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Make Your Restaurant More Profit Before Selling

Nov 5, 2020
Article #404
Author: Mel Jones

Episode 1

The pandemic placed challenges on the restaurant industry like we’ve never seen and let’s hope we never see again.  

But with every storm, we learn to survive and thrive, making us stronger and smarter. I talk to hundreds of restaurant owners each month and their creativity is nothing less than inspiring.

I’ll be writing a few series on what other restaurant owners are doing to thrive during this pandemic.

Let’s start with delivery services such as DoorDash, UberEats, etc.  Here is what others are doing:

1.PICKING SEVERAL DELIVERY SERVICES:  Don’t rely on one or even two services. Each service has different market penetration with in each area and not only that, each service has a different reputation within each market. Foodies download food delivery apps on their phone and tend to stick to the one giving the best selection, service and lowest fees.  So, if a restaurant owner uses only one service, they are missing out on potentially thousands of customers in their area.

2.RAISING PRICES ON THEIR DELIVERY MENU.  When delivery services started, they prohibited raising price on the delivery menus, but that’s changed. I have clients boosting prices 10-15% per item to cover the costs of these services and literally reducing the fee to the single digit percentages. People are willing to pay more for food delivery, heck my kids do it all the time and on their dime!

3.REDUCING THE SIZE OF THEIR MENU. Rethinking your menu and keeping it to the more high-volume items will save your kitchen time and money in prep work, inventory carrying costs, and spoilage. It allows your kitchen the focus to increase the food quality as well.  

For example, I have one burger franchise in Los Angeles area, where they went exclusively to delivery and take-out and their profit is up over 50% from the same period last year despite sales being down 30%.  This restaurant was doing $225,000 a month and is now doing about $150,000 a month with profits in the $20,000 - $25,000 range per month and labor costs less than 15%.

Rethinking how you do your business is mandatory if you want to make it through and thrive!

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