We’ve all heard the statistic that up to 95% of restaurants fail in the first year; the truth is somewhat more reassuring, however, with a 2005 study showing that “only” 60% of restaurants fail within the first year and 80% don’t survive the first five years. Since common causes of failure are rising wage and purchase expenses, having a stable and increasing revenue stream is one of the more important ways to keep a restaurant open.
With restaurant competition currently at a high, you need to have a strategy in place to increase restaurant revenue without resorting to continually raising the prices on your menu, or decreasing the quality of your food. So what are some other ways that you can increase revenue? We’ll take a look at some of the best ways that you can increase revenue—and defy that 80% failure rate.
Improve Your Web Presence
People use their mobile phone as a way to find the next place to eat. By building up a solid online presence, you can generate interest in your restaurant and also help your reputation spread by word of mouth.
There are two ways in which online customers can interact with your restaurant business: social media, and the web. It’s 2019, and there is no good reason for anybody not to have a social media business account or website. Social media allows you to interact with your customers in a relaxed environment and is essential for creating long-lasting customer relationships. A website is how your customers will get information about your restaurant, so be sure to include your address, phone number, and menu, at the very least.
If you’re still in the process of creating your website, you can create a Google My Business entry which will show up when people search for restaurants in your area. You can upload information such as your phone number, address, hours of operation, and even photos of your food to generate interest. This isn’t a replacement for a well-designed website, however, so make sure to get one up as soon as possible. Consider using tools that help increase your restaurant’s online presence like a Restaurant Marketing Grader that pulls restaurant information from Google, Yelp, and Facebook to give you a marketing score along with actionable tips on how you can improve visibility.
If you already have a website, make sure that it’s well-designed and easy to navigate. You can use basic analytics tools to see how long people spend on various pages on your website. If they’re constantly bouncing off pages within a few seconds, chances are your website is poorly designed. It’s always a good idea to update your design every couple of years and make sure that everything is fresh and easy to use. Also, since most people use their smartphones to access the internet, make sure your website is mobile-friendly.
Social media is tricky because it involves spending a lot of time interacting with potential and existing customers. Once you get on social media, you need to be able to check and respond to messages regularly, which can interfere with some of your other tasks. You can either delegate this task to someone good at chatting and interacting with customers, or you can set aside some time during the day to do it yourself. It may sound like a pain and a lot of work, but the results are worth it, as you’ll notice an uptick in new customers and more returning customers as well. It also gives you a chance to address issues before they can sink your business.
Make Use of Restaurant Downtime
A creative option to increase your revenue actually has little to do with your business. Instead, you can use your restaurant space for another purpose during the hours that you’re closed. Coworking is a new trend that allows freelancers, entrepreneurs, and start-ups to rent office space on a daily or monthly basis.
A company like DropDesk pairs up with landlords or tenants who are willing to sub-let their space when they’re not using it. Unless you’re a 24-hour business, there will always be times when you’re closed. And since so many restaurants are only open for dinner service, it can present an ideal opportunity for you to generate revenue off your space at a time when it would otherwise stand empty.
How DropDesk works is that people looking for a coworking space check the app to see what’s available in their area. They can filter options based on amenities such as free parking, access to coffee and snacks, WiFi speed, and desk space. Once they’ve found a location they like, they simply use the app to book a table for a certain period of time and then come in and use that space.
What this means is that you can offer your restaurant tables as coworking spaces that can be used whenever someone wants to work. Of course, there are some things that you need to have in place before you can turn your restaurant into a coworking space, such as:
- Extra staff to serve and greet DropDesk members
- Great daytime ambiance
- Power outlets for multiple laptops and smartphones
- High-speed internet, preferably WiFi
If you already have most of these set up, then you’re well on your way to increasing your revenue by letting out your restaurant as a coworking space. You can check out other tips for using your restaurant as a coworking space in this post.
Attract New Customers
You’re always going to have to work on getting new customers through the doors. While it’s great to see regulars, attracting new customers will increase the number of dishes you serve and thus increase your revenue.
Marketers have spent a lot of time designing a vast number of tactics to get new customers through the door, and it may be a smart idea to look into some of them. For instance, you can use targeted emails to inform potential customers of any promotions you may be having, or you can work on your brand to make your restaurant more recognizable to new and existing customers alike.
It’s essential to have a strong and coherent online presence to attract new customers. By having a jokey blog and a serious social media page, you can send conflicting messages, which will instantly lower consumer trust. Instead, have one person do all your content to make sure it’s all in the same style and tone.
In addition to long-term marketing strategies, there are also some quick and easy steps you can take to generate additional interest in your restaurant. First-customer promotions where you give away a free beverage, appetizer, or dessert are a great way to get people through the door, after which you can wow them with your great service and food. Just make sure not to run this type of promotion too often, as it can start to seem desperate and is the sign of a failing business.
If your city offers a restaurant week, it always pays off to take part. While you may lose some money on offering discounts and deals, you will get a huge boost of new customers coming in through the door. Restaurant week is a great way to get exposure and to cement your reputation in your city.
Retain Existing Customers
So once you’ve got the customer in the door, you definitely want them to come back—and often. Regular customers don’t only generate money through the food they eat. They also generate revenue by offering free advertising through word of mouth. As more and more people become skeptical of marketing techniques, word of mouth is a valuable tool that still feels legitimate and real.
So how exactly do you retain customers and turn them into regulars? The first step, of course, is to have great service and food. Nobody is going to go back to a restaurant where they felt neglected or where the food was bad or overpriced. By offering exceptional service to every customer and taking pride in your products, you’re already halfway to gaining a good stable of regulars.
Sometimes it may also take a little bit of extra effort to ensure customers keep coming back. Many restaurants use a loyalty program, where diners can accumulate points in order to get a free something. What you offer as the free incentive is up to you, though obviously the more expensive it is, the more likely people are to work toward it, though it does mean you’ll be losing occasional money.
People love feeling like they’re part of a community. One way of doing that is to host events or take part in local community events. By constantly being visible in the community, you generate a reputation as an important part of the community and people are more likely to think of your restaurant when they’re looking for a place to go. You can participate in events by offering money to local charities or catering any community-organized events. You can even provide free cooking classes or wine-tastings to foster a group of regulars that will also come to your restaurant to dine out.
Maximize Your Table Turnover Rate
Simply put, the shorter people take to eat, the more customers you can serve, and the more food you sell. While you can’t set a timer on your tables and expect people to finish within a certain time frame, there are some tricks you can use to maximize the number of people you serve per shift. Not only do these practices increase your revenue, but they can also make your restaurant more efficient, improving your reputation for great customer service.
- Streamline your menu. While it’s tempting to offer every dish under the sun so that everyone will have something they want to eat, it slows down your turnover in so many ways. Extensive menus mean that people take longer to decide what to eat, which complicates things in the kitchen. Large, overwhelming menus mean mistakes can happen, lowering your reputation and making it likely that the customer won’t come back. Simple menus, on the other hand, speed up how long it takes customers to decide on their food choices, and also service times.
- Train your staff properly. A well-trained staff is one of the most important aspects of your restaurant. Good employees will be able to organize their tables effectively, make fewer mistakes, and ensure that drink orders and checks are delivered promptly and efficiently. This means more tips for your staff, as customers feel they’ve been well attended to, and you get a shorter table turnaround time as well.
- Make use of technology. While getting the check may feel like the end of the meal for the patron, you know that there’s still a process to get through before the customers leave. By using smarter, more effective POS systems, you can expedite this process. Some new systems allow order tracking to help with splitting the check and can even calculate tips for customers. There are also plenty of new credit card machines that work much faster than old ones and make paying the bill a breeze.
Running a restaurant is a daunting prospect for even the savviest business person. As costs increase, you need to ensure that you’re generating enough revenue to stay afloat and make a profit. There are many marketing tools you can use to generate new customers or to ensure that customers remain loyal, but some of these can be really time-consuming and difficult to fit in with the day-to-day running of a restaurant.
An exciting option that isn’t covered by many marketing textbooks is using a coworking platform to utilize your restaurant space when it’s not being used for service. Not only does this generate revenue every time someone uses your working space, but it can also help generate word of mouth interest as workers get interested in your location and want to try out your food.
DropDesk is a great way to manage a coworking space. It handles the management of customers, billing, and many other aspects as well. All you need to do is make sure your space is coworking-ready, and be prepared to open your doors to a whole host of new opportunities.