Running a restaurant is tough. As the recent collapse of Jamie’s Italian shows, even chains owned by celebrity chefs can fail. However, it’s not all doom and gloom. While conventional wisdom is that most restaurants fail in the first year, the reality is actually very different.
According to Forbes only 17% of US restaurants close in their first year. In the UK it’s a similar picture (around 15.5%) with haulage and courier companies more likely to fail within the first 12 months than restaurants (about 17.3%).
Nevertheless, if you run a restaurant you do need to maintain a competitive advantage if you are going to survive the first year and thrive beyond that. In this article, we look at 6 ways in which you can improve sales at your restaurant in order to ensure a brighter, more successful future.
Offer online ordering
Increasingly customers want convenience. This means allowing them to order from you wherever they are. The advantage of online ordering is that it frees up valuable real estate in your restaurant because your customers don’t have to wait around for a table to become available. It also helps to ensure that your kitchen staff remain busy even at times when it may be quiet in the restaurant. Another advantage of online ordering is that it can help boost your website’s online presence, especially if you allow ordering direct rather than through a service such as Just Eat, Uber Eats and Deliveroo. The downside, of course, is that you have to invest in a website. However, even this is a lot cheaper than it used to be thanks to companies which provide customisable off-the-shelf templates for restaurants.
Use social media/business listings
The great thing about social media is that it enables you to promote your restaurant online for free – well almost. OK you will need to take some time out of your day promoting your restaurant, but it will almost certainly be worth it. Try to engage with as many customers as possible in a cool level-headed away even when you receive negative comments. Instagram, in particular, provides the perfect outlet for sharing photos from your menus. You should also make sure your business profile is updated on places like Google My Business so people can easily find your restaurant using services like Google Search and Maps. Importantly, a Google Business listing is still free although Google may start charging for the service in future. See article here. If you have a small budget, running paid promotions on Facebook which target certain types of customer in your area can be a great way to encourage people to try your menu or let them know about special events such as live music or lunch deals.
Offer customer loyalty program
Restaurant loyalty programs are a good way of boosting sales. According to research in the US, adopting a customer loyalty program increases the number of visits to a restaurant by an average of 35% and the average spend by 46% among card holders. These days you don’t need to issue paper punch cards for customers either. Instead you can get digital loyalty programs which will easily integrate with your restaurant’s ePOS (Electronic Point of Sales) system. One of the advantages of a digital loyalty program is that it enables restaurants to track how often they are used by customers and what they use them for. Another option which can help to increase both sales and loyalty are ‘money-off’ vouchers. Often these are received by customers who sign up to an email database and are a great way to boost sales at times of the year that it might be quiet, for example in January when they don’t have much money or in the summer when they’re away.
Run a tight ship!
It may sound obvious, but one reason why restaurants fail is because they are unable to keep tight control over their costs. Often this is because restaurants are run by former chefs or those who attended culinary school where business basics may not have been taught. If you run a restaurant and don’t want to take control of important matters like finance, HR, payroll and accounting then you will need to recruit a manager who will do this for you. Particularly important is to keep a close eye on cashflow so you are able to pay for your premises (rent, business rates etc.) out of the receipts from your customers. At the same time you also need to be smart about your purchases. While it may be tempting to rush out and buy the trendiest, most expensive, furniture is this really the best investment in your business? In many cases it may be worth shopping around for cheaper furniture and investing slightly more in sourcing the best ingredients possible.
Train servers on upselling
While waiting staff should certainly never be too pushy, they can play a vital role in helping your customers to spend more money. For example, it’s important they fully understand the menu, in particular any specials or exciting cocktails you may have to offer. By describing in delicious detail the dishes you have to choose from, waiters/waitresses can encourage diners to try new main courses and order side dishes they maybe wouldn’t ordinarily have chosen. After the main course, they may also tempt diners into getting something sweet by waxing lyrical about the delicious desserts on offer when ordinarily the customer may have simply asked for the bill!
Maximise your table turnover rate
For restaurant owners, one important way to drive revenue is by increasing table turnover rate. Currently many restaurants are slowed down considerably because waiting staff are using card readers that don’t communicate effectively, if at all, with the restaurant’s ePOS system. This means when the diner has finished their meal, the waiter/waitress has to go back to the main till and input the cost of the meal manually into the card reader before returning to the table. Not only is this time consuming, it also increases the possibility of human error with the cost of the meal having to be re-keyed into the card reader.
Far better is to use a system such as the one Paymentsense offers. Called Connect, the cloud-based solution provides all the necessary data from the ePOS system directly to the handset. Using the Pay at Table feature, waiting staff are able to print the bill, split the bill and close the table without having to go back to the till. As a result, it’s estimated that tables can be turned up to four times more quickly.
Running a restaurant certainly isn’t easy. However, using the latest technologies which enable faster and more accurate payment processing, owners can help drive much greater restaurant efficiencies and thereby improve profitability.