Improving the profits of a hospitality business, whether a restaurant, bar, or hotel, requires assessing the current situation and making changes to key areas. This may take an initial time investment, but it doesn’t have to cost a lot of money. Let’s consider the steps to create a more profitable hospitality business venture.
1. Make a Financial Assessment of Your Eatery.
According to Hotel Management, first, conduct a financial assessment of your bar or eatery. This process helps you uncover potential areas for profit improvement. That does not necessarily mean finding more affordable vendors, although you may find that you need to do so. A need for higher-volume sales or improvements in staff performance can also help create a better bottom line. From the results of this assessment, implement one or more of the following suggestions, guided by your financial assessment.
2. Revisit Your Menu and Revamp It.
What do diners order most frequently? Which items do people rarely order? Does your eatery or bar serve drinks that go unordered or stock many brands of each alcohol? Answering these questions honestly through your cash register sales data leads you through your menu revamp. Hone your menu to serve diner favorites and top-selling alcohol. Once you’ve redeveloped your menu, you’re ready to locate new vendors.
3. Improve Ingredient Sourcing.
Once you’ve re-developed your menus, revisit your vendors. Do the same vendors still offer the ideal sourcing for ingredients? Research new sources for ingredients, especially local and regional growers. In most cases, using farm-to-table ingredients increases the quality of your food.
4. Improve Your Purchasing Methods.
Once you’ve identified problem areas and refined your menu and vendors, consider improving how you track, order, and manage everything. Use a hospitality management software (HMS) program, like Craftable, to refine your financial systems. An HMS lets you manage:
- Online procurement and inventory
- Accounts and payments
- Business intelligence.
From one program, you enter and track every piece of business information related to your hotel, bar, or restaurant.
5. Pay attention to your people.
According to Dummies, the popular how-to book publisher, your hospitality staff comprises one of the most important aspects of success for a hospitality business. A Toast study of restaurants found that in eateries with strategically aligned teams who shared goals, staff productivity increased by 32 percent. Here’s how to achieve strategic alignment without expense.
Focus on appropriate communications. Hold regular staff meetings that encourage an exchange of ideas. Encourage true teamwork and require respectful behavior between staff.
Cross-train employees at each other’s stations, so bus staff can step in for wait staff that go home sick or wait staff can learn bartending basics. This cross-training helps employees grow their skill sets, but so does continuing education. Even a local café with a small staff and budget can maintain a bulletin board in the break room with free or low-cost seminars or online learning opportunities.
Get to know each employee. Know their strengths, weaknesses, goals, and hobbies, such as their school situation or the band they play in.
Showing you care about them can help motivate your staff and so can proper feedback. Provide public praise, but private constructive criticism. This communication builds respect and helps them do a better job. Try to keep a calm demeanor when talking about bar or restaurant issues.
Encourage staff to communicate with you about their life, goals, and your eatery or bar. They work on the front lines and can offer ideas that could improve service and reduce expenses.
6. Recognize excellence.
Develop an incentive program that rewards a job well done. Make it about more than sales, because not everyone has that skill. Reward superb work in efficiency, attendance, cost reductions, workplace upkeep, and customer service. Employees contribute in many ways to the financial success of your hospitality business, so reward each one.
Getting Started
Just six steps can help you build a better bottom line for your eatery or bar. Start with step one, then implement the steps two through six that your assessment shows you need to use. Making your business more profitable takes time and effort, but by working with your staff, you can delegate and achieve your goals more quickly.
