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  • Writer's pictureNelson Nóbrega

Quick Tips to Boost Profits

Updated: May 12, 2021

(Guest post by Richard York)

Quick Tips to Boost Profits

The core purpose of most businesses is to make money, right? Balancing the books so that more money is coming in than going out. And yet so many businesses are decreasing their profits due to their poor decisions and processes – throwing money out of the window rather than cashing it in their tills.

Quite often, managers are so busy working hard to run their business that they miss opportunities to make it more profitable. So, what is it they’re missing?

Firstly, let’s clear one thing up: if you’re making a profit, you’re certainly on the right track! It means that your customers value what you do and are willing to pay more than it costs you to deliver the service or product.

Then the question is: how do you increase your profits?

Not by bumping up your prices and ripping off your customers. Quite the opposite, in fact. It’s about making and implementing strategic business decisions that enhance your value proposition to build a resilient and successful business.


1. Understand your business

Of course you understand your business. If you didn’t, it would have failed by now. What I mean is this; take the time to go through your business data and analyse every aspect of your business in terms of its financial impact.

Where is money coming in from, and where are you spending it?

In the restaurant sector, for example, an obvious place to start is the menu. Each dish requires different ingredients, equipment and skills to prepare. Do you know exactly how much each meal costs you to produce? How does the production cost compare to the selling price?

A simple analysis of food margins might reveal some unexpected results… you may be selling dishes for the same price even though one may cost you far more to make than the other (see the example below).

This type of analysis will enable you to make profitable decisions about Dish 2, by either:

· reducing the costs of the dish


· increasing the selling price.

It’s amazing how one or two small margin improvements can increase profits by €000s over a year.

Another area that is often overlooked is sales volumes:

How many of each item do you sell?

If certain dishes sell in very low volumes, this could have a detrimental impact on profit, because all those ingredients are being wasted – especially if the dish requires unique ingredients.

Analysing just these two key areas (margins and sales volumes) will allow any business to get a good insight into how they can optimise their profitability.

2. Get your staff on-board

The staff who interact with your customers are often referred to as ‘front of house’ – they’re the face of your establishment charged with ensuring your customers are well-looked-after throughout their time with you. Typically, when your customers go out, they want to do far more than eat . They want to dine, to have an experience.

Do your staff members enhance your customers’ experience?

Or do they treat customers as an inconvenience?

A key point to remember is this: the better the customers’ experience, the more likely they are to return and/or recommend your business (valuable word of mouth advertising & on-line reviews)… and the more likely they will be to leave a generous tip. All of this helps build a resilient, profitable business.

As you analyse and gain a deeper understanding of your business, you should also talk to your staff about your findings and decisions. When a team understands the margins for each dish on the menu, then they can help drive profitability.

Using the menu example above of the margins for 2 dishes, consider the following two dialogues:

In dialogue 2, the waiter subtly points the customer in the direction of the more profitable dish, and with one simple sentence generates more profit for the restaurant.

It’s not all up to the person in charge. Every employee of a business has a role to play in driving profitability, and if you work on your strategies together, everyone can do their bit.

3. Think in terms of Value, rather costs

The hospitality industry is well-known for having tight budgets. And of course, managing costs is essential to any business. But at a certain point, managing costs too tightly can actually be counter-productive and even end up being detrimental to your business.

A typical example is staffing; Don’t scrimp on staff!

From the customer’s perspective, under-staffing tends to lead to a negative dining experience. Dealing with worn-out waiting staff who are rushing from table to table, waiting for what feels like an eternity to place an order, orders being forgotten, tables left uncleared etc. etc. only generates negative feelings and memories for the customer.

From personal experience, I won’t go back to or recommend a restaurant (no matter how good the food), if the service is lacking in the ways mentioned above. And I’m not the only one.

Conversely, having sufficient staff not only enhances the customer experience, but is also an excellent way to increase profits. How?

1. Your staff have time to engage with each customer, as shown in dialogue 2, giving them the chance to steer the customers’ choice towards higher margin dishes.

2. Positive engagement with customers allows your staff to maximise the revenue from each diner. For example,

a. taking a drinks order whilst the customer is looking at the menu

b. ensuring that drinks orders are taken throughout the meal

c. engaging with the customer in terms of the drinks and dessert menu, making suggestions

d. taking a coffee order,

e. taking additional drinks orders, e.g. digestif, or dessert wine.

It often amazes me how difficult it can be to order a second drink whilst out for a meal. If the serving staff are overloaded and therefore inattentive to the customers’ desires, it can easily result in missed opportunities to increase revenue, i.e. by the time they respond to the customer, the meal is nearly over and the need for the second drink has passed. The lack of attention can also be the tipping point to turning an average dining experience into a poor one, potentially resulting in customers who would have stayed for a coffee or dessert leaving as soon as they finish their meal. Maybe even heading somewhere with better service for a drink or to satisfy their sweet tooth.

4. Your Next Step

The tips in this article are sure to put you on the right track towards building a resilient business made up of engaged staff who serve satisfied customers. However, we’ve barely scratched the surface of the analytical thinking you could apply to a hospitality business to increase profit.

Quick wins are available to all businesses if you know where to look, and the more data you have available, the more data-driven insights can be uncovered to help you make better decisions that drive better financial results, i.e. profits!

How could you work smarter to become more profitable?


If you would like to be supported on your journey by an experienced Business Analyst Consultant, please contact the author, Richard York by email or visit his website

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