There are many creative and tried-and tested ways to increase profit margins in the restaurant industry. This guide will give you some ideas on how to increase sales. There are many strategies that have been proven to work to manage a successful restaurant.

1. Optimize your menu by evaluating it

Take a close look at the menu you have. Is your menu massive? Is it organized? Are the items easily identifiable as appetizers or entrees?

Your should be built strategically to encourage sales. It should be easy to navigate, and feature items you’d like customers to buy. This usually means mixing and combining price points, popularity and niche items in order to make the final decision easier.

This may require a reduction in the number of food and beverage options available. You may need to create artificial scarcity by rotating your food options in a season menu. You are the only one who knows what products sell best, which ones bring in most revenue and which ones are merely a sunk expense. You must test and determine which combination of these categories will appeal most to your customers.

You may have to sacrifice some descriptions, or even cut your menu down to make it easier to use. It’s not enough to upload a photocopy of the paper menu. You should focus on speed, and make as few decisions as possible. Use images, short descriptions and categories to simplify navigation and ease online shopping.

2. Extend your services

Due to the current economic crisis, additional restaurant services are a must. Online ordering and delivery are becoming increasingly popular. But when you don’t have or can only offer a limited number of dine-in seats, you must create other options. If you don’t offer delivery or pickup, you should consider implementing at least one or both of these options.

You can designate specific parking spaces for pick-up. You should have a clearly-marked pick-up zone in your store and an employee who will verify that everything is ready for the customer when they arrive.

It may be more beneficial to grow your own fleet in the future, but for now it is more cost-effective if you leverage an existing ecosystem.

You may want to implement an online ordering system if you decide not to use a particular service. After a pickup order, it’s not a good idea to handle payment by phone or in person. It is time consuming and unfriendly for the customer. Integrate a payment gateway into your website to simplify the process and increase sales.

You shouldn’t include everything on your menu for takeout or delivery. Select items that will be easy to prepare, and arrive in a pristine state. It may be best to only offer your top-selling or most profitable items. You’ll also need to factor in additional overhead costs and incremental costs. Items with a thin margin may not be viable.

3. Buy complimentary Items

No matter what industry, product or service a business is in, it should always strive to increase its customer lifetime value. The CLV is how much money a client will spend with your company over the life of their relationship. It can be over a lifetime, a few months or years, or even just one visit.

Restaurant owners should focus on providing excellent customer service and high-quality food to retain customers. You want to maximize the CLV for each customer, but you also want to make sure that they are happy with their experience. The best way to achieve this is to sell complementary products.

Complementary items include appetizers, desserts, mixed beverages, signature beers, and any other drinks or plates that don’t require an enter. The way you approach these items depends on the price of your entrees. Offer some appetizers at a discounted price or for free if the customer purchases a drink, or multiple entrees. You could also create a combination that is available at a discount.

Whatever route you choose, remember to focus on selling volume. By increasing customer value, you also increase the value of your customer.

4. Maintain your inventory.

Restaurants are notorious for letting their inventory costs spiral out of control. There’s always a concern about things going bad since most of your stock has a short shelf life. It’s important to strike a balance between buying enough product to meet demand, and not going overboard. You need to manage your inventory if you are constantly running out of products or have to discard out-of-date produce.

Maintaining inventory can be compared to maintaining your business’s finances. You must carefully predict what the demand will be in the coming day, week or month, and compare it to the actual results. You can usually look back at previous sales to get an idea of what you should expect. You should not blindly trust these numbers.

Pay attention to the current market conditions when forecasting sales. It’s not always the case that a big day in sales last year will translate into a record day this year. There may have been a local football or concert that increased foot traffic, but that won’t happen at the same time in this year.

Consider the weather, events in your area, other restaurants’ promotions, and the market as a whole to understand what might drive or discourage sales. You may discover that not all factors directly impact your business. The more you compare your forecasts with actual results, and the more accurately you can purchase inventory, the better.

5. Create a reward or loyalty system

We spoke about the idea of increasing the lifetime value of customers. The first point was more about the importance of doing this in a single trip, but you should also look for ways to encourage customers to return. A loyalty program or rewards system is a good alternative to high-quality food and excellent service.

A reward program does not have to be complex. A punch card can be used to earn a free product after certain sales. You can also offer membership cards, which you can track via your POS system. If you choose a technical solution, any promotional offers or free products can be sent directly to the customer’s email inbox along with other communication.

Remember to carefully choose the products that you offer for free and at a discount. It’s important to make the meal valuable for your customers, but it isn’t a good idea to give it away. Choose appetizers, deserts, drinks and other items that have a minimal effect on your bottom-line.

6. Host events

In the current economic climate, it’s not possible to host events. However, you should still consider doing so. In normal circumstances, events can be a great way to attract new customers and retain existing ones. You can offer a simple discount on drinks for customers to watch the big match or partner with local brands to create a unique experience. Consider your target audience and clientele when deciding what type of event you will host.

Even though COVID-19 has severely limited dining options, you can still host digital events. You could livestream a class on cooking or a menu reveal or bring in exclusive products to your customers.

Instead of attending the annual Cider summit in Portland, OR as 2 Towns Ciderhouse does, they partnered with other apple cider producers to send tasting kits directly to their customers. Then, they hosted a virtual event for participants to enjoy and discuss the limited-release ciders.

People are looking for a sense normalcy and interaction from their favorite restaurants and shops. It is possible to increase your sales by finding unique ways to host and create events.

7. Establish branded revenue streams

There’s no denying that customers are drawn to branded products. There are plenty of options, from stickers to sweatshirts to glassware. Now is a good time to offer your own brand of swag.

Remember that you will need to make an initial investment. You’re in many ways starting a brand new business, so you should be careful with the implementation. To determine whether launching new products is a good idea for your company, you should research vendors, talk to customers and estimate the costs.

It’s possible to begin with a small batch of products in order to test customer interest. A smaller number of products will ensure that you do not overspend, and may even encourage your customers to purchase. Then, you can review the results of your initial launch and decide whether or not it makes sense to produce more limited merchandise/apparel.

8. Encourage employee growth

Your employees can have a significant impact on your sales. If you don’t respect them, they can derail your initiatives. You should make sure that they are involved in the decision-making and provide them with growth and training opportunities as well as incentives.

Focus on improving your upselling skills for new menu items and services. You can use scripts, descriptions, and menu ideas to determine what is most effective and efficient when you are talking with your customers. This is also a good opportunity to learn directly from your staff what sells and doesn’t, which will help you refine your menu.

Maximizing your table turnover is another way to get employees involved. It is not just about speeding up the kitchen or embracing new technology, but also your staff. Working with your staff, optimize your restaurant’s layout. Make sure that your staff is ready to serve your customers quickly. Anticipate their needs and make it enjoyable for them.

This can be a lengthy process, but caring for your employees’ personal growth and involving them in the sales process is a proven way to increase sales. It not only makes them more interested in your business, but also gives them a stake.

9. Price increases

It’s not a good idea to raise prices, but how you do it is important. It won’t shock your customers if you adjust prices gradually over time in order to cover rising costs. You’ll lose customers if you implement massive price increases without adding additional services or upgrading your products to accommodate the increase.

Plan any price increase in advance. Examine your inventory costs to determine which products require a higher price in order to be viable. When you adjust your prices, if you can, keep the price of less expensive products the same to make it easier for customers to accept the change.

It may be better to eliminate products or menu items that don’t bring in any revenue if price increases aren’t feasible, especially in an economic downturn. It may be disappointing to some customers to remove them, but it is better to do so than to have to close your doors.

10. Local marketing is the focus

What is your advertising budget? Are you aware of the effectiveness of your marketing? Are you focusing on the right people? If you don’t know the answer to any of these questions, then it might be time to rethink your marketing strategy.

Local marketing is a great way to promote your restaurant. Location is important whether you are paying for radio and tv spots, digital ads or billboards. You shouldn’t pay for ads to reach people who live in another state or country because it is unlikely that they will visit your restaurant.

Focus on local advertising in both traditional and digital media. Target a geographic area within a set distance from your restaurant. Advertise or partner with local organizations, schools, newspapers, and other groups in your community. You can slowly increase your reach as you grow but for the best return on your advertising dollars, focus first on those in your immediate area.

Are you ready to make a profit on your business?

This list is not exhaustive, but by offering these services you will be well on your way to starting a restaurant.

You can start a food truck if you aren’t sure about opening a restaurant. It is more affordable and you will learn what you want to serve on your menu.

Happy planning in the interim!