Top 10 tips for boosting restaurant margins!

Inflation, soaring electricity prices and other factors : 94% of restaurateurs see a direct impact on their business. Even if the situation seems to be easing, the trend remains upward for 2023 and 2024, with some sectors particularly under pressure. So, is it really possible to protect your restaurant's margins in the context of 2023? 

Do you know how much your restaurant's margins are at the end of each day? How do you estimate your profitability? What buttons will you push to improve your profitability?

To implement the right measures and protect your restaurant's margins, you need to start by asking yourself these questions. 

And then, what strategy should you adopt? Louiza, CEO of Malou, and Laurine, restaurant management consultant and founder of Restaurant Methods, shared their tips for optimizing your restaurant's margins despite the current situation. In this article, you'll find the main points of this unique session, which has already served many restaurateurs well, as well as the full webinar replay for all the details. 

Watch the replay!

Laurine and Louiza explain first how to optimize costs, then how to generate more income with more customers. We tell you all about it here!

Protect your restaurant's margins with the Do as much, with less strategy

Waiting for the current situation to pass is not the right strategy. You need to be proactive, and do everything in your power to meet today's challenges. 

Learning to do as much with less

How can we achieve the same sales and margins with fewer resources? 

So many sales thanks to : 

• A strong brand image and superb communication

• A coherent, optimized customer journey

• A strategic sales pitch

So much margin thanks to : 

• Prominent KPIs

• A foolproof management routine

• A team to support your strategy

With less : 

• Control over customer flow

• Employees

• From choice to à la carte

• Hours of operation

• Available energy 

1. Protect your restaurant's margins

Start by choosing the right KPIs: your performance indicators. Measuring your performance enables you to make the right decisions, to know your strengths and weaknesses, and to improve on a daily basis. There are quantitative (financial) and experience-based (qualitative) indicators. 

• Quantitative KPIs to track : 

Controlling the cost/raw materials ratio, rather than just talking in terms of sales 

Payroll must be planned and monitored

Inventory: don't just manage to avoid running out of stock, keep a close eye on stock levels to manage incoming and outgoing stock as effectively as possible.

The number of tables renewed reflects the smooth running of a service

Reducing food waste is a way of measuring the efficiency of your kitchen team, for example.

• Qualitative KPIs to track : 

The higher average customer bill, making them spend more, has a positive impact on your restaurant's profitability.

Customer loyalty. If they come back to the restaurant, it's a positive signal.

The number of 5-star customer reviews testifies to your customers' satisfaction, and helps you convert new ones. 

Your team's responsibility and autonomy are just as important as the friendliness of your employees.

• Other KPIs we don't talk about enough: 

The atmosphere in your microsystem. Making the right decisions when there's a bad atmosphere in your immediate environment (team, suppliers, accountants, etc.), or if you're faced with conflicts, becomes more difficult.

Physical and mental health. Don't forget to take time for yourself, leave - lunch break..., otherwise you increase your chances of making last-minute decisions, in a state of fatigue. 

Flexibility of action. This is your ability to react spontaneously to a situation, to say something to your teams. This flexibility is nurtured through communication, management and feedback.

Find out more!

2. Demonstrate autonomy in cost management

It's all about setting up a real management routine. To reduce the unexpected. But creating a routine also takes the mental load off, as these actions become almost automatic, requiring less thought. Running a restaurant requires a great deal of thought and mental effort, so including certain tasks in your routine will help you to take the pressure off your day-to-day decisions, and see things more clearly.

To set up an effective routine, use the right tools. Whether digital or manual, the most important thing is that the tool you use should make your daily life easier, and not be difficult to use.

Once your routine is in place, and you have the right tools at hand, make your team aware of the profitability and performance targets to be achieved. Your team is key to the restaurant's success, but performance indicators differ from one job to another. A waiter does not have the same objectives as a cook. So you need to activate a routine and tools for each team, specific to their needs. 

Find out more!

3. Use your menu to improve your restaurant's margins

Optimize your food costs with Menu Engineering. Menu Engineering: the ability to influence your customer's order. It only takes a few seconds to read the menu for your customer to decide how much to spend, whether or not to order dessert... You need to be able to influence your customer's choices, right from the creation of the recipe, to the name of the dish, its communication, its layout...

→ Dust off your technical data sheets, to stay on top of your raw materials costs. With today's fluctuating prices, make different assumptions per recipe, then certain decisions may follow: change supplier, change products...

→ Create supplier negotiation levers. Chances are your suppliers won't agree to lower their prices because they too are facing a difficult situation. Nevertheless, you can use other negotiating levers, such as day of delivery. 

→ Use data to classify dishes by popularity and margin. Data you'll find on your cash register system. Place your dishes according to a popularity/profitability grid. Deduce the dish that sells best and has the highest margin: your best seller, promote it as much as possible. On the other hand, for a product that's popular but not very profitable, find ways to reduce costs, etc.

→ Lighten your menu to make it easier to influence the customer's decision. A shorter menu maximizes the chances of improving the restaurant's margins: less stock to manage, more consistency in quality, less training for the team...

→ Hire a graphic designer. The design of your menu must be intelligent. It's all about the customer's eye, so you need to position the items you want to sell in particular areas, in addition to choosing colors, visuals, writing, their sizes... 

→ Write your card attractively. The descriptions and headings of each product should make you want to know why it stands out. In the description of ingredients, for example, start with the most appealing. 

→ Adapt digital communication to push certain dishes. 

Also, don't forget some of the most often overlooked elements in your food costs: 

• Meals and team coffees
• Customer offers
• Operational losses (in the kitchen and in service errors)
• Accidental loss 
• Unsold goods recycled
• Recipe testing
• Purchasing mistakes
• The bread

Do we need to raise prices in all this?

If the profitability of your restaurant's dishes is drastically impacted, yes! But how? On which products? By how much? What are the consequences for customers?

• Use your Engineering Menu to find out which dishes are low-margin and which are not.

• Customers have understood the context, so all you have to do is warn them and be transparent about your decision and the new prices.

• Raise prices gradually, not all at once

Find out more!

4. Invest in your employer brand

The job market in the catering industry has been complicated of late. For every 100 jobs advertised online, only 2 to 3 candidates apply. So there's a lot of competition among employers. 

You need to become attractive, not only to customers, but also to candidates. To do this, don't hesitate to raise the salaries of your teams. Remember that 25% of an employee's salary represents the cost of replacing him or her.

So how do you become the coolest restaurant on the block, where everyone wants to work? Thanks to your employer brand: all the steps between the moment you decide to hire and the moment the employee is satisfied with you. And the real jackpot for better margins in your restaurant: when you've built employee loyalty, and offer them an internal promotion. 

To attract and retain candidates: salaries, working hours, new profiles.

5. Invest in good growth

Buying growth means investing in the hope of making a return on that investment. To protect your profitability, you shouldn't buy just anything in the hope of making growth. 

So, what to invest in in 2023?

• Organizational tools

• Diversifying sales channels

• Employer branding

• Improving the customer experience

• Digital communication tools

Find out more!

Protect your restaurant's margins with more customers and therefore more revenue 

Once you've stabilized and controlled your costs, how do you attract more customers? Today, 90% of French people choose their restaurant online.

There are two scenarios for acquiring customers online: 

→ Successfully reach web users who search by need: "I want to have lunch on a terrace near the train station in Anthony". To do this, you need to work on your local referencing

→ You have a very strong brand, Internet users search directly for your "McDonald's" establishment

6. Work on local referencing 

The aim: to move up the search results for Internet users looking for a restaurant by need. 

Local SEO means getting your restaurant's Google listing to rise, rather than investing in SEO for your website, which means facing up to the giants like TripAdvisor, TheFork and others.

So how can you work on your local SEO to climb to the top of search results?

→ Know your keywords

→ How I'm going to show Google that I'm the best search result for its keywords

This involves a number of steps: 

→ Make sure you post consistent information online wherever you exist

→ Show Google numerous recurring signals that you're a good search result. Through keyword-related content: weekly Google posts, responses to customer reviews, description of the establishment, etc.

All our tips for becoming N°1 in search results, here.

7. Enhance your e-reputation for more conversions

To respond to customer reviews by inserting keywords, you need to collect reviews. There's a discrepancy between the number of people you receive and the number of customers who leave a review.

To collect customer opinions, don't hesitate to solicit them. This can be done with a QR code, an email campaign, or a totem with contactless technology.

Customer reviews are not only important for your restaurant's local SEO, but also for converting Internet users. Once reviews have been collected, you need to respond to 100% of them, both positive and negative.

All our tips for collecting more positive customer reviews, and limiting the negative ones, in this article.

And discover HERE how Artificial Intelligence can help you!

8. Become attractive on social media

Investing in quality content, photos and videos, for your Instagram (and Facebook) page is essential today. You then need to master the codes of social media to make your page visible to users. To achieve this, you not only need to follow the following points on a daily basis:

• Follow a relevant hashtags strategy

• Specify the location of your posts to appear on the Instagram Map 

• Speak out regularly on your pages social media, share content regularly

• Responding to all interactions

All our tips for becoming a star on social media, in our article here.

9. Protect your restaurant's margins by increasing delivery margins

Turn delivery into a genuine additional source of income! Say goodbye to the platforms' 30% commission. How can you do it? With the Webshop link! The idea here is to offer delivery and takeaway orders from your own website. This means that delivery platforms no longer act as business introducers, which means lower commissions!

All our tips for boosting the profitability of your delivery sales, in this article!

10. Balancing margins and customer satisfaction

Don't forget that customer satisfaction remains one of your top priorities. Today, thanks to Semantic Analysis, you can analyze the content of your customer reviews. You can then deduce what's positive and what's negative, so you can improve your service, keep the most highly praised dishes on the menu, train your teams on certain shortcomings...