This is the fourth episode in our Restaurant Value Engineering podcast series.
In the last episode, we talked about 5 of 10 ways you can utilize Restaurant Value Engineering to boost value and make a profit.
For this episode, we go over the next 5 helpful ways to use Restaurant Value Engineering to boost your sales. We introduce steps on how to run your restaurant so that you can create the most value for you and your customers.
Some of our talking points include understanding the costs that go into your business to better optimize pricing and expenses and setting a dynamic pricing strategy to get the maximum value across a broad range of customers. We will also talk about establishing a Happy Hour, offering a chef’s table, and leveraging an online ordering system.
Restaurant Engineering Examples for Your Restaurant
You don’t want to be one of those restaurant owners who put in 70 hours of work per week only to lose money. We’ll let you in on the secrets of restaurant owners who stay profitable while working for only a few hours a day.
This is a continuation of the last episode where we discussed the first five of ten restaurant value engineering ideas that will help your business stay profitable.
It’s all about pricing your food right and increasing the perceived value of your offerings by telling a story and using technology to build your brand. We’ll talk more about how value engineering can help you extract the maximum value out of your resources.
Get ready for the next five big ideas!
Review input costs
We’ve talked about increasing the prices of your food offerings to improve profitability. There’s also a way to boost profits while retaining the food prices. You can do this by taking a closer look at your input costs. There may be opportunities to reduce expenses. You can shop around for cheaper ingredients or you can scout for better suppliers. Also, you need to make sure you are not using premium inputs for non-premium dishes.
Charge a premium for busy hours
Do you have more customers coming in for dinner? Then you should consider charging more for dinner than you do for lunch and breakfast. The same goes for busy weekend nights.
Get creative with how you carry this out. You can increase the prices across the board, then offer a discount for less busy days and hours. This way, you effectively put a premium on your busy hours while providing perceived value for the “discounted” offerings.
Improve your revenue per available seat hour (revpash)
A concept commonly used in the airline industry, revpash lets you focus on improving the ‘revenue per available seat hour’. It works perfectly in a restaurant setting where tables and seats are just as limited.
Improving the profitability of your restaurant in terms of revpash allows you to get creative with your business tactics. If your restaurant is only open for dinner, calculating the revpash may make you realize that you can increase your profits by opening your doors for lunch and breakfast. You can even put a cap on how long your customers can stay for a meal. This is particularly effective for restaurants that draw in crowds.
If your space allows it, you can also add tables outside your restaurant to increase your seating capacity.
Milk your happy hour
Happy hour should not be just about alcohol. Use it to draw in diners. However, make sure you don’t offer the entire menu as your staff would be busy prepping for dinner. The best way to go about this is to offer easy-to-prepare or pre-prepped dishes at a discount.
There are many ways to benefit from the happy hour. People who visit your restaurant for the happy hour may end up staying for dinner. You can also upsell them on drinks. Plus, the happy hour crowd can make your restaurant look busy, drawing in even more curious diners.
Offer a dining experience at the chef’s table
Allow customers to dine at the chef’s table, and don’t just do it to increase revpash. Create a buzz around the experience, so people would be willing to pay a premium for it. Be theatrical with your approach and offer specific conditions. You can ask customers to spend x amount per head or commit to a specific menu or price level.
You’ve just heard the remaining five of our ten restaurant value engineering ideas to improve the profitability of your business. We didn’t just stop here though. We went overboard with our value offering and added four more big ideas to the list. Listen to the podcast to get the juicy details!
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