Running a successful restaurant in today's competitive landscape requires careful planning and strategic execution. While the industry can be challenging, implementing the right strategies can help your establishment thrive and stay ahead of the competition. In this article, we will share valuable insights and tips to futureproof your restaurant, ensuring its longevity and profitability.
Embrace Consistent Quality as a Priority
Building a strong reputation for consistent quality is crucial for the success of any restaurant. Take inspiration from major food brands like McDonald's and KFC, who have earned customer loyalty through their commitment to delivering the same great-tasting food, attentive service, and inviting ambiance every time. To achieve this level of consistency, clearly define your expectations for both kitchen and front-of-house staff, and motivate them to consistently meet these standards, even during peak hours. Regularly evaluate the taste of menu items, cleanliness of the restaurant, and speed of service. Consider employing mystery shoppers during busy periods to provide valuable feedback on the customer experience.
Cultivate a Supportive and Engaged Staff
Delegating tasks and empowering your team is essential for efficient operations and long-term growth. As a restaurant owner, you can't do everything on your own. Identify the strengths and weaknesses of your staff and gradually delegate responsibilities to them, such as financial management, HR, inventory control, and scheduling. By entrusting them with specific tasks and providing proper guidance and support, you foster a sense of ownership and teamwork. Organize team-building activities and social events to strengthen the bond among your staff members. When your team feels valued and connected, they will be more motivated to contribute to the success of your restaurant.
Explore Expansion Opportunities
If your current location allows for growth, consider expanding your restaurant to accommodate more customers. Calculate the cost of renovating additional space, including lease or construction expenses, and determine the number of customers needed to ensure a return on investment. However, if expanding within your current location is not feasible, thoroughly research potential new markets before opening a new restaurant. Opening a new establishment generally incurs higher costs compared to expanding an existing one, so weigh your options carefully.
Harness the Power of Online Reviews
Online reviews play a significant role in shaping customers' perceptions and influencing their dining choices. With platforms like Yelp and Google Reviews, everyone has a voice and can share their experiences. It's crucial to engage with both positive and negative reviews promptly. Responding to negative feedback demonstrates your commitment to resolving issues and improving the dining experience. Encourage satisfied customers to leave reviews, as positive ratings can enhance your online reputation over time. Remember that poor experiences not only result in lost repeat business but also increase the risk of negative reviews, which can deter potential customers.
Optimize Your Purchasing Practices
Managing costs without compromising quality is essential for long-term sustainability. Aim to keep your food costs within the recommended range of 28% to 35% of your total expenses. Seek out the best ingredients that fit your budget and consider establishing relationships with vendors who offer volume pricing or special deals. Carefully evaluate expenses related to restaurant payment processing, food preparation stations, dinnerware, furniture, and decor, ensuring you strike a balance between quality and cost-effectiveness. Leasing equipment can also be a viable option, providing flexibility and potential tax advantages.
Establish a strong Online Presence
In today's digital age, having a robust online presence is crucial for attracting and retaining customers. Start by creating a Google My Business listing for your restaurant and maintaining active social media channels. Pay close attention to your website, as it serves as a virtual storefront for potential customers. Keep your website updated with essential information such as your menu, location, opening hours, and links to your social media profiles. Additionally, incorporate enticing images of your beautifully made dishes.
Reassessing Menu Pricing
The cost of ingredients is continuously rising, which can eat into your profit margins if you maintain the same prices. However, increasing prices can be challenging for established restaurants as regular customers may have certain expectations about pricing. So what can you do? Consider options like reducing portion sizes or replacing unprofitable menu items. Alternatively, you can inform your customers about price increases and the reasons behind them through clear signage. It's important to carefully weigh the consequences of each course of action. Most restaurants prefer to make pricing changes gradually rather than all at once. Regularly review ingredient costs and the pricing of each item on your menu to ensure a balance between customer satisfaction and profitability.
Prioritizing Customer Retention over Acquisition
While it's important to attract new customers as your local neighborhood evolves, fostering repeat business is even more critical. The goodwill and continued patronage of regular customers are essential for the survival of local restaurants. Experiment with various strategies to enhance customer engagement and retention, such as offering special deal nights, implementing loyalty programs, and hosting tasting events. The goal is not only to give people a reason to try your restaurant but also to provide them with incentives to keep coming back.
Tip: Utilize text message marketing and email blasts to encourage regular customers to visit more frequently. Always ask patrons for their contact details and seek permission to stay in touch. Offer incentives such as a percentage off their next meal if they join your mailing list.
Embrace the Latest Technology (Dashy Dash)
Investing in modern restaurant technology can help you save money and improve both staff and customer experiences. Consider the following recommendations:
- Restaurant management systems: Adopt a comprehensive restaurant management system to efficiently handle various aspects of your establishment, including sales, staff schedules, and inventory management.
- POS systems: Explore options like TouchBistro and Toast, which are specifically designed for restaurants.
- Table tablets: Provide tablets to your patrons, allowing them to independently place orders and even make payments, expediting the checkout process.
- Inventory management software: Implement cutting-edge inventory management software to minimize food waste and enhance profitability, a common challenge faced by many eateries.
- Supply cost manager - If this seems overwhelming Dashy Dash is here to help, we can alert you of cost increases and decreases for products you already buy and provide alternatives offering better prices. We can also help identify contract violations if your suppliers are not adhering to the terms agreed upon, Dashy Dash is a powerful tool to help you do more of what you love and less of what you don't.
Remember that certain technology tools are more suitable for specific types of food businesses. For example, if your establishment focuses more on beverages, consider a bar POS system. Food trucks also have specialized technology requirements. Stay informed about emerging trends in restaurant technology as the industry continues to evolve.
Establish a Delivery Service
During the COVID-19 pandemic, many restaurants had to suspend in-person dining and turned to home delivery services as an alternative. Some partnered with platforms like DoorDash and Grubhub, while others created their own in-house delivery systems, utilizing their servers as delivery drivers. Before deciding, carefully review the terms and charges associated with each food delivery service app and compare them to the potential expenses of handling delivery internally. For instance, Grubhub charges a listing fee of 15-20% and an additional 10% for delivery service. While it can be costly, offering delivery can generate extra revenue during periods of reduced capacity in the kitchen, without requiring additional staff.
Utilize Table Booking Apps
Make the reservation process convenient for your customers by utilizing restaurant reservation software that allows them to book tables easily through your website or popular platforms like OpenTable, the Eat App, Yelp Guest Manager, and TripAdvisor. OpenTable charges a fee of $1 per seated cover along with a monthly subscription of $249. Competing apps typically charge subscription fees ranging from $199 for the basic Eat app to $899 for Resy.
However, it's important to be aware of two drawbacks similar to food delivery apps. First, subscription charges can impact your profit margins. Second, reservation apps act as intermediaries, effectively owning your customers' contact information. While you receive bookings, you don't have direct access to customers' email addresses or phone numbers, making it challenging to market to them directly.
Find a Reliable Accountant
Working with an experienced financial professional who understands restaurant accounting is crucial for maintaining profitability. An accountant with extensive knowledge of the food industry can monitor your expenses and provide early warnings if costs start to escalate in specific areas. They can also ensure that you claim all eligible tax deductions. Having more money in your bank account allows for personal savings or reinvestment in your business.
Rethink Daytime Operations
Many restaurants only operate during evening hours, but paying rent for the entire day may mean missed opportunities for generating revenue. To maximize your potential earnings, think creatively and develop profit-generating ideas for non-traditional busy hours.
For example, consider creating a daytime takeout menu if your kitchen staff arrives early for preparations. If the concept gains traction, you can even hire someone to handle daytime deliveries. Additionally, you can leverage your expertise and passion for cooking by offering special classes. Similar to bars teaching cocktail-making, you can organize beginner, intermediate, and advanced cooking courses for local residents, helping them learn how to prepare their favorite dishes like professionals.
How to Avoid Restaurant Failure
Restaurants often fail due to a failure to address crucial factors within their control. Some establishments mistakenly believe that the current formula will remain successful indefinitely and fail to adapt. Others struggle because of a lack of delegation, leading to burnout. To provide your restaurant with the best chance of survival and success, follow the tips mentioned above and explore additional strategies to increase your profits.
About Dashy Dash
Dashy Dash is a free community powered tool that makes it easy to manage invoices, discover new products & compare prices to help you save money.
With Dashy Dash restaurants and bars can...
...Automatically catch rising prices before they spin out of control
...Benchmark the prices they pay for supplies against those paid by other restaurants and bars
...Easily find alternative products and suppliers in their area
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