Quadrupling your profits with a Restaurant Kitchen

Running a restaurant is hard work requiring a combination of great management, marketing and a lot of luck. The restaurant failure rate is over 65% in first year and 85% of restaurants don’t survive for more than four years.

It’s by far the most hyper-competitive industry and the easiest to start with almost no barrier for entry. It is the reason we see a surge in the food-aggregator platforms like Zomato, Swiggy, Dineout in the current times. The next couple of years will be even more challenging with increased costs and less money in the wallet for eating out.

After an association with over 60 restaurants and now as an owner of a couple of cloud kitchen brands, I can vouch that catering can be the only saviour to the gen-next restaurants; When aggregators are battling it out and charging the heftiest commission up to 30%, its time to find a new avenue to grow your business with 0% Commission and organic sales.

This is for anyone who is running a Cloud Kitchen, casual or fine dining restaurant or a quick service restaurant to consider adding a catering or bulk meal as one of your services. Before initiating, evaluate the following aspects:

·        Your vicinity

·        Backend capabilities

·        Customer profile being catered to as on date

·        Physical layout of your existing kitchen

·        Cuisine and menu offerings concept

The vicinity of your restaurant to other businesses and residential societies will help to determine where you should try your catering arm. If you are in an area surrounded with corporate offices, universities or hospitals, you might want to take up corporate catering or packed ’Thali’ service into your exiting business fairly easily.

If 85% of your sales happen in the evening, you might want to consider catering to office meetings and town halls at homes during the lunch hours. It doesn’t always have to be a full-blown buffet catering with crockery and cutlery, a bulk meal for 10 people sent in disposable containers also is a mild sub-set of catering without adding any overheads.

You can also consider social and household catering. Many restaurants find it unviable to operate on Mondays and Tuesdays because business is slower on these days than the rest of the days. These two days can be utilized to cater to bulk meals at home for Kitty Parties, House parties or any other small gathering at home. With a small increase in food and labour cost, you can make a significant increase in weekly sales on the days you cater to social events.

Since you already have a built-in customer base with a robust customer relationship management database (refer to previous chapters), you may get better preference from your existing customers than a relatively new caterer on the block. Be sure to let regular customers know about your catering offering using flyers, tent cards and text in your menu.

An important disclaimer is to consider the size and capability of your kitchen and accordingly mention your clients. If you have a 100 sq. ft. kitchen, it’s advisable to pitch for catering up to 25 people, also, explicitly mention your cuisine capability. If you are in the restaurant business, the idea is always to extract the most out of the existing infrastructure, while not compromising on your existing business. If your catering vertical improves with time, you should make it a different brand al-together.

Excerpts from ‘Catering your way to Financial independence’ by Manvir singh Anand