When push comes to shove, the restaurant business is a numbers game. Managers use past records to anticipate the number of customers they'll get and use the information while scheduling employees and ordering food. In addition to juggling those numbers, managers must also work out how much to charge for each meal, making sure the price is low enough customers happily order, but not so low the business doesn't turn a profit.
Recently, some restaurants have started offering delivery services to their customers. Customers like the delivery service because it saves them from having to leave the house or cook for themselves, and many restaurants like delivery because it's a way to increase the number of sales they generate each night. It also means juggling more numbers.
Calculating the Cost of Food Delivery
The food costs at a well-managed restaurant generally hover around 25 percent. If your restaurant decides against having a member of staff deliver food and instead reaches out to delivery services such as Uber Eats or Menulog, the food costs jump by 30-35 percent, and delivery costs are just one small portion of the additional costs the restaurant sustains because of offering delivery. Since delivery services means feeding more people, it also requires the restaurant to work with a larger staff. The extra expense is enough to make some restaurant owners and managers reconsider offering delivery.
Is Profit Possible?
The good news is that as long as the delivery sales come to an additional $25 a day and you've managed to maintain a solid 30% profit margin on each meal, even with the extra costs, you'll generate $500 each week, which should come to approximately $150 in gross profit each week, which comes to an additional $7,800 in gross profit you didn't have prior to offering to deliver food directly to your customers.
Using food delivery services like UberEats and Menulog makes a great deal of sense when you're first testing the food delivery waters, but once you know your customers enjoy the service, it's time to reconsider your options. You can significantly reduce the amount the food delivery service costs your business by simply installing an ordering service onto your website. Takeaway Solutions is a great choice. The white-label service does charge a fee, but it's nowhere near the 35% you were paying during the food delivery trial period.
Talk to your employees about delivering the food. You'll find that there's at least one or two people already on your staff who have transportation who are eager for additional hours. The best thing about using your own employees is that when they're not taking a delivery to a customer, you can put them to work cleaning up or cooking in the kitchen.
Reconsider What you Offer for Delivery
One of the mistakes many restaurants make when they start offering delivery services is allowing customers to order anything off the menu. By focusing on lower cost food items that have a long shelf life, and restricting your delivery orders to those items, you'll lower your food costs and see a higher profit from your delivery service. Many restaurants also add their most popular menu items and nightly specials to their list of delivery options
Don't Be Afraid to Charge More
It's okay to charge customers a bit more when they request you deliver something rather than coming to your restaurant to eat. Not only does delivering the meal cost you a bit more, but you're saving them the headache of having to change out of their pyjamas, driving to your restaurant, finding a place to park, and going inside. Most customers are happy to pay a little more for the convenience.
Contact Takeaway Solutions to learn how an online ordering app can improve your restaurant's annual gross earnings.