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Want to Increase Your Restaurant's Profit Margin? Try These Tips...



If you’re a restaurant owner, then you are probably looking for reliable ways to increase your profit margin. You need ideas that won’t shake up your day-to-day routine or confuse your staff or patrons. Many owners attempt to increase their profit margin by reducing overhead costs. But you need to be careful when choosing which areas to cut out of the budget. Choose the wrong thing and you might lose key employees or frustrate customers.


From automatic tip sharing to online ordering, here are some ways that you could increase your restaurant’s profit margin reliably.



Focus on Retention of Key Staff


Turnover can have a costly and detrimental impact on your bottom line. You spend time and money investing in a new employee. You train them to understand the in’s and out’s of your restaurant. They grow to become trusted members of your team, appreciated by patrons and coworkers alike. They take time to get up to speed but now they are an essential part of your business.


However, every time an employee quits, you lose out on the initial investment you made while training them. For every new hire, you’ll need to inject more time and money into recruitment, training, and onboarding. Staff salaries are one of the biggest components of overhead costs in the restaurant business. But it would be foolish to cut back on staff salaries to save money.


Instead, focus your effort on retaining key staff. Less frequent turnover means that you have to fork out less money to train new people. How can you improve retention and thus increase your profit margin? Ask for employee feedback. Offer them additional benefits wherever possible, even if you can’t increase their pay. Use tip distribution software to make sure your team knows how to fairly distribute tips.

Implement Native Online Ordering


Take action to save on commission fees by implementing native online ordering for your restaurant. You could be losing hundreds of dollars each month to delivery services. There are lots of simple app integrations that could help you start taking online deliveries yourself. This is a great way to get your business name out in front of more customers. Plus, native online ordering means that you can keep that percentage for yourself and increase your profit margin.


Remember to think about how tip sharing and tip pooling will work with online orders. It’s one thing when your employees can see cash coming in and see it split up into equal piles. With online orders, make sure you have a tip distribution system that knows how to calculate tips. If your team prefers a tip sharing software to handle tip allocation, check out Tiphaus. It is both a tip pooling software and a tip sharing system, flexible enough to support your team’s preferences for tip distribution from online ordering.



Reexamine Your Menu


Increase your profit margin by using your POS to determine which items sell the most and which sell the least. Redesign your menu to foreground the high-priced items that aren’t purchased often enough. Alternately, you could try slightly raising prices for your most popular items and see how customers respond.


Sometimes a simple rearrangement or color pop can make a big difference to your bottom line. Remember that you should apply this tip to your online menus, too, to see the maximum increase in your profit margin.



Start a Loyalty Program


Finally, it’s a good idea to start a loyalty program if you want to increase your profit margin. By encouraging customers to return to your restaurant to earn rewards, you can increase your bottom line. Make sure you research the right items for your loyalty perks. You shouldn’t be giving away high-price items.


If you’re looking to create a loyalty program that works with online purchases, use software that attaches the customer ID to their bank card. People tend to lose physical reward cards and then there’s no way to corroborate their purchases. This can make people feel sour towards your brand. Instead, find a system that can automatically associate the user with their rewards.


These four tips are a great start for any restaurant owner who wants to increase their profit margin. By implementing a loyalty program and native online ordering, owners can create a seamless and delightful experience for customers so they keep coming back. Incorporating a system for restaurant tip automatic calculations is another foolproof way to retain key personnel which helps protect your bottom line.


When you’re ready to explore the industry’s leading tip distribution software, book a demo with Tiphaus. Your bottom line will thank you, even in COVID times.

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