Part Three: Profit
In the third part of Silver Chef’s 2016 trend report, the focus is on the most important element of any business, PROFIT!
Hospitality businesses can often operate on thin profit margins. They are faced with a number of challenges. Fast moving trends and innovation all impact on profit, so for hospitality and businesses, being organised is the key. Giving yourself the time to take on profit increasing activities, researching the latest in innovative strategies and analysing what is not working.
One of the first things that those in the hospitality business can focus on is to creatively sell the offerings of the business. How can you get your front of house staff to sell more beverages? Can you design some creative specials or fixed price options that will get people in the door? Making your staff good at the process of up selling is a challenge however the training and education will be worth it as the good staff will underpin your business both in service and reputation.
Many hospitality business owners believe that cutting costs will make them more profit. However the key to more profit is to sell more. It is estimated that a 2% increase in sales is equivalent to 10% reduction in food costs. Thus refreshing the sales skills of the front of house staff will have its rewards for the business owner.
Marketing has always been a way of bringing in new customers and in our digital world, advertising your business is now much cheaper than the traditional ways. Not only is it cheaper, but it is more effective as you can isolate things such as age or postcodes. This allows for a more strategic approach to marketing your business.
One of the most unpopular choices for those in the hospitality industry relates to the passing on of purchase cost increases. In the survey, 27% of restaurants and 20% of cafes admitted to not passing on growing business costs onto their consumers. To achieve your desired profit margins, businesses should never sell themselves short in terms of premium ingredients being sold at average price points.
Lastly, having the right equipment is essential to the success of the business in terms of service and product. Being able to deliver your product efficiently is paramount. In addition having reliable and modern equipment provides an environment of continuity of production as well as quality of the end product.
The Garis Group are hospitality specialists for more information, please follow this link: https://garis.com.au/hospitality.html