Maximizing Sales with Limited Capacity
In the restaurant world, it is a common refrain to say an entree pays the bills, and extra courses or add ons create profit. Restaurant financials are a little more complicated than this, but it is an easy way to demonstrate the importance of salesmanship and smart menu design.
To answer this question for your business you will have to parse through the different factors that impact sales revenue per guest. It can be safely assumed that every guest will purchase a meal, so the other variables to analyze are upsells, courses, drinks, and table turns. We will have to get some basics out of the way first.
Let us start by making a distinction between add-ons and drinks vs courses. The primary difference is that upsells and drinks happen at the same time as the entree, and an additional course adds time to the guest experience. Some examples of upsells include:
Adding a protein, such as chicken, to a salad
Adding toppings, such as sauteed mushrooms, to a steak
Offering a larger portion size for on item, such as a larger bowl of chili or soup
Upselling can extend to drinks, but the first step is selling a drink rather than giving away water. Soda is low maintenance and offers high profit margins, but offering other beverages appeals to health conscious guests. Many companies have experimented with premium non-alcohol beverages such as slushies to capture a higher price point for a non-alcoholic item. Alcoholic beverages offer the greatest upsell potential though. Longer pours, premium liquors, craft beers, and bottle service are all easy ways to capture more money.
Adding a course adds time to the guest experience. How much time? Well, that depends on your restaurant and menu, but you can easily think about this in relation to an entree only experience. For example, does adding an appetizer add 25% more time to the table turn? If so, is the price at least 25% of a one course experience? This relationship between table turn time and added course revenue will dictate the benefit of selling extra courses. If an additional course adds a greater percentage to the guest check than the added table turn time, than focusing on additional courses will increase revenue. Otherwise, it is best to eliminate the additional courses (such as desserts and salads) to maximize revenue.
This balance between course value and table turn time is only relevant at full capacity, but that's where many of you will be most of the time with a 50% capacity reduction. As restaurant operators you need to crunch your numbers and understand where the most value lies. To maximize your sales we ultimately need to deploy every technique available to us. Here are some examples of sales building techniques at full capacity:
Focus on premium drinks consumed while eating
Get a second drink sale before the food arrives
Build food upsells into the menu
Offer desserts to-go
Consider switching all salads to entree size and increase the price
If capacity changes by day-part, consider different lunch and dinner pricing structures
Consider eliminating items with long cooking times
Add staff to increase the table flipping process
Focus on speed of check out with service staff
Have a communication system in place to inform hosts immediately when a table is cleared, either through headsets or a software program
Charge a no show fee for reservations
A 50% capacity reduction does not have to equate to a 50% reduction in sales. With smart adjustments to the menu and sales focus, you can increase your revenue per guest and maximize your sales potential. You must be informed by the numbers in your business to determine which techniques are right for you.
