5 Best Ways To Maximise Restaurant Profits.

A lot of people assume that having experience in the restaurant industry is the key to running a successful restaurant. What you may not realise is that you may have worked for restaurants, and successfully do, but you have not been a restaurant owner, unless you start a restaurant of your own.

If you have been following my previous articles on this subject, by now you should have a good understanding of the fundamentals of running a successful restaurant business. It might be wise to re-read those articles, or bookmark them to grab back whenever you encounter a subject that I have written about! Today, I am going to discuss some more points that are important to consider before you open your own restaurant.

Knowing Failure

• A restaurant business is the toughest businesses to successfully launch.
• 60% of restaurants fail in the first year.
• Lack of planning is considered to be the biggest reason for failure of restaurants.
• While it is exciting, it’s also time consuming and needs constant attention of the owner.
• From kitchen appliances and menus to floors plans and staff selections, the planning stage will make or break your restaurant.
• Spend a lot of time figuring out every detail of your restaurant before you start making dinner for a customer.

Here are some trade secrets to help you plan, fund, and manage your new restaurant.

Preparing for Failure

• Plan for bumps in the road. Yes, if you don’t experience them, great!
• When you do hit a bump, evaluate the numbers and your processes.
• Plan in advance so you never go over budget.
• Keep extra money, untouched, to cover the unexpected.
• A little analysis of the situation will help you see what you might have missed before.
• For example, if you are running high on costs, cut down daily vegetable and meat supply deliver to twice a week delivery.
• Initially, keep an eye on every penny that goes out in running the restaurant.
• Maintaining a journal is always advisable.

Marketing Plan

• A significant objective of advertising is to change the existing attitude- of an individual, a gender, a society or an age group.
• You cannot completely rely on word of mouth to bring in many customers, so you’ll need a marketing plan in place to keep new people streaming through your doors.
• It takes time to market your new place, attract a crowd, and get people to come back for more.
• Marketing is not just to get customers, it is also to get investors.
• Depending on the nature of your business, consumer receptivity to your marketing strategy and messages aimed at altering their beliefs will tend to vary a great deal.
• High quality argument is required to persuade the investors; they are likely to scrutinize the argument and come up with questions.
• Would-be investors are going to use some logic to test the numbers about the “reasonableness” of your business. So, make sure you have a good plan in place.
• It has been proven that marketing certainly leads to increase in sales, compared with no marketing.

Marketing Ideas

Don’t know how to start marketing and advertising your product? Use these quick tips:

• Join the local business association.
• Participate in community events and give out food samples.
• Utilize social media channels.
• Offer discounts to new customers.

Planning Capital

As discussed before, as with every business, make sure you know how much money you need to get your restaurant off the ground.

• Restaurants aren’t profitable overnight.
• Be prepared to lose money for the first six months, and plan accordingly.
• Generate enough startup capital.
• Know that you will need three pools of money.
• The first pool is for one-time costs like equipment and a cash flow system.
• The second pool is to cover the restaurant expenses for at least six months.
• The third pool is to cover your personal bills for at least six months.

There are several potential ways to measure advertising effectiveness. It is always advisable to contact a local advisor to understand the best way to advertise your product. HyperEffects helps you reach out to your target audience in the most effective way, through advertisements custom-tailored for your product and target. At HyperEffects, our aim is to make small business owners aware of different advertising programmes available for them; our one-hour free consultation program is specially designed to achieve this.