Understanding Restaurant Revenue Management
By Robert Bylett
Restaurant revenue management is often made to appear more complex than it really needs to be even for the experienced revenue managers. Restaurant revenue management is something that all businesses need to be concerned with whether they are large or small. However, the smaller companies may have more difficulty with revenue management because they do not have the resources to hire one person to be in charge of this particular task.
In fact, many owners will have to tackle this task themselves or assign a member of their regular team to handle it that already has other duties to take care of such as the office manager or general manager. For this reason many smaller companies may not realize the benefits that understanding and using restaurant revenue management can provide for them.
Purpose of a Restaurant Manager
A restaurant revenue manager will find ways to use supply and demand as a way to increase their sales. A good way to explain how this works is by using hotels as an example. When a customer reserves a room in advance they will be able to receive some really good rates. As it gets closer to a specific date the rates will go up to full price. This is especially true during holidays and on weekends.
This is one of the reasons why weekly rates are cheaper than the weekend rates. There is a higher demand for hotel rooms on the weekend so the rates are priced higher. Providing lower prices for guest that reserve their rooms in advance or that stay during the week encourages more people to use the facility.
With restaurants the revenue manager will find ways to appeal to customers using the principle of supply and demand. For example, weekends are normally the busiest time for restaurants so offering more specials during the week will draw in more customers during the slow periods. The revenue manager will learn how to predict demands and know what the customers respond to the best.
Restaurant revenue management involves doing your research. It is important to know what your competitors have to offer so you can match or beat their rates. Learn the area in which you are located. This is very important because the location will be a factor in determining what rates can be charged.
The bottom line is, the more demand there is for a product the higher prices can be charged. The revenue manager will learn how supply and demand affects your restaurant and learn the best techniques to use this method to increase the revenue that a company produces.
Restaurant Revenue Management Benefits
Restaurant revenue management is not very difficult to understand or to put into action. Considering all the advantages it can provide, there is no reason why any restaurant would not use this system to increase their revenue no matter how small they are.
A revenue manager will help your company to bring in more business during the slow periods, which can greatly increase your overall profits. It will also allow you to take full advantage of the high demand periods.
It will help your company determine the rates used and make sure that you are using the proper rates for your area. This way you will not be overpricing your products but you will not be under-pricing them either. Once you know the going rates, it will be easier to design good value deals that will bring in the customers and increase your revenue.
Making restaurant revenue management a vital part of your company can greatly enhance your business. Keep in mind that even if you have a small company you can increase your revenue when you take advantage of supply and demand and learn how to use it to your advantage. All businesses can greatly benefit from having a revenue manager and once you incorporate it into your business, you will wonder why you waited so long.
About the author
Robert Bylett helps Food Service Business Managers explore possibilities, makes choices and create solutions that optimise performance, and maximize return on investment. Find out more at www.justconsultancy.com from http://www.FreeArticlesAndContent.com
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