After the unexpected economical slow-down that took over the world in 2020 and a good part of 2021, running a successful business started seeming like a distant dream for many business owners.
Industries like air travel, accommodation and catering have suffered the biggest hits while we were trying to adapt to a new reality. But luckily, enough time has passed since the first breakout. And as 2021 is coming to a close, profits are becoming more of a reality for businesses again.
Especially for those mentioned above.
If that is still a distant dream for your restaurant business, it’s either because you’re not seizing all the sales opportunities you have or because some costs optimizations are yet to be made.
To help you keep more money in your business, we have asked the experts at AccountingPreneur to share some of their knowledge on how to increase the profitability of restaurants. Here is what they advise:
2 Uncommon Ways to Increase Your Restaurant’s Profits
In any business, regardless of the industry, there are two ways to better profit: increase the income and reduce or optimize the costs. Today we’ll discuss the latter:
- Reevaluate the Contracts with Your Providers – Then Negotiate Some of Them
Starting with each food supplier and finishing with the company that’s providing electricity to the restaurant, do not allow for one contract to go unrevised.
The idea is simple – if you pay money to someone, make sure you’re getting the best offer you can.
This doesn’t mean you should haggle.
But you can check if other providers offer the same quality at a lower price.
Or, you can negotiate a lower overall price in exchange for larger payments at a time.
Note: this principle doesn’t apply to staff. Your employees are the heart of your business. Make sure they are happy with their payment or with the additional privileges that they receive as employees. A satisfied staff member will earn you more money than you could save by cutting down their payment.
- Calculate the Stock Needs for Fresh Products
A common mistake that could cost you real money yet goes unnoticed is buying more fresh food than you need. If you find yourself throwing away perishable items or cooked food every couple of days, what you’re really throwing away is the money you paid for it in the first place.
To curb that loss, take a look at the sales that the restaurant has made in the last three months. Then, calculate the stock need from one delivery to another. You can add 10% to each item on the list if you expect an increase in sales and orders. Now you have a practical estimate to see exactly how much fresh produce you actually need between deliveries.
Additionally, you could train your staff to use the least fresh products first, so that they never get a chance to go bad. If after a couple of weeks you’re still cooking with products that are not very fresh, this might be a hint that your stocks are too big or that you need to replace your fresh produce provider.