Due to the recent events of COVID-19, restaurant sales were down on average by 80%. Restaurant restrictions are beginning to lift and now is the time where you need to take action.
As operations begin again, there is more pressure to increase revenue and get back to “normal.” In order for this to happen, you must first know where in your operations you are wasting money.
To recap on our previous blog post, “Are You Wasting Money,” we explain the classic ways in which restaurants lose money. Factors such as food waste that come from order errors and food spoilage, as well as employee theft. Both of these issues are preventative with an inventory management system. If you are able to keep track of waste and theft, you know how to fix these shortages and grow from there.
If done with the correct strategies, you can learn how to improve your profitability. In this blog post, we’re going to cover different tactics to cut costs and increase overall value.
Moving forward, use these strategies to help boost your profits:
Improving your restaurant’s profitability will take one step at a time. But, the first step is to identify where you can cut your costs.
There are 5 major restaurant costs:
- Labor Costs
- Food Costs
- Utility Costs
- Kitchen Equipment Costs
- POS System Costs
Getting started, labor is one of the costs that can negatively impact your profits. Optimize your employees’ schedules and when business is slow, make cuts.
Secondly, tracking food costs can help you cut your money loss. Put actions in place to train your staff when it’s okay to throw out food and when it isn’t. It’s also important to note that you need to have reasonable portion sizes.
Taking a look at utility and kitchen equipment costs, cut, and get rid of what you don’t use. Use the time to explore what supplies are the most cost-effective for your business and stick with it.
Understanding the major areas in which you incur costs can help you manage them. On top of that, keeping them under control will help you remain profitable.
Better Your Average Order Value (AOV)
Let us begin by covering different tactics to increase your AOV. The offerings will vary based on whether you manage a full or quick service restaurant. But, strategies remain the same. Remember, the technique of upselling a product to a customer should be a natural response.
Outlined below are questions and statements that your staff can ask to upsell to a guest. We have broken them down for FSR and QSR. These questions are also in order of the steps of service.
Full Service Restaurant:
- “Can I start you off with a large format bottle of still or sparkling water?”
- “May I get you something to drink such as one of our featured cocktails?”
- “Would you like to begin with one of our appetizers or small plates? We are known for X, Y, Z.”
- “Since you had this to start, I recommended getting this dish for your entree.”
- “Would you like to get a bottle of wine that pairs well with your dinner?”
- “Please take a look at our large plate section that is perfect for family-style sharing.”
- “Can I offer you a dessert menu? Our pastry chef makes all these in-house and fresh to order.”
Quick Service Restaurant:
- “Hi, welcome to (your business). Would you like to try our new (insert new item) today?
- “Awesome, can I make that a combo for you?”
- “Would you like to add cheese to that sandwich or protein to that salad?”
- “Instead of the regular sides would you like to add one of our premium sides?”
- “Have you had a chance to browse over our recently added desserts?”
- “Any extra sauces I can get you with that?”
While these questions are only a beginning standpoint to upselling, they work. It’s important to be able to read the guests as they are dining.
For example, upselling shouldn’t feel pressured. If guests are comfortable with only water, don’t have staff push cocktails. Instead, offer one of your non-alcoholic beverages. Each time your staff touches a table, they need to pick up on visual cues to decide what to ask. This then can lead them to appropriate upselling questions to increase your AOV.
Ways to Increase Server Efficiency
Restaurants know that time is of the essence. Getting more out of the time of your business hours is one of the best ways to increase your profits. Since servers have the biggest opportunity to do this, we’re going to cover tactics for them.
Proper Menu Training
The ways in which servers increase their efficiency can benefit your whole restaurant. So, let’s start with the importance of knowing what’s on the menu.
One of the most time-consuming matters in a restaurant is taking an order. Because of this, proper menu knowledge is a must. It’s frustrating to the guests and the server when they aren’t able to answer menu questions.
This is why it’s essential to hold menu training for all your staff handling food. Do this each time there are menu changes or updates. Invite all front-of-house and back-of-house staff to take part. In restaurants, it’s all hands on deck. If you have a busser running a dish, it’s crucial to at least know the basics.
For servers, menu knowledge needs to be taken to the next level. Today, diners need to make modifications due to allergies and dietary preferences. It saves time if the server knows right away what they can or can’t change on each dish.
Everybody On The Same Page
The second way to increase efficiency is consistent training between each employee. This strategy also ties in with the tactic above. This means that it’s best if you are training everybody the same way. To make this happen, have an assigned team member and chef do each training for new employees.
By doing this, you are creating a consistent system for your operations. The assigned server will train a new employee the same way on:
- Placement of plates, silverware, and condiments
- Side-work such as roll-ups and restocking
- Steps of service at the table
- Cleaning procedures
- Where to look for 86’d items or food/drink changes and specials
- How to address the chef in charge when asking a question
Training is not limited to the items above but when learned the same way, it can increase efficiency.
Get to business
In the end, you know your business more than we do. The strategies in this blog post are set up to help increase your profits. Be proactive and start with the approaches that best fit your restaurant.
Operating a restaurant comes with lots of challenges. Your restaurant POS system shouldn’t be one. The best POS system will always be growing to provide the best service and be transparent, like CAKE. Our simple and cost-friendly system allows you to save money and grow your business. We offer the highest quality partnerships that help you manage every aspect of your business.
Use all the tools above to keep your costs down, and your profits high.