Running a profitable business in today’s competitive food service industry is challenging. With tight margins across the sector, even slight percentage changes to your food costs or waste levels can hugely impact your bottom line. Here, we bring you five top tips to help you optimise your margins without compromising on quality or service.
Analyse your sales mix
Start by thoroughly examining your menu to determine the precise profit margin you make per dish. Pay attention to those items that cost less to prepare yet allow you to charge higher prices.
For instance, dishes featuring chicken or seasonal vegetables, which tend to be cheaper ingredients, offer high margins. In contrast, premium items like steak or seafood incur higher food costs and slimmer profits.
However, rather than completely eliminating more expensive items, focus your marketing efforts on pushing dishes that offer a greater profit margin.
Actively manage your ingredients
Careful management of ingredients is essential to protect profit margins. Keep on top of ingredient usage levels through regular stocktaking. If usage and costs are monitored consistently, any concerning trends can be caught early, thereby preventing unwelcome surprises at month’s end.
It’s also worth building favourable relationships with suppliers to enable price negotiation and purchasing in bulk. The better deals you broker, the wider your margins.
Also, remember to continuously tweak your menus according to fluctuations in ingredient prices and popularity, as well as seasonal produce availability. Promote what’s economical and price your dishes accordingly when costs rise.
Streamline your processes
An efficient kitchen operation maximises productivity and minimises expenses – and the key to success in this regard is your staff. Invest in your team by training them for increased speed, consistency and accuracy in preparation and service. Enhance their skills, and they’ll better safeguard your margins.
Likewise, optimising your kitchen’s physical layout will improve your workflow, especially if you identify and rectify bottleneck areas.
What’s more, if you upgrade equipment and integrate digital stock control systems like DigiTally, you’ll speed up cooking and preparation times and slash administrative work. The result? Increased efficiency, which ultimately translates into higher profit ratios.
Review your menus
Engineer your menus to subtly emphasise items with the greatest profit margins. Strategies like daily specials, enticing photography and strategic menu layout can shift more orders towards your bigger profit makers.
Slash underperforming, lower-margin dishes from your offerings. There’s no need to keep them on the menu if they’re not selling. Instead, regularly review your sales figures and replace unpopular dishes with new, carefully priced items.
Portion control also plays a huge role in profit sustainability. Monitor plate sizes and ingredient usage levels to prevent overserving. Then, tactfully adjust recipes if needed. Although customers rarely notice slight downsizing, every gram saved will noticeably cut costs over time.
Minimise food waste
Last but not least, food waste is one of the critical eroders of profit margins in the food service industry. To tackle this issue, you must first quantify precisely how much wastage is happening and why, so you can effectively source solutions. Then, repurpose ingredients wherever possible – for example, by recycling unused breakfast meats or pastries in your lunch specials and doing the same for the dinner service.
Involving your team is vital. Educate them on portion control, stock rotation, spoilage prevention and creative daily specials to clear excess ingredients. Set goals and incentivise success through bonuses to keep waste at the forefront of everyone’s minds. Small, consistent efforts to repurpose, reduce and measure add up substantially over time.
The key takeaway is that optimising profit margins relies on attention to detail across your whole operation. Success requires some initial effort, but the payoff for even minor advances can be substantial when boosting your bottom line.
For more insight into maximising profits and minimising waste, check out the Food Service Matters podcast on Spotify, Apple Podcasts or Google Podcasts.
And if you’re interested in boosting your efficiency and watching profits soar, try DigiTally – the easy-to-use, intuitive food service software that helps save time, increase margins and combat food waste. Get in touch with us today to find out more!
