With costs constantly rising and restaurants popping up seemingly on every corner, owning an eatery is an uphill climb even at the best of times. In addition to providing stellar customer service and offering foods and beverages that can’t be beaten, one of your biggest challenges will continue to be how to consistently make a profit. Fortunately, there are a number of concrete actions that you can take to raise your financial prospects and distinguish you from the competition.
Lay your financial foundation.
Without a consistent and reliable system in place to manage your finances, even the most profitable establishment may fail. The reason? Human error becomes almost inevitable. Contrarily, when your bookkeeping is organized and protocols are in place, you and your staff will find it much easier to make it to the end of the day without a major shortfall.
Investing in a modern point-of-sale (POS) solution from your merchant account provider can make this a lot easier to do. Much more than just a few credit card swipers, your POS can become your restaurant’s most helpful silent partner. In addition to facilitating your customers’ credit and debit card payments, your POS is a behind-the-scenes workhorse. It can make numerous tedious tasks such as payroll, inventory management, and customer relations flow with ease, leaving you with more time to do what you do best: run your restaurant and build a relationship with your customers.
Perhaps the most integral task your POS can help you perform has to do with data analysis. Believe it or not, your POS can generate all sorts of reports, including those having to do with sales, inventory, profits and losses, and other financial matters. When tax time rolls around, you’ll wonder how you ever did your taxes without your new POS system’s ability to synthesize information and generate reports according to your specifications. By seeing where you are losing money as well as what is working well for you, you’ll have a handle on the steps you should take to maximize your profitability moving forward.
Focus on your website.
Getting your 14-year-old nephew to launch your homepage may work fine for your personal site, but you’re trying to hit the big time now. If you spend two or three thousand dollars on a professionally designed website created by a company that specializes in restaurants, you will likely find that your investment will pay for itself many times over. That’s because having an online presence these days is not a luxury or a fad; it’s virtually a requirement if you want to attract customers.
To that end, take time to set your site up for success. That means getting professionally shot photographs of your food and drink offerings as well as headshots for yourself and other management staff. Since many customers use online reviews as a way to decide which of several restaurants they will try on a particular day, also make it a priority to accumulate several positive, well-written, and detailed testimonials from happy customers. If you’re just starting out and don’t have any yet, here’s where you can enlist the help of family and friends.
Overestimate your reserves.
If you are just starting out or have recently completed a major makeover, you’re probably excited about launching your restaurant and optimistic about its success. However, you should be aware that new places and trends can take longer than you think to catch on. There may be a few gut-wrenching months in the beginning when the word of mouth hasn’t quite started to hum yet. If you don’t have enough in savings to weather these initial bumps in the road, your café’s doors might be shut before you even have a chance to show the world what you had to offer. Therefore, experts recommend that you keep an extra 40 percent over your budgeted amount on hand to cover the unexpected. If you don’t spend it all, you can simply roll the remainder back into your business.
Be sure to have enough tables for two.
Did you know that most restaurants have a shortage of two-tops even though parties of one or two go to restaurants more than any others? They also tend to stay for a shorter period of time, enabling the tables to turn over more quickly and be more profitable at the end of the day. If you have enough of them in your restaurant and they are located in favorable places away from the door and the bathrooms, your eatery will become popular, and you will not develop a reputation for never having space available for small parties.
Develop a social media presence.
Try this experiment: Go to the downtown area of your city. Walk down a thoroughfare in the business district and see how long it takes to notice someone with a mobile phone. We predict that you will spot someone in a matter of minutes if not seconds. This tendency of today’s consumers to be virtually inseparable from their cellphones can work in your favor as a restaurateur — and in more ways than just through the use of your website. Social media sites like Facebook and Instagram offer unparalleled opportunities for you to advertise your business and spread the word about your brand. Nothing stimulates the appetite quite like watching one of your friends enjoying a meal at their favorite restaurant. Take advantage of this phenomenon by encouraging customers to write reviews and take pictures of your carefully crafted entrees and beverages. Creating such buzz can be the perfect recipe for increasing your profits.
Consider taking reservations.
If you own a full-service restaurant, you should definitely leverage the power of reservations. That’s because relying on walk-in traffic exclusively leads to a bunching up of business at certain popular hours followed by gaps of time when there are virtually no customers. If you set up a reservation system, you can encourage customers to eat at more varied times, thus spreading out the business throughout the evening. Having this type of system also helps you to put your restaurant across as a place that is in such high customer demand that it requires advanced planning in order to eat there.
Hire a consultant.
Finally, succeeding in the restaurant business is notoriously difficult. That’s why it often makes sense to stack the deck in your favor by hiring a consultant who understands the ins and outs of the industry and can guide you around the biggest pitfalls. Just be sure that the person you hire comes well-recommended from trustworthy people and is willing to be honest with you both about what you are doing well and what needs work. If you’re not sure how to find a credible consultant, ask the owners of your top three favorite restaurants if they hired anyone to help them get off the ground. Unless you are in direct competition with them, most people will be glad to give you helpful advice.
Now that you are living your dream of operating your very own restaurant, it’s time to make the most of every day. Remember that you will make plenty of mistakes along the way and that failure is a necessary stepping-stone to success. As long as you plan carefully, get help when you need it and remain as organized and detail-oriented as possible, you can increase the chances that your eatery will soon be the talk of the town.