As we slowly move into what is hopefully the “post-pandemic world”, restaurants and bars around the globe are beginning to reopen their doors to guests and look at ways they can optimize their profitability.
Yet just because regions are opening back up, doesn’t necessarily mean that it’s going to be an easy ride for restaurants and bars. In fact, there are new challenges that the hospitality industry needs to overcome, particularly when it comes to consumer confidence and rising labour costs.
The best way to overcome those challenges, and at the same time maximize profitability, is through planning and preparation.
In this blog, as discussed by Sculpture Hospitality inventory management specialist consultants Patrick Cottrell and Joe English in the below webinar, we lay out four steps that will pave the way for the success of your restaurant or bar.
Step #1 - Analyze table revenue to understand where your money comes from
Understanding where your restaurant or bar’s money is coming from is crucial, especially if you are in the stages of opening back up after COVID-19 restrictions. To maximize profitability moving forward, you need to start thinking about your table revenue.
Start calculating how many tables and chairs you have, and look at whether you have enough seating in your establishment to achieve your financial goals. The idea here is to gain an understanding of how much money you can actually make with the seating and the facility your business has.
Step #2 - Look at your operational hours
Now that you have an understanding of what your restaurant or bar should be financially achieving with its seating capacity, it’s time to analyze your operational hours and how they might be impacting your profitability.
For example, are you filling your seating capacity with patrons during your opening hours? From this, you should be able to calculate how much money your business is making from either each dining experience or time of service (breakfast, lunch, dinner etc.).
Once you have these insights, you can create a plan to fill the times where your restaurant or bar isn’t at capacity. If your restaurant or bar isn’t fully booked, you need to come up with creative ways to draw those patrons in.
Step #3 - Evaluate your guest count
Now it’s time to evaluate your guests. Look at your headcount and see what their spending habits are and how long they spend in your establishment. Some restaurants and bars, especially those where people come to work or have meetings, may need to put a time limit on the amount of time that guests can spend at their table - after all, turning tables is the key to profitability.
Don’t worry though, customers are increasingly understanding (especially during COVID-19) that restaurants need to put time limits on guests to encourage table turnover. After all, guests are now there to support your business. The other option here would be upselling instead of time limits.
It’s also important to analyze what guests are purchasing. Are your guests only buying an appetizer, or are they having a full meal? Maybe your appetizers are too big. Value is great but if someone is coming in and only spending $12 on an appetizer but they’re not moving on to a second dish, then you’re losing profits.
Proper food and liquor inventory management will help your restaurant or bar better use its stock and create dishes that maximize your profitability.
The last thing to understand about your guests is who they are. You will want to gain insight into their spending habits and how much they want to spend in the post-pandemic world. This will give you the information you need to better plan and prepare your restaurant or bar for the next year.
Step #4 - Make sure you’re properly staffed
It’s easy for a restaurant or bar to be on either side of the fence when it comes to staffing. Some businesses are understaffed, while others are overstaffing. If you’re understaffed and filling your seats, then the guest experience is going to suffer. A poor guest experience can seriously impact customer loyalty and long-term profitability.
On the flip side, you need to really look at how you’re spending your staffing money. Having too many staff for business volume is also going to have a major impact on how profitable your restaurant or bar is.
Maximizing your restaurant profitability
By analyzing the above four steps, your restaurant or bar can make calculations that maximize its profitability. By putting insights into table revenue, operational hours, guest count and staffing into a matrix, you’ll be able to gain clear insight into how your business can become more profitable.
Need further help? Sculpture Hospitality’s team of inventory management consultants are here to ensure your restaurant or bar is profitable. Get in touch with us today to find out how we can help.