How much does each section or station in your restaurant generate in annual gross sales? Not many of us think of selling this way, but to do so opens one’s eyes to some interesting opportunities in the Land of Profitability Management……
Copyright 2007 Sullivision Inc.
No matter how you measure sales in your tableside-service restaurant (check average, sales-per-hour, revenue-per-customer), a different way of managing sales is by the square foot. Do the math: how much does each section or station in your restaurant generate in annual gross sales? Not many of us think of selling this way, but to do so opens one’s eyes to some interesting opportunities in the Land of Profitability Management.
Manage sales per section.
Let’s say you have 50 tables in your restaurant, and you divide them into ten sections of five tables each. If each of those ten sections seat 20 customers, and you have a check average of $10 per person, that’s $200 per section per “table turn”. If you’re open at lunch and dinner and those tables are full once at lunch and “turn” twice during the dinner per shift, you’re generating gross sales of $219,000 a year in each section. Even if you’re doing half that volume, it means an average of $109,500 per section per year.
That’s not only some potentially profitable real estate, it also makes a case for the importance of administering sales incentives and contests for your servers. Do you think a salesperson in any other industry generating $219,000 a year in sales would have some kind of incentive plan? So why shouldn’t your servers and bartenders? Add it up: teach your servers to increase incremental sales a mere 25¢ per customer and you’d see another $54,750 in annual gross sales (and $8,212 in higher tips)! Plus, much of that $54,750 would go straight to your bottom line, since your fixed costs (labor, rent, utilities) wouldn’t vary if you’re simply improving productivity and increasing sales with the same amount of customers and employees. Considering the opportunity a 25 cent check increase affords you, doesn’t it make sense to train your servers to suggestive sell that cola from a medium to a large or sell a $3.95 slice of Reese’s Peanut Butter Pie to every sixteenth customer? So what’s stopping you? Probably the way you think of the people who merchandise your menu.
Think of your servers as “franchisees” or tenants.
Once you follow the logic of managing sales per section, a new mindset appears. Each section or station in your restaurant could then be considered the individual server’s “store” or “franchise” for that shift. In this reality, however, the restaurant operator takes all of the risk and supplies all the amenities, utilities and products. Another key difference in this analogy, it should be pointed out, is profit.
Presuming a pre-tax average profit of five cents on the dollar for the operator and fifteen cents on the dollar for the server (based on an average 15% gratuity) the server grosses three times as much on average as the operator (franchisor) with no “costs” and minimal risks. The restaurant server, “retailer” or “franchisee” in essence makes three times the profit of the restaurant owner. Once this is emphasized to most servers, they begin to see the benefit in doing their dead level best to energize service and merchandise the menu throughout your ten “stores” or sections each shift.
If you take the analogy one step further and think of your restaurant sections the same way a manager of a retail mall thinks about shopping space or storefronts, the savvy operator begins to ask herself these questions:
- What kind of section “franchisee” or “retailer” am I looking for? What skills should they have?
- How well does each “tenant”/server maximize sales-per-square-foot?
- How well do they create flair and excitement in their “store” to induce repeat visits from our customers?
- What does the physical appearance of each of my “franchisees” and “mini-stores” do to maximize or minimize sales? Do I sell more in a clean store?
- How can I best use the tops of my tables and wall/ceiling/floor space to display point-of-purchase merchandising displays to help maximize sales and encourage more business?
- What kind of promotions/point-of-sale/menu design/uniforms best fit my “store’s” theme and encourage repeat business? Which do not?
- Should I combine dessert menus with the more profitable appetizer menus on that tabletop retail space? What about beverages?
- What kind of glassware, silverware, plates, and napkins maximize both the theme and profitability?
- What strategies or systems help me maximize table turns?
- What kind of section/station/bar table layout and design will maximum sales per square foot?
- What kind of marketing and training do my “section franchisees” or ”retailers” need from me—the operator—to be successful so they keep paying me “rent” in the form of higher gross sales and happy, repeat customers?
Obviously, there are a million more questions you could ask to align with the right mindset, but you get the idea. Instill and nurture a “run-it-like-you-own-it” mentality in your servers, bartenders, and kitchen associates. Adopt a retail manager’s perspective relative to section and table management, and market your sections and stations every day, each shift.
Why is all this important? Because if your “retailers” (servers) go out of business, so do you.