10 Quick Wins to Improve Your Margins
Simple changes you can make to improve profit without completely changing the way your business runs.
Start with the things you can control
Improving profit does not always mean putting prices up or chasing more sales.
In hospitality, small leaks can quietly cost a lot of money. Over-pouring, waste, supplier increases, poor pricing and too much labour can all chip away at your margin.
The good news is that you do not need to fix everything at once. Start with a few simple checks and build from there.
restaurants & cafés
waste & labour
the sales you already have
Check your best-selling products first
You do not need to check every item you sell. Start with the products that bring in the most sales.
If one of your busiest products has a weak margin, the impact can be much bigger than a poor-selling item with the same problem.
Pull your 20 best-selling food and drink items and check the gross profit on each one.
Do not only look at what sells the most. Look at what makes you money as well.
Check your portions and pours
Small over-portions do not look like much during one service, but across hundreds of dishes or drinks they quickly add up.
Check that the portion actually being served matches the portion you used when working out the price.
If your costing assumes a 25ml spirit serve but the team is regularly pouring more, your real margin will be lower than the number on paper.
Pick five busy dishes or drinks and physically check the portion. You may find the problem very quickly.
Check what your suppliers are charging you
Supplier prices can slowly increase without anyone noticing. A few pence here and there may not look serious, but on products you buy every week it can make a big difference.
Compare your current prices with older invoices and check any increases you do not recognise.
Check the latest price on your 20 highest-spend products against what you were paying a few months ago.
Start with the suppliers you spend the most money with. That is usually where the biggest opportunity sits.
Take waste seriously
Waste is easy to ignore because it often disappears into the bin without being recorded.
Spoiled food, incorrect orders, breakages, over-preparation and drinks poured by mistake are all products you paid for but never sold.
Record waste for one full week. Do not worry about building a complicated system yet. Just find out what is actually being thrown away.
Look for patterns. One repeated problem is much easier to fix than trying to stop every type of waste at once.
Look at what customers actually buy
Two products can have very different margins. If customers keep choosing the lower-margin one, it affects your overall profit.
You do not need to remove popular items. Instead, look for simple ways to make your better-margin products easier to notice and easier to sell.
Menu position, descriptions and staff recommendations can all help move customers towards products you would like to sell more of.
Do not increase every price in the same way
A blanket price increase is easy, but it is not always the best answer.
Some products may already have a good margin. Others may be badly underpriced.
Review prices one by one and focus on the items where a sensible increase can make the biggest difference.
Raising everything by the same percentage can make obvious value items feel expensive while still leaving other products too cheap.
Keep an eye on discounts, voids and freebies
Discounts and complimentary items are part of hospitality. The problem starts when nobody knows how much they are actually costing.
Pull a report and look at how much was discounted, voided or given away over the last month.
Find the three biggest reasons for discounts and voids. Then decide whether each one makes sense.
This is not about stopping good hospitality. It is about making sure the business knows what it is giving away.
Match your team to how busy you are
Labour is one of the biggest costs in hospitality, but simply cutting hours is not the answer.
Look at when your sales actually happen and make sure your rota matches the busy and quiet parts of the day.
Cutting too many hours can save money on the rota but cost you sales and service later.
Look at labour by day and by time of day, not only as one percentage at the end of the week.
Track a few important numbers every week
If you only look at profit when the monthly accounts arrive, the problem may already be several weeks old.
You do not need a huge report. Start with a few numbers that tell you whether things are moving in the right direction.
- Sales
- Food and drink margin
- Labour cost
- Purchasing
- Waste
Five useful numbers reviewed every week are better than 50 numbers nobody acts on.
Make margin part of your weekly routine
The biggest improvement usually comes from doing the simple checks regularly.
Put 30 minutes aside each week to look at your numbers, understand anything unusual and agree what needs to happen next.
Put the review in the diary now. Same day, same time, every week.
Profit improves when someone owns the numbers and follows up the actions.
You do not need to fix everything at once.
Start with the areas that are easiest to check and most likely to make a difference.
Look at what you sell, what you buy, what you waste and how you schedule your team. Then repeat those checks regularly.
Small improvements made every week are usually far more useful than one big cost-cutting exercise once a year.
Find out where your biggest opportunities are.
Take the Setori Quick Review and get a clearer picture of where your business could improve first.