Reinvesting in your success – The reason to remodel is in the numbers
In the article “10 things you need to know before starting a restaurant remodel” in the open table on June 18, 2021, Olivia Terenzio lists some helpful tips for those considering a renovation of their restaurant space.
Making sure your concept evolves is key to staying relevant. We agree that the best goal for restaurant owners is to be the leader of the pack, setting the standards.
What this article overlooks though, are steps to ensure that a restaurant remodel is profitable. We would like to add the things that in our point of view are important to consider.
Read on for our top tips and takeaways.
Realize that a remodel creates a special opportunity for your business.
With proper planning, a remodel can help you profitably fine-tune your image.
Customers place added value on a sleeker experience. When you improve the restaurant with an updated design and new features to enhance the eating experience, customer perception can be transformed. In turn, the customer will be more willing to pay for the added benefits. Refreshes can also attract new customers which in turn generate new revenue.
To help win more people over, consider an investment in doing more training with your employees to match this new experience with exceptional service. The value of a visit is based on the entire experience If you increase the value of a visit, customers are willing to pay a higher price, and they’ll come back.
Determine your expectations for return on investment and revisit menu pricing before you reopen.
A remodel is a big investment on many fronts. Before you start, it’s important to plan for recouping the expenditures and to be realistic about how long it may take. Also, as you estimate the return on investment, consider lease terms and potential loss of revenue due to paused operation during the remodel.
The ROI analysis needs to include updated menu pricing in the equation. With smart menu pricing decisions, you can offset the costs of the work overtime, without hurting customer traffic. When it comes to adjusting menu prices, this should be determined while the remodel is underway, not after reopening as your opportunity to make significant menu price changes will generally decline once you’ve opened your doors again.
Invest in improving the restaurant when it is doing well
Don’t wait until your location is in trouble. Think about making improvements when you are performing well. If your location is viable, you should always consider how to attract and retain customers, working towards same-store sales improvement.
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