When food costs increase many restaurateurs feel the squeeze.  Regardless, there are ways to still maximize profitability in your restaurant. Restaurants that have a more flexible business model can adapt and implement some unique strategies to fight the rising food costs and continue to maximize their profits.

Promote Limited Time Offers

By creating specials around low cost food items that have high margins you can optimize your profit margins.  Put together appealing healthy meal choices that favor your bottom line.  Not only will your customers love your specials but it will feed your bottom line.

Menu Innovations Can Increase Profitability

As commodity prices are on the rise, be innovative and expand your menu to include choices that cost you less.  For example, soups that are broth based are low cost and appealing to healthy conscious diners.

Keep Tight Controls

Restaurateurs must have good control of their prime costs; food, beverage, and labor.  One of the best indicators of profitability is tracking the prime costs.  55% of total sales or less is a indicator that can ensure profitability.  As costs go up restaurateurs must offset the increase and cut some of the cost of labor.  This does not mean laying off the majority of your staff, but rather examine sales for lunch and dinner – based on your findings reduce staff where it does not impair food quality and customer service.  Observe your star manager and employees and make decisions accordingly.  An efficient and well managed staff works much better than being poorly managed and overstaffed.

Increase Prices

Restaurants should try to increase prices 5% every year at a minimum to keep up with the rising food costs and other miscellaneous charges.  But don’t increase at the expense of the customer. Be sensitive to their expectations while upholding margins to ensure satisfaction.

Maintain Value

Your high quality food and good customer service is what keeps the diners coming back — it’s not price alone.  Top restaurants focus on how the value is perceived by their customer and position themselves accordingly.

To learn more about maximizing your profitability, email:  arthur@theroartgroup to schedule your complimentary consultation.