Increase your Cafes Sales and Profit

The small cafes that dot the sidewalks of the world’s city streets represent the lifeblood of food culture around the globe. Despite this rather hallowed status, many cafe owners struggle to keep their sales steady.

We look at some ways to increase your sales and profit.

How to Increase Cafes Sales & Profit

80/20 Customers

Most people have heard of Pareto’s Law: Eighty percent of your results shall come from 20 percent of your customers. According to a LinkedIn article, one of the most important steps that cafe owners can do is to identify who spends the most money in their shop. This is your 20 percent. Who are the people in your 20 percent?

If you’re a cafe owner, chances are this is the regular that buys his/ her cup of coffee and muffin at your shop every morning. While his/ her purchase may only be a total of £5 each time, including tip, these visits add up over the course of time. It’s tempting to feel enamored over the person who stops in once and orders £100 worth of food. (This person could be an out-of-town visitor.)

The person who spends the £5 a day, five days a week spends more than £1200 per year in your cafe. That doesn’t count the days that this customer comes in for lunch or tea (if you serve those meals). This is the person you and your staff really want to take care of. Now, let’s say you have 1,000 such customers. Those customers will bring in more than a million dollars in sales each year – give or take. It is imperative that you take care of these customers.

Keeping Customers Vs. Getting New Ones

This is related to the above entry. Not only is is important to know which customers are your 20 percent customers, it’s important that you keep them. If your staff is making the mistake of making the cafe’s regulars feel taken for granted, it’s up to you to change this mindset. These customers keep your business afloat, and if they feel taken for granted, eventually, they’ll take their money elsewhere.

It costs you a lot of money to replace a customer. According to a LinkedIn article, it costs four to 10 times more to get a new customer than to keep one you already have. Some experts say the actual figure is even higher.

Aside from providing them with good customer service when they come in, you should be thinking about ways you can reward them for their continuing patronage.

Ideal Customers

If you do have to replace your customers, it’s helpful to know what your average “ideal customer” looks like, what he/ she drinks, why he/ she comes in, etc. For example, if your cafe sits on the corner right across the street from the university, chances are many of your regulars will be university students. They may come in for their morning coffee or to study for a few hours.

Taking this example to the extreme, then, you may want to add features like free WiFi, early morning hours, and comfy couches where they can lounge. Once you have an ideal customer in mind, it makes it easier to think about the types of amenities that might appeal to this person. Every decision that you make about restaurant improvement should be looked at through that lens.

Menu Redesign

Not all methods for making more money come directly from your regulars. It pays to make some changes to your business based on human nature. AZ Central suggests a menu redesign. Typically, your most expensive items shall be placed in the upper right-hand corner or in boxes. That’s where people’s eyes travel first.

You also want to make sure never to list your prices in a single column: People will look down the column and choose the least expensive dishes. Finally, making your menu’s descriptions good and appetizing can increase sales by 27 percent.

Add Ons and Upsells

There’s a famous Italian restaurant chain in America that instructs its servers to go to every table with an open bottle of wine in hand. The servers then ask each person if he/ she wants to sample some wine. This chain sells a lot of wine.

This is an example of add-on selling. Basically, if you own a cafe, you can assume that people will come in planning on buying their lunch. True enough, some will come in for dessert or coffee only, but mainly, they’ll be there for breakfast, lunch, or tea or dinner.

That being the case, ask yourself what kinds of items can you suggestively sell to them? Maybe you offer a soup or a salad before they get started. Or you can offer them drinks from the bar if you have one. Show them the dessert tray if your cafe has one.

Upselling is related to add-ons. The simplest way to explain upselling is to say that it’s the difference between selling the store brand and selling the top-shelf brand of something. For example, let’s say your wine bar sells Chardonnay and Chardonnay Superior. The price difference might be £.75.

However, sell enough of the top-shelf drink (in place of the regular Chardonnay), and you’ll eventually sell the equivalent of extra two to three (or more) glasses per night (for example). If your regular Chardonnay costs £6 a glass, two or three extra glasses a night adds up to £6500 by the end of the year.

The trick to making both of these techniques work is to teach your waitstaff about suggestive selling. They can’t be shy about offering your customers extras. While the staff might feel like they’re pushing something on customers, the customers may actually enjoy trying something new. It’s all about the mindset.

Outdoor Seating and Other Space

Sometimes, just adding more selling space increases your sales dramatically. There are several ways to do this. One simple way is to replace the tables and chairs in your cafe with ones that are slightly smaller. This may allow you to add three or four more tables to your restaurant, which in turn, increases your sales.

Here’s how that looks. Let’s say that your check average per table is £30. You also know that through the course of lunch and dinner that each table shall turn 20 times. That’s £600 per table per day. Adding four more tables to the restaurant gives you an extra £2400 per day.

Another variation on this, of course, is the outdoor seating area. If you have the space to add some tables outside, then do it. (Use cafe barriers to separate this area from the street.) You’ll see the rewards of this during the warmer months. However, you can also extend the reach of the warmer months by investing in heat lamps for this area. This means that you may be able to open your outdoor seating area in the early spring and not close it until the late autumn. Use commercial bistro sets or aluminium garden furniture suited to outdoor weather.

Finally, many restaurants are taking their businesses mobile by either offering catering, including offering up the staff to work the event, or investing in food trucks. Food trucks in particular are a fun and effective way to not only increase your bottom line but do some advertising, too.

Not only will potential customers see your truck out and about, they can try something from your menu without actually coming into your restaurant. You can schedule your truck to be at different spots around the city during lunch, and then posts the location of the truck on your business’s Facebook and Twitter pages to tell your regulars when you’ll be in their neighbourhood.

According to Food Truck Empire, the majority of food truck operators bring in at least $100,000 per year. Some bring in as much as $200K. In Pounds, that’s £76,747 and £153,494 respectively.

What Else?

Do you have a Happy Hour? Offer student discounts on certain days of the week? Have a takeout menu or an online order form? According to Chron, Happy Hour and other “special occasions” are a great way to increase your restaurant’s bottom line.

People who wouldn’t normally come into your shop during that time of the day may wind up visiting you (and spending their money). Anytime you can get someone, one of your regulars, to come in more often, you make more money. Happy Hour might be the thing to do it. Or maybe you start offering lunch or dinner specials. You can let your regulars know via social media or your mailing list.

By doing these sorts of activities, you may encourage your regular muffin-and-coffee person to become the muffin-and-coffee-and-lunch-special person. This may add another £20 a day per person to your daily totals.

The most successful cafes and restaurants consistently deliver the goods to their customers. If you do that, you’ll never have to worry about your cafe’s sales again.

 

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