Five tips for a more profitable restaurant

Restaurants deserve higher profitability

The restaurant industry is largely based on dreams. A dream of having your own place. A dream of getting the opportunity to cook your signature dishes. A dream of being able to offer people a place to meet and an experience of both a gastronomic and social nature.

Unfortunately, the same industry is also the most prone to bankruptcy, and many entrepreneurs get very “little pay for enormous effort,” with working hours that others would have found difficult to endure.

It is clear that a change is necessary, an opportunity to keep the dream alive and get more for your efforts in an industry where bankruptcies are frequent and the profitability of a restaurant is structurally low.

Do you work in a restaurant, bar, or café?

Read our five tips for increased profitability!

1. Flexible menu provides 10-15 % in increased profitability

The menu is one of the restaurant's best sellers, and that's why it's important that it's been put together according to the business's expected sales and, of course, according to customer preferences.

A technique commonly used in the restaurant industry is ”menu engineering,” which involves:

1. Analyze the business's gastronomic offerings
2. Define which dishes are most profitable
3. Then place them strategically on the menu so they sell as well as possible

Please divide your products into four categories from a turnover and profitability perspective, where products with high turnover and high profitability should be highlighted in the menu, and where the opposite might only be available for verbal orders.

Menu engineering matrix

THE STARS Products that provide high gross profit and sell well.

KASSAKORNA: Products that have low gross profit but sell well.

QUESTION MARKS: Products that have a high gross profit but sell poorly.

BYRACKORNA Products with low gross profit and poor sales.

Also consider that willingness to pay varies at different times, and some of the most profitable restaurants work extensively with offers at certain times to fill the restaurant for a larger part of the day.

With WEIQ, you can therefore update the menu in real time without calling the print shop, experiment with which products you want to highlight most on the digital menu and automatically set times for ”happy hour” or limited-time offers. This is a sure way to attract more customers and increase profitability.

2. Returning customers

The most important factor for a restaurant's profitability is repeat customers.

Returning customers are easier to handle, buy more, and also recommend the food to their acquaintances through the so-called “Word of mouth” effect.

A common KPI for measuring customer loyalty is NPS, Net Promoter Score, which is based on a scale of 1-10. Surveys have shown that you get the most out of converting 7s and 8s into 9s or 10s, as well as dealing with your “junk pile” of 1s to 3s.

It has been shown that if you can turn a satisfied customer into a very satisfied customer, the number of recommendations that customer gives to acquaintances increases significantly.

Converting dissatisfied customers is also very effective, as they go from giving negative recommendations to being more satisfied than customers who have only had an entirely ordinary experience if you manage to solve their problems.

As a restaurant, however, it can be difficult to do much to create repeat customers beyond doing what you always do, delivering good food and drinks, and providing a pleasant experience.

With a Smart ordering system However, it increases opportunities. With an ordering system, you can measure what customers think (NPS) and address dissatisfied and moderately satisfied customers, as well as ensure that very satisfied customers can invite friends.

With WEIQ, your guests who have ordered via the app can leave feedback directly after their visit, allowing you to quickly praise staff or make adjustments for the next evening.

With an ordering system, you can also fairly give discounts or “points” to customers who shop with you frequently. A sure way to get customers to keep shopping more at your restaurant or cafe.

With the WEIQ app, you can also send targeted emails to all guests who have made purchases from you, something that is otherwise very difficult to administer. Of course, in accordance with GDPR.

3. Upselling A-O for a Profitable Restaurant

Extra orders are a drain on resources. Don't forget to charge for extra orders customers make. More to drink, extra bread, extra sauce, and perhaps above all, more drinks. It's no secret that Sweden's most profitable restaurants sell a lot of drinks and have repetitive upselling and high average checks.

These are products that often have high margins and provide higher customer satisfaction. Many small streams fill a large river, increasing the average bill.

A common obstacle for upselling is that customers don't have the waiter's attention at the very moment they feel like buying more. If contact isn't made immediately, the window for upselling can pass, and the waiter only hears “tastes good” when they check in 10 minutes later.

With WEIQ, we help our customers with just that. It has never been easier for the customer to order more or to have ”add-on” products when ordering.

Studies show that the average bill increases by a full 20% when the customer has the option to order via a Digital payment solution at the restaurant, and that 1 in 15 extra orders, such as an extra drink or an extra dessert, are forgotten to be registered by staff in the POS system, restaurants that use WEIQ avoid these missed revenues.

4. Profitability and increased turnover is spelled: Take away

Expand sales and customer base. Not everyone wants to sit in a restaurant to eat restaurant food. Make sure there is a take-away menu and an option for these customers to also order from the restaurant menu.

Remember to avoid the big home delivery dragons that charge exorbitant transaction fees and force you to re-make food that has become too cold. This impacts your profitability and causes you to lose control over your customers, who they want to own for themselves.

WEIQs customers often leave the big home delivery giants and get a lower transaction fee, significantly better software, and a chance to ”own” their own customers. Poké Maniac in Trelleborg, for example, who managed to get in one year 30% of its customers to order takeout through WEIQ.

You can also manage parallel menus for take-away and eat-in, which makes it very easy and clear for the customer.

Take-away has never been easier than with WEIQ.

5. The main cost driver is impacting your restaurant's profitability

Be mindful of personnel costs. Personnel costs are one of the largest expenses for many restaurants, often ranging between 30-50 % of total costs. Therefore, a small improvement in staff efficiency can make a big difference.

Ensure your restaurant is staffed correctly and as needed, but also have smart solutions that minimize staff intervention. Ensure staff are there for the guests, but that guests also have the opportunity to help themselves and get all the information they need.

WEIQ gives guests the option to let the app order and queue for them, but primarily streamlines operations for staff by sending orders directly to the kitchen and bar, either via a tablet or a ticket printer.

WEIQ is a digital waitress/waiter that costs a fraction of what staff costs and works around the clock, year-round, and is available to all customers at the moment they want to order!

FINALLY

These tips together with WEIQ As an enabler, it can absolutely provide opportunities for increased profitability in your restaurant, but we know that for a restaurant to have sustainable high profitability, it comes down to your hard work, your ability to deliver a great experience, and your drive as entrepreneurs.

We want to be a part of realizing and keeping your dreams alive, and are only interested in long-term partners rather than customers.

Please feel free to contact us if you would like us to help you create a more profitable restaurant!