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How to increase your bar's profitability? Undoubtedly, this is one of the biggest challenges that entrepreneurs in the segment can face, especially with the frequent increase in inputs and food.
However, with a little strategy and organisation, it is possible to improve results, balance accounts and have a profitable business.
Do you want to know more and achieve the results you've always dreamed of? So, stay with us and follow this article until the end.
2. Reduce or eliminate certain costs
Do you know absolutely all the costs of your bar? We ask this question because, mathematically, there are only two ways to increase profitability:
- Increase revenue;
- Reduce expenses.
Corporate financial management is a big two-sided scale, with income at one end and expenses at the other.
Based on this principle, the secret is to make the revenue side permanently heavier, whether due to a large volume of inputs or a reduction in outputs (expenses).
Therefore, with the help of a financial management system or a spreadsheet, make a detailed survey of all your bar's monthly costs and expenses.
Next, observe expenses that can be eliminated or reduced without compromising the operation of the business and put this into practice to increase your restaurant's profitability.
Reducing or eliminating expenses is one of the key steps to increasing your restaurant's profitability.
3. Set up a tax plan for your bar
With the support of an accounting specialist in bars, you can set up tax planning and save a lot on paying taxes.
We recommend developing complete tax planning that takes into account several factors, including:
- Monthly and annual billing;
- Value of pro-labour and payroll;
- Taxation of each product (CST, NCM…);
- Products with single-phase taxation;
- Tax benefits and exemptions;
- Use of tax credits;
- Among other important items.
There's no denying it; paying fewer taxes will make it much easier to increase your bar's profitability, right?
4. Avoid taking out loans
Taking out loans is one of the practices that can harm and jeopardise the profitability of any company.
Whenever you resort to loans or revenue advances, your bar will pay through bank interest much more than it received.
Knowing this and based on this principle, the ideal is to organise finances to avoid taking out bank loans or anticipating receipts from card sales.
To do this, strictly control your cash flow, strengthen your working capital and try to set aside a portion of your profits in an emergency reserve.
If a case does arise where an increase in cashflow is necessary, try to make use of different forms of financing such as invoice finance. Whose terms are can either be more strict or flexible depending on what you're looking for.
5. Increase your restaurant's revenue
When the objective is to increase the profitability of your restaurant, one of the alternatives is to invest in strategies to grow revenue first.
Therefore, invest in marketing actions that help increase your bar's visibility, advertising on different channels, such as television, radio and social networks.
Also, invest in accepting orders for delivery via delivery, thus enhancing invoicing and revenue entry in your establishment.
With more customers and orders, you have everything to expand your business, making your restaurant a highly profitable establishment.
6. Make promotions
There is no doubt that promotions help increase your bar's sales volume. Therefore, the tendency of a customer to buy one or more promotional items is very high.
Promotions can be temporary, such as on commemorative dates. However, it is possible to innovate thinking about strategic solutions, such as pink October – benefiting women, blue November – for men, and progressive discounts – where the more you buy, the more discount you will have, that is, in addition to standard promotions, think of new possibilities to attract customers.
Another important tip is to prefer promotions that value customer loyalty or increase dish output. Worrying about how to promote these promotions using social networks, due to the reach being much greater, is essential.
Permanent promotions can also be created, such as combos and kits. The customer is encouraged to buy more, increasing the average ticket and profit. Make the customer pay an extra amount to receive a larger portion of a product, different from what was originally ordered.
The main thing is encouraging the consumer to want to be in your establishment or get to know your products. It may be necessary to offer some price advantages to customers without taking away from their profit, on the contrary, to increase it. You can consider pricing items for a combo, offering discounts for purchasing the complete kit.
All processes within the bar must be understood as a cycle since all procedures must be taking place simultaneously to promote increased sales and, consequently, profitability. In addition, the techniques for offering promotions and prices can and should be used for internal service and delivery.
9. More affordable dishes and fewer options
The most expensive dishes can be used to highlight the most affordable ones, always placing them at the beginning of the menu and the cheapest ones in the middle towards the end. Thus, a more advantageous purchase perception is created for the customer.
When the customer has many options to choose from, he may end up giving up buying. With too many options, he feels paralyzed and pressured. Therefore, having fewer dishes on the menu can help you buy more quickly.
10. Delivery
Delivery sales have grown considerably in recent months. Making meals available at home has become the main tool for bars to overcome difficulties. Therefore, having a digital sales channel is essential for your delivery to profit more.
Delivery must be well planned; it is not only the quality of the food that must be considered but also the delivery dynamics, staff training, packaging, food temperature, communication with customers, etc. It is an experience that bars must make as pleasant as possible to retain customers.
Conclusion
In conclusion, increasing a bar's profitability may seem like a daunting task, but with a few strategic and organizational steps, it is achievable. One of the most important factors to consider is menu pricing, which needs to be done correctly. The reduction or elimination of certain costs, setting up a tax plan, avoiding loans, and increasing revenue through promotions and social media can also improve profitability. Ultimately, it's important to view all the processes within the bar as a cycle and ensure that they are happening simultaneously to promote increased sales and profitability. By following these steps, entrepreneurs in the bar industry can achieve the results they've always dreamed of.
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