The most profitable restaurants in the country excel at doing the vital things very well.
If you’re wondering how to improve restaurant profits, here are 5 critical areas on which to focus:
1. Staff Empowerment
Successful restaurants have trained their staff exceptionally well. They also tend to “keep no secrets.” That is, everyone knows how and where the restaurant makes money, and knows their roles and responsibilities relative to those revenue streams. That type of knowledge is empowering to restaurant staff across a number of fronts.
The Skinny: Employees can make efficient decisions about work practices if they know where the money flows and grows. The first secret to success and more profits in the restaurant business is in having no secrets. Develop a “sense of ownership” with your staff by clearly outlining profit centers.
2. Analyze your “product”
Knowing what it is that people are buying when they come to your restaurant is important. That information helps you determine where to put the most effort in terms of staff service, cost analysis and marketing of your “product.” For some restaurants the profit center may be the bar. Everywhere people stop or stay more than 10 minutes in your restaurant is a component of your success.
The Skinny: Whatever your approach, there are opportunities to learn more about your customers. Coach your staff to discuss the reason for patron visits and what they like most about the restaurant. That information serves as an ongoing foundation for profit analysis. “What do you like about us?” is the simplest question to ask and the greatest way to identify potential profit sources.
3. Be social
As noted in the “analyze your product” commentary above, there are great social tools that can help you build customer relationships and increase profits. You simply need to use social media in the proper way. Today’s customers like the feeling that they have a friendship with you. That means you should make it easy for them to Friend you on Facebook, follow your Twitter feed or sign up digitally to receive your newsletter or menu updates.
The Skinny: People like the inside scoop and getting deals for being connected. Make your social media connections visible in your restaurant, user-friendly to every type of customer (so people don’t feel excluded) and virtually accessible on mobile devices so that customers “on the go” can take advantage of deals that make them want to come back, and can share interesting information with their friends.
4. Make it easy to spend money and “buy into” your restaurant
Today’s customer wants to pay on the go. That doesn’t mean dine and dash. It means you should provide them options to pay using their credit or debit card with mobile devices on the spot, using mobile credit card processing that is safe, secure and viable to increase your restaurant profits.
The Skinny: If your restaurant excels at entertaining people, customers may not want the buzz-kill of stomping up to the cash register to pay. Instead, go to their table and take care of it all for them there. Using tablet POS (point-of-service) onsite can help your profits. You can offer up calculations on tips and sell t-shirts or other merchandise by adding it to the bill with mobile payment processing. Your waiters and waitresses become salespeople for the restaurant and you can create new profit centers through other branding initiatives from gift cards to event registrations.
5. Find and develop partnerships
When you stop viewing your fellow restaurant owners as competition and start viewing them as partners, you can build your customer base in new ways. Sure, many people like the warmth of coming to their favorite restaurant every week, and you should offer rewards to your regulars for their loyal business. But many customers like to vary their routine, and those customers often welcome a referral and will offer one in return for your business. In the tourist town of LeClaire, Iowa where the American Pickers cable TV show is based, business is growing for everyone because restaurant and business owners from wine shops to restaurants to a distillery are all sharing their customers and providing referrals.
The Skinny: If you’re not comfortable sharing business with other restaurants, then consider talking to art galleries or the local gym, with the idea that providing customer rewards programs and referrals can build business for everyone.
Building your restaurant into a more profitable business takes work, but with the right strategies you can count on making your existing customers happier and landing more business with your ingenuity and hospitality.
This post was contributed by Greg Constantine. With over 25 years of experience in the payments industry, Constantine provides expert business leadership and marketing strategy development to SecureNet (and its clientele as Executive Vice President and Chief Marketing Officer. From Fortune 500 companies to successful startups, he has an extensive background in entrepreneurial guidance, marketing, sales, product planning, client services and operations management.