “staff costs” by one cent. My book "Selling at the Table” has helped restaurateurs increase their sales by 20% in a month so I know it’s possible.
If you don’t increase your prices you are cutting into your 3.8% profit margin because everyone else is increasing their prices!
Want to hear more? Restaurant Profits is holding a workshop that will dive deeper in the points discussed above.
Where: Ryde TAFE 250 Blaxland Road, Ryde NSW
When: Monday 11 March 2019 - 3pm- 6pm
What: More Bums on Seats Seminar follows by a complimentary Three Course Networking Dinner & Drinks
Register via: https://bit.ly/2Ubl5bJ
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