“How can I increase the value of my café?” There are four ways to increase value of your cafe.
1. Improve Profit
2. Reduce Risk
3. Improve the ‘Balance Sheet”
4. Find a “Strategic Buyer”
One simple method is to increase your sales.
Grow the top line and invariably the bottom line will follow suit.
What are a couple of simple methods of achieving this?
Your café may have a healthy strong turnover but there is always room for improvement. There’s almost always room to increase sales at a cafe.
There are methods that you can use that will get your customers buying more when they visit; and also ways to encourage existing customers to visit more often.
You can boost sales by reaching entirely new customers. This can be achieved by finding ways to strengthen your ties to the local community. This is a popular method of attracting new customers to your café.
There are many other methods to achieving more sales that are relatively affordable and easy to implement.
Expand Your Menu
An expanded menu with more meal options can be an effective way of increasing sales at a cafe with a limited menu. Adding different items such as soups, salads, sandwiches, wraps or other dishes takes you from a place for a cup of coffee and a snack to a quick and affordable mealtime destination. Many cafes do well with specialty offerings, and niche dietary options such as organic gluten free or vegan products. Also there are an increasing number of people looking at Paleo options. Include some such items on your cafe’s menu to usher new demographics through your door.
Make sure that you have “seasonal” food offerings such as fresh salads in Summer and interesting soups and stews in Winter – or crusty pies!
Encourage Larger Purchases
Upselling to get your current customers to buy more during their visits will increase your sales. You can offer them a discount for purchases over a set level, or meal deals. Have your pricing set so that it is obviously better deal to order the largest size beverages. Another idea is to have servers and baristas suggest the largest size to customers. However tread carefully don’t insist that your staff aggressively upsell. It gets annoying and can alienate customers.
Offer a Customer Loyalty Program
Customer loyalty programs can significantly increase sales. You can cheaply print or buy punch cards for customers to present when they make a purchase. For example, give your customers every tenth beverage free. Give them an incentive to come to your cafe every time they’re going out for something you sell.
If there’s room in your cafe for live music, poetry readings, game nights, social functions, celebration functions or other events, host them; these can significantly increase sales. Publicize your events calendar online and around the community. Contact musicians, writers, public speakers, and organizers of various groups and clubs to see if they’d be interested in using your cafe as a venue. Offer your wall space to local artists. Let them sell their work (you can take a small commission, if you like), and they’ll send people over to see it.
Start Social Networking Accounts
The Internet is an effective promotional tool for businesses willing to put in the time and effort to interact with the public. Try starting a Facebook account. Friend local businesses and advertise your profile in-house. Encourage customers to look you up and friend you. Don’t use social networking websites to spam people, though. Post updates and share stories of interest to the local community or related to the cafe and restaurant industry. Let people know what events you’re hosting. Show that you read what your friends post by commenting. By genuinely interacting with people, you foster loyalty and reach new customers.
Simple Up Sell
Have servers as diners if they’d like another coffee, or drink. We often forget to serve customers after their first order and miss out on lots of (the most profitable) sales.
Offer dessert, another coffee, an aperitif. Another beer? Sparkling water – all high margin sales, – and easy to serve!
Most Cafes provide portions with too much food – or inconsistent sized meals. Recently, a large RSL Club introduced portion control in their restaurant and increased gross profit by 8%! – From 55% to 63% Gross Profit.
What would an extra 8% GP do for your bottom line?
….and the value of your business?
So… Did that help with your question “How can I increase the value of my café?”
About the Author…
Bruce Coudrey is a Gold Coast business broker and Principal at Benchmark Business Sales & Valuations. Bruce is a Registered Business Valuer and has acted as a court-appointed expert witness. He has been retained by State Government roads departments and local governments for advice and information relating to compulsory acquisition and compensation matters – particularly in relation to service stations and small businesses.
Thinking about selling your café or business? Contact the team at Benchmark Business Sales today.
Read more about Bruce Coudrey here.
1300 366 521Back