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The restaurant business is exceedingly risky. A multitude of factors can cause your profits to nosedive even if you’re serving quality food at a competitive price. Success in the restaurant business necessitates a constant examination of your business model so you can tweak accordingly as the needs of the customers evolve.

Crafting a solid business model that accounts for every variable is the key to sustainable growth and financial success. However, saying is much easier than doing – with so many daily duties as a restaurant manager you may overlook vital areas where your business model could be improved. Read through our restaurant business model improvement tips if your profits have been suffering.

Eliminate Tipping

 This controversial practice has led to enormous profits in establishments that handle it effectively. The main problem with the tipping practice is that it doesn’t accomplish its goal of measuring customer feedback. Customers are polite enough to tip adequately if they’re unsatisfied with their service, but after the meal they’ll never return.

Another huge problem with tipping is that much of your staff lives near the poverty line, making it difficult for you to build a fully dedicated team or retain employees over a long period. Seeing these innate problems, Bobby Fry of Bar Marco in Philadelphia no longer accepts gratuity. Employees earn a salary of $35,000, and with bonuses they can make nearly $50,000 a year.

Now, the front and back of the house are paid more equally and work together better as a result. Because of the well-publicized no-tipping policy at Bar Marco the team is able to be more creative on the menu, and they have a wider variety of menu item prices. In addition, according to Fry, so many people want to work at his establishment now that he’s able to build a strong team that delivers excellent service.

Don’t Shortchange the Customer

When managers try to adjust their restaurant business model to generate profits, the changes often come at the expense of the customer. Reducing portion sizes, purchasing lower quality ingredients, or raising prices all de-value the customer, and they’ll see right through it. If you try to squeeze every dime you can from your customers you’ll only lose money in the long-term.

Instead, find practical solutions that increase your profits without negatively affecting the dining experience. For example, some restaurants try to increase table turnover rate by focusing on fast service and rushing the customer. But this method of increasing turnover can stress out a paying customer and cause them to not return.

Instead, invest in tableside digital dining tablets so customers can check out whenever they’re ready. Digital dining service allows customers to order food, request more drinks, and pay for their food without flagging down a staff member. This leads to a higher table turnover rate and more customers served per day without detracting from the customer’s experience.

Become More Sustainable

We’re not trying to be redundant, but restaurants that reduce waste and recycle generally have more sustainable business models. We’ve already discussed methods of making your restaurant more sustainable, but how exactly can it boost your bottom line?

Reducing your overall carbon footprint lowers your bills by cutting back on waste and packaging costs. Whenever you buy local fresh ingredients and cater your menu to serve items that are in season, you spend less money transporting food and can increase your margin of profit on seasonal, sought-after menu items.

Enacting an environmentally sustainable business model is not only good for the planet – it increases your profits. In addition to saving you money on bills each month, going green will earn your restaurant considerable public favor. Market your restaurant as a sustainable alternative to eateries in the area and your foot traffic will pick up accordingly.

Make these adjustments to your business model to ensure your restaurant continues to grow!
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