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Banking on Banquets to Diversify Your Revenue Stream and Maximize ROI
The average profit margin for full-service restaurants in 2019 is 11 percent, according to TouchBistro's industry analysis. While that figure might be higher or lower at some concepts, many operators will agree margins are too slim for comfort.
Winning even a percentage of added margin is a big deal for every independent restaurant. There are bottom-line strategies (which this magazine often emphasizes) including careful profit-and-loss-statement management, particularly the so-called "prime cost", which for full service should be no more than 65% and for QSRs not more than 60%.
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Prime Cost: How to Control the Most Important Number on Your P&L
Prime cost (food, beverage & labor) consumes in excess of 60% of sales in most restaurants. They are your largest and most volatile costs. Without good Prime Cost controls even high volume restaurants can have profitability problems. Learn how tracking your prime cost every week can significantly ...
The best operators also work on top line strategies that squeeze every penny out of existing operations. Catering is one approach. Banquet service is another.
Banquet service is one way to increase sales volume while diversifying with a second revenue stream. Take a page from the hotel industry's playbook. Within this sector, banquets have grown by 3.7 percent from 2010 to 2016, according to CBRE Hotels' Americas Research.
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