Is your bar or restaurant losing profits? Feel like dollars are going down the drain but you can’t pinpoint the leak? You’re not alone. That’s why Buzztime teamed up with Sculpture Hospitality for a webinar to reveal 5 hidden sources of lost restaurant and bar profits. Watch the webinar here.
From over-pouring to underselling, this webinar recap helps you identify profit-busting red flags. Then, you’ll score strategies for fixing the leaks – and regaining restaurant and bar profits.
Most experts on restaurant and bar profits recommend that labor costs make up 20-30% of your gross sales. If you crunch the numbers and see you’re over 30%, that’s a serious red flag.
If labor costs are eating into your restaurant or bar profits, chances are it’s due to one of these “big 3” problem areas.
Tactic A) Reduce Turnover to Increase Restaurant and Bar Profits
The average restaurant loses $146,600 annually to staff turnover. It doesn’t matter if the employee left, or you let them go. Retraining and rehiring are costly undertakings. You want to avoid staff “churn” using these tactics:
Tactic B) Staff Based on Sales
Many managers overstaff the bar, fearing a customer will have to wait more than a few minutes for a drink. Even having one extra bartender each night can cut into bar profits.
So how can you keep customers satisfied and maintain those bar profits? Turn to your POS. Use it to track sales trends based on day, day-part, and time of year. Then, schedule staff based on those trends. If things get busy, you can keep a list of employees who don’t mind being “on call.”
Another smart strategy for staffing based on sales is to use an online reservation platform like www.OpenTable.com. In a glance, you can see which tables are booked – and plan staff accordingly.
Tactic C) Go Beyond the “Clock In”
You might think you’re protecting restaurant and bar profits by requiring staff to clock in on the POS. Just be sure staff isn’t cheating the system! The manager should make her presence known by walking around during each shift change. If employees are dragging the clock by socializing or checking their phone, the manager should give them a warning. Do you really want to pay employees when they’re wasting time (and your restaurant and bar profits)?
You may be winning the social media game with lots of “likes.” But if your bottom line isn’t feeling the love? That’s a red flag.
It’s easy to get caught up in the quest for social media success: How many people liked my Instagram post? How many followers do I have? However, these are meaningless numbers unless you have a strategy in place that aligns with your business goals.
Social Media Rule of Thirds
We’ve all been told to keep things “non-salesy” on social media. But at least a third of your activities should be focused on directly promoting your business – and driving your restaurant and bar profits. Here’s how the “rule of thirds” works:
Promote with Purpose to Drive Restaurant and Bar Profits: Focus on Conversions
The 1/3 of your social media posts focused promotions should be trackable – with a direct conversion. Not just a like. Not just a “share.” Here are examples of how to turn your social media activity into restaurant and bar profits:
Printing your menu gets expensive…fast. Made a typo? Reprint. No longer serving an item? Reprint. Posters and table tents also take a chunk out of your restaurant and bar profits.
Bring More to the Table with Tablet Menus
It’s not just about boosting restaurant and bar profits. Today’s guests are hungry for a digitally enhanced dining experience: over 73% believe that technology – like tablet menus – improves their visit.
With tablet menus, guests browse a digital menu then send their orders straight to the kitchen. Here are just some of the benefits to your patrons… and to your restaurant and bar profits:
Catch Their Eye with Digital Signage
Skip printing posters and table tents in favor of customizable digital signage. Companies like Buzztime provide software that turns your existing TVs and screens into brilliant ads. You can promote menu items, events, specials… anything you want. As opposed to printed signs, digital signage can increase “point of sale” purchases by 33%.
Unless you match up inventory depletion to sales, you won’t be able to spot signs of employee food/drink/cash theft. Most operators are not running this critical report. In addition, if employees are stealing customer credit card information, there is virtually no way to know.
It’s a sobering fact…75% of employees steal from workplace at least once. Without proper controls in place, you’re putting your restaurant and bar profits at risk.
Employees know that most operators don’t have those controls. So, they fall into bad habits…especially bartenders. They make over-pouring a routine, hook up their friends with free drinks, and may even pocket the proceeds of some drinks instead of ringing them up. You pay the price with thousands of dollars in lost bar profits.
Tackle Your Tracking Methods for Inventory
Keep Your Customers – and Your Restaurant and Bar Profits – Safe with the Latest Dining Tech
Unsavory employees take down credit card numbers, how can you protect your restaurant and bar profits…and your customers?
Use customer-facing dining technology. Some of the same menu tablets mentioned above also come equipped with EMV (“chip”) credit card readers. Guests can securely pay on the device – and their credit card stays with them at all times. The best dining tablets even accept NFC/mobile payments like Apple Pay and Samsung Pay. As an added bonus, if you take steps to safeguard customer financial security? 85% of guests will be more loyal to you.
If you’re at capacity every night but your restaurant or bar profits aren’t hitting the mark, focus on boosting check averages.
Large checks don’t just happen. Without training, most servers and bartenders don’t possess the skills to upsell.
This isn’t about turning your team into sleazy car salesmen. Instead, effective upselling puts the customer’s needs first. For example, when a customer says “I’m too full for dessert,” servers can suggest a sweet treat…to go. The guest leaves with dessert, you get the extra restaurant or bar profits. Here are more examples of upselling done right:
To really see a lift in restaurant or bar profits, run competitions for your team. An easy one is menu item bingo. Print a sheet with your highest margin menu items on a bingo board and hang it in the back of the house. The first server to fill in a row of items on the board – by selling them to customers – gets a prize.
In your quest to boost restaurant or bar profits, first see if you can uncover these 5 hidden losses in your business. Now that you know where to look, you’re one step closer to running a successful, profitable operation.