The unforeseen COVID-19 pandemic has forced many businesses to shut down for good, but none have faced worse effects than the restaurant industry. For an industry that usually relies on foot traffic and in-person seating, some say one-third of all restaurants and related businesses will close for good. If you’re one of these restauranteurs who fear they’ll lose everything, try out these tips on how to save a failing restaurant. While it might not save your business from closure, these suggestions can at least help.
Analyze Your Finances
The first step to saving your restaurant is analyzing your finances. You cannot make progress or fix any errors without knowing where your spending habits come into play. While managing a restaurant’s finances can be tricky, it’s important to know where the money goes. Consider where you spend too much and too little. You may need to cut costs and redistribute funds to stay afloat. This may also mean charging more for food. Your profit margins should provide a healthy balance between supply costs and profits.
Clean Up the Menu
Another important review point is your menu. There are two camps to fall into having too few or too many menu options. Usually, it’s the latter that leads to decreased revenue and eventual closure. In this case, clean up your menu. Do not offer more than you can handle, or even if you can handle it all, offer your most valued items instead. These can be staples in ethnic cuisine, fast food, or specialties items not found elsewhere. Your food should represent the theme of your restaurant, no matter what that is. Whether that’s pizza, tacos, sushi, hamburgers, steak, or seafood, highlight these foods and nothing else except for add-ons that complement them, like appetizers or desserts.
Build Customer Loyalty
One effective way of how to save a failing restaurant is to build customer loyalty. Restaurants don’t thrive on foot traffic from new customers, but rather from repeat customers. New customers are one-time sales whereas repeat customers guarantee long-term profitability. Optimize your customer loyalty with a rewards program targeted at those who often dine at your restaurant. This could be a free drink, dessert, another menu item, or a discount code for a certain percentage off their final bill. This could lead to thriving reviews and a greater number of returning customers.
Refine Target Markets
Perhaps you’re also branching out to too wide of a target market. When in doubt, keep your target markets small but sizable. In other words, refine your target so it adheres to a market that will bring you high revenue. For instance, restaurants can target Millennials with trendy colors, décor, menu items, and social media communication. Even minuscule changes to your menu or aesthetics will show your target market you’re there to meet their needs, and they will return the favor by providing you with business.