Running a café can be a profitable business especially when you know how to maximize your profits.
The current economic downturn means that a large percentage of the population has less disposable income, so more people are inclined to drink and eat at home instead of treating themselves.
The good news is that whatever your situation, there are things you can do to help boost revenue and increase your bottom line.
If you are running a café, here are 6 ways to maximize your annual profits.
Staffing
Staffing is one of the biggest ways to maximize your profits not only for those who are running a café, but also for all business owners. If sales have eased off and your staffing levels have remained the same, then it’s time to get realistic. Of course, you don’t want to see anyone out of a job, but employing more people than you need does not make good business sense.
Another option, if you don’t want to lose anyone entirely, is to reduce hours across the board – although this can become a bit of a logistical nightmare.
If, on other hand, you are looking to recruit, look to employ teenagers who can put in a few hours after school or work during weekends. Not only are they usually quite eager to learn, but the hourly rate is typically lower, which could save you a fair bit of cash.
Bulk Buying
Most, if not all companies in the catering industry will buy in bulk – particularly non-perishable items. Whether it’s bulk salt, napkins, or condiments, the more you buy, the more money you save.
This is usually only profitable if you use all the products before their use-by date, so before purchasing, calculate how much you typically go through each money and take it from there.
When running a café, food waste is just money down the drain, so it pays to do adequate research before making a purchase, or a chunk of your profits might end up in the recycling.
Cheaper doesn’t always mean more profitable
When looking to maximize your margins, you may be eager to buy the cheapest products possible. Although you can get away with this with certain items, it’s certainly not something you should do across the board.
One thing that makes customers return is tasty, affordable food. So, if you suddenly start serving inferior products, it could put people off. Getting customers to come back is even more difficult than acquiring them in the first place, so this is certainly something to avoid doing.
The better your food tastes, the more likely it is that people will recommend you to others too, so find a balance, and you could see your profits soar as you are running a café.
Keep your menu simple
When running a café, the more efficiently your business runs, the more likely you are to make money. So if your menu currently boasts hundreds of dishes with various modification options, it may be a good idea to simplify it.
Analyze what sells and what may not be such a hit with the customers and get rid of anything that isn’t proving popular.
As well as reducing the number of items you need to buy, it should improve efficiency in your kitchen, which will also save you money in the long run and make things far easier for your kitchen staff.
Generate new customers
The busier you are, the more money you will make, so you must continually strive to gain new customers. Luckily there are various ways to do this when running a café. One of the best ways is to build your brand.
Use local social media advertising to spread the word about your business and ask friends and family to tell their friends about it. Leaflet drops may be a less modern marketing approach but, if you live in a small town or village, it can do wonders to boost sales.
Figure out ways to make passers-by choose your café over others. It may be that you run a ‘2 for 1’ offer at certain times of the day or offer a small discount for pensioners on set days of the week.
Know your numbers
It should go without saying, but you might be shocked to learn that many business owners don’t analyze their sales and have no clue whether their company is making money. When running a running a café, or any business for that matter, you should always keep track of all income, overheads, incidental expenses and analyze your margins.
Establish which products generate the most profit and those which are the most popular, then have your waiters and waitresses promote those products to customers. Knowing your numbers will not only keep you on the path to success but should also help you generate more income.