Improve Your Food Service Bottom Line with These 7 Financing Solutions
What is your bottom line? The dictionary says the bottom line is the final result or outcome. This is ultimately the sustainability of your restaurant.
This also refers to the last line on your restaurant’s balance sheet – where you show profit and loss and your net operating income.
For your food service business, the bottom line represents success, and it represents the continuation of your business. (tweet this)
In this article we look at how to improve your food service bottom line with these seven financing solutions.
#1: Change Your Pricing
The first and easiest food service financing solution is to adjust your menu pricing.
Before you do this, take a look at a few things:
- Research the competition. Look for similar restaurants.
- Consider your target demographic.
- Re-evaluate your food costs to ensure you’re charging enough for each menu item.
- Consider the financial climate. Does a price change make sense?
- Will a price increase upset your customers and drive them away?
- Does your menu warrant a price increase? If you aren’t sure, what could you do differently to help customers feel comfortable with an increase?
#2: Control Your Food Costs
Food costs make up a large part of your restaurant’s overall expenses. When it comes to food costs, you can shop around to find the best deal, but most often the price differences aren’t much.
The biggest problem with food costs is waste. So, you want to do inventory on at least a weekly basis if not daily. This will help you manage your inventory, have the right stock on hand, and ensure no one is stealing your food.
You can also control your food costs by refreshing your menu. Get rid of items that aren’t popular. You may end up throwing away food that goes into these dishes.
By controlling food waste with accurate inventory management, you’ll improve your food service bottom line. Make sure you don’t have too much inventory while also making sure you have enough. When you are on top of your inventory, this isn’t too difficult to manage.
Consider adding some inventory management software to help you take the guesswork out of how much food to buy and when. This software can also help you maintain a consistent food inventory.
#3: Get a Handle on Labor Costs
Next to food costs, labor costs can really eat into your food service bottom line.
Your staff is vital to the success of your restaurant, and you should treat them well and train them in the finer aspects of customer service. Well-trained staff is more likely to stick around longer. (tweet this) Restaurants generally have a higher turnover rate, but if you train your staff and provide incentives for them to stay, you’ll reduce the labor costs involved with hiring and training.
In addition, you want to find the balance between the right number of staff per shift and too many people working. When you overstaff your restaurant, you are taking a cut out of your bottom line.
Schedule only as many people as you need to so that you can provide excellent customer service.
Finally, if at all possible, avoid overtime costs to improve your bottom line.
#4: Update Your Operating Systems
Efficiency improves your bottom line. If your point of sale system is outdated, you don’t have inventory software, or good management of your hourly workers with a staff scheduling system and payroll system, you are going to take some hits.
So, update your operating systems. A modern operating system can maximize your efficiency and your overall accuracy.
For example, allow your staff to clock in on an app on their phones. This helps you digitally track them so there is no waste. You can also take online orders and manage reservations digitally.
Do what you can to streamline your operations with updates systems, and you’ll again improve your bottom line.
#5: Try Not to Run a High Credit Bill
Another financing solution is to avoid running a high credit bill.
When restaurateurs run high credit bills and buy ingredients with credit, they can get into real trouble. For example, if you buy a lot of food at once on credit, and it spoils, you end up paying more for the food.
Try not to run a high credit bill and make most of your payments in cash if at all possible.
#6: Pay on Time
Yes, you will have to use credit for some purchases, especially early on.
When you do buy on credit, though, make sure you make every payment deadline. When you miss payments or even when you pay too little, you end up paying interest which eats into your bottom line.
Take care of your payments and make sure before you buy on credit that you can afford to make the payments.
#7: Keep a Little for a Rainy Day
Things happen. You will have expenses that you don’t see coming.
It’s a good financing solution to keep some cash aside for expenses that pop up. This might be an extra high electric bill during a cold winter. It could be an oven that breaks.
At the beginning of each month, put aside a certain amount of cash that you can use in an emergency.
Your food service bottom line is your restaurant’s earnings. The bottom line is your net operating income. Has yours increased or decreased your net earnings?
If you’re ready to improve your food service bottom line, you can do so with these seven financing solutions.
When you understand your bottom line, you can create strategies to increase your bottom line. Don’t forget there are many ways to increase your bottom line including financing solutions, reducing expenses, and additional restaurant marketing.
At Restaurant Engine, not only do we create great, responsive websites, but you can count on us to create a website that works for your food service business. Let us help you by creating the perfect site that draws customers in and helps you improve your food service bottom line! Ready to take the plunge and create a new website? Get your free website consultation today!