Restaurant profitability is essential to being a successful restaurant operator. Whether you own the business or are just a partner, running your own establishment is a key part of your personal and professional life.
However, running your own business comes with challenges that must be addressed in order to succeed. In this article, we’ll outline some helpful tips for maximizing profitability and reducing costs for your restaurant.
The team at EZ-Chow are huge believers in data and insights and how those two combined drive smart business decisions around customers, menu management, inventory, staffing and so on.
Insights from data
When you understand what drives your customers, you can focus on creating a great experience. You can also use this information to inform your marketing strategies, to improve your operations and to create new strategies. The more you know about your customers, the better your business will be.
A primary goal of data and analytics is to understand your customers and what drives their behavior. You can use this information to inform marketing strategies, to improve your operations and to create new strategies. Check out our recent article that centered around “How to Drive Your Restaurant Business with Data, Analytics and Insights”. (https://ez-chow.com/how-to-drive-your-restaurant-business-with-data-analytics-and-insights/)
Stay Organized and Streamline Operations
The ability to stay organized and in control of your operations will impact your profitability in a number of ways. One is the ability to track what you’re doing, why your doing it and what changes need to be made. These decisions can have an impact on costs and revenues, allowing you to drive profit improvement – be aware, question why, use organizational tools and scheduling.
In addition, a properly organized kitchen and front-of-house will help you better meet customer and menu expectations or needs while finding efficiencies that allow you to streamline operations and save on costs.
Minimize Waste and Increase Revenues
The goal of any restaurant is to maximize the yield from your ingredients or products. When using the right ingredients for the right amount, you can maximize efficiency and be more consistent in-kitchen.
In addition, having a strong menu and food cost plan can help reduce costs while also planning out your menu to take advantage of seasonal ingredients or using ingredients within multiple menu items. Yes, certain menu items may require a higher level of waste but ensure you are pricing correctly to compensate for the waste.
Planning is your friend and if you do have a seasonal menu or daily specials, ensure you are taking full advantage of that plan with correct pricing and meeting your revenue expectations.
Review Pricing and Market Strategies
One way to maximize profitability and reduce costs is to review pricing and market strategies – rely on the data you have available from your restaurant systems (Point of Sale system, online ordering, loyalty programs etc.) to understand what is being ordered and when. This is especially true when it comes to pricing and your menu. When you’re assessing your pricing and market strategies, make sure you do a thorough assessment of your business, staffing and your competitors. This assessment will also include your target customers, your market, and whether your prices are appropriate.
Take Advantage of Technology You Control
Technology that you can control is another tool that you have that will help to maximize profitability and in-turn, reduce costs. A strong POS (Point-of-sale) system can help you manage your operations, customer interactions, and inventory while providing you with valuable data to help drive your decisions – this can help you stay organized, track your expenses, track your menu items and find potential cost savings. Technology can also be used to schedule customer orders, inventory management, and reporting. In addition, a strong CRM system can help you manage customer relationships and interactions bringing customer back into your restaurant while providing you more customer data to help drive smart decisions.
Keep an Eye on the Bottom Line
While it’s important to optimize your operations and reduce waste, it’s also important to keep an eye on the bottom line making sure your costs are under control. Understand your month-over-month and year-over-year numbers. That will help you understand events that are coming up that you need to plan for and understand the natural ups and downs in your business. If your revenues aren’t at an appropriate level, make the necessary changes and rely on the data to help you in your decision making. At the end of the day, you must ensure you’re profitable and when you are profitable, you can reinvest in your brand, add new products and services.
Don’t Lose Your Focus
While it’s important to optimize your operations, it’s also important to keep an eye on the bigger picture. Data and insights should be a driving force to help with smart decisions, menu management and overall profitability. Plan, schedule and have the right technology that sets you up for success.
EZ-Chow has solutions such as an Online Ordering, Self-Ordering Kiosks and Rewards/Loyalty Solutions that integrate into your existing POS systems. To learn how EZ-Chow can help you with these initiatives and more, get started by contacting us here.