All about profit, profit, profit!

Posted on In Focus Mar 2012 - by Tandoori Magazine
All about profit, profit, profit!

There is no sign of the end of this economic depression we are still facing. That said the great news for us restaurant owners is that people still get hungry every day and there are also still enough people out there who are spending. This year promises to be challenging and it is important that we get our priorities right from the outset. 

 
I spent two weeks this winter deciding on what my priorities should be for 2012. After a number of planning sessions with my management team, I concluded that this year is all about strengthening the business, making more profit than ever before and cutting back on as many of the other numerous tasks that we face on a weekly basis. 
 
As a business expert, I have delivered multi-million-pound projects for some of the UK’s biggest companies and now I have implemented the same practices to Mushtaqs restaurant and have seen some incredible results. In this edition of Tandoori, I will explain the top 5 things that Mushtaqs will be focussing on in 2012 to make more profit.
 
1. Increase your prices unashamedly. Mushtaqs restaurant has increased prices by a minimum of 11%. Given the rise in food prices and general inflation, why should the Indian restaurant sector lag behind when it comes to increasing prices? If you deliver great food with great service the customers should not have too much trouble with this. The publicity surrounding food inflation made it easier to increase prices as customers were expecting price increases.
 
2. Something new for your customers. This year, Mushtaqs will be introducing a number of new dishes on to the menu. It is important that you regularly offer something new to customers. This has a couple of great benefits – your customers see that you are progressive and moving forward and also, if the customer is trying new things there is less chance of them becoming ‘bored’ with their usual choice. Companies such as McDonalds and Pizza Hut introduce something new every eight weeks precisely for this reason. At Mushtaqs, our aim for 2012 is to introduce a new menu item every month.
 
3.  Negotiate harder with your suppliers. It is important to review contracts on a regular basis to ensure that you are paying the most competitive price for your raw materials and services. In this climate, suppliers would do anything to keep your business but it is up to you to scope out potential money-saving avenues and do not be shy when negotiating prices. Mushtaqs has three suppliers for every product range. This applies gentle pressure on the suppliers as they know they are competing with other suppliers. 
 
4. Don’t worry about your sales figures. In the last month I have spoken with at least ten restaurant owners and there is one common trait – they all know the sales figures, but when I ask them about the profit figure, they are unable to give me a decisive answer. Generally, many restaurant owners focus too much on sales and not enough on profit. Being in business is all about profit, not turnover. Do you know how much profit you make each month? 2012 is all about profit for Mushtaqs, increasing average spend, selling higher profit items, eliminating waste and reducing non-essential expenditure. 
 
5.  Focus more on your existing customers. It’s easier selling 10% more to current customers than trying to find 10% more brand new customers. Ensure all customer-facing staff are English-speaking and are fully trained on the menu and upselling - I find upselling is the fastest way to boost sales. Also, first impressions last, and having a confident, knowledgeable, English-speaking team member can get the customer experience off to a great start. 
 
Make 2012 a great year and remember, when faced with any task in your restaurant, ask yourself this question: Will this make my restaurant more profitable? 
 
At Mushtaqs, if the answer is “no” then we will be spending as little time on that task as possible. If the answer is ‘yes’, then we will embracing the task and making it work for our business. I ask myself this question many times in a single day and it has really helped me to maintain my focus and I am pleased to say that this year profits are forecast to be the highest ever. Remember, it is not about sales, it is all about profit. 
 
Good luck for 2012!  
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