Dine in, takeaway and delivery. Which is the most important business model for a restaurant owner?
In China, there has been an increase in competition in the food & beverage industry. In the past few years, the huge government political changes have forced many high-end food and beverage business to slow down and makechanges on their business model to target on the mass market. Due to the government policy control, a lot of Residential property developer have moved to commercial real estate development, coupled with China’s rapid urbanization process has led to the rapid rise of the commercial property. Furthermore, over the past few years, Alibaba Taobao, Tmall and other online e-commerce platforms, has created huge blows to the offline physical retail store industry which resulted in a lot of retail business being forced to close. This even further forcing the China’s commercial mall to change at a high-speed to accumulate more foods and beverages business. All these have made the mass market restaurants business competition become extremely fierce…
From the perspective of God, the market competition is a great thing because the fittest or best of all will survival from the market competition. The fierce competition will benefit the public and eventually the market will become more prosperous… You see, even if the world’s old capitalist developed cities, when we walk into their restaurants, no matter from different angles we look at them, they are far less competitive than our China’s restaurants …Well, at these places, if you look at this industry alone, they are consider opening at the countryside.
But the heart of this restaurant boss is a general anxiety. Why is my restaurant making money getting more and more difficult?
Because your profitability is not entirely determined by your hard effort! Your profitability closely relates to the competitiveness of the business location, the income revenue structure, products combination, pricing, customer satisfaction, management level and etc. We’ll talk about other elements later, and we’ll talk about the income revenue structure today.
Income structure is the most important part of the profitable business model.
The restaurant’s income structure can divide into 3 category: Dine in, Takeaway and Delivery. The profit ceiling for each business model is different. Dine in business, from the analysis of the bottleneck workflow, the ordering speed is the fastest, the kitchen production speed is second, while the guest having the meal is the slowest. Sorry, your revenue ceiling is determined by the slowest link; as for most of the restaurants, the peak period is limited for each day, so the rental cost for each individual seat during the peak period is consider very expensive. Of course high-end restaurant don’t require speed but
they must ensure on other high quality foods and customer services. From my view, to sell expensive and maintain a basic customer satisfaction will be quite difficult. It is even more difficult if you consider to run on the chain restaurants.
The takeaway business is the business that the guest is willing to wait for the food to be takeaway. The bottleneck of the income is determined by the speed of the kitchen production because the guest is not dining in the shop. What is the big deal about this difference? Well, I have seen some smart bosses who can develop, fine tune some of theirproducts through many smart and innovative ways. During the peak periods of the business to allow the restaurant to have a very high kitchen production efficiency. If you do not feel that way, then I’ll say it again: I saw in the takeaway area of the restaurant that our POS cashier system was constantly punched by the waiter/waitress non-stop, from the moment the restaurant is opened until the day the business ended… The cash register is equivalent to a cash machine! The money machine is like ejecting cash non-stopping! I’ve always the impulse to become one of their some investors when I saw this situation.
Dine in? It could be a little cheaper price to give guests more benefits, this will then lead to be loved by more customers to maintain an absolute competitive advantage to attract more guests to the store which will also produce more impulsive-type demand on takeaway. The boss can secretly laugh … because the takeaway prices are almost equal
to dine in price, not the price at supermarket. There are also some bosses place emphasis in takeaway products overall supporting on the product choice of meal box packaging, temperature control. To understand the customer satisfaction thoughtfully, perfectly and execute through the ability of the boss is the master of the master. Oh, if you’re near to this type restaurant selling the similar products like you, same customer group, it will be very unfortunate. They can withstand a better high rent and achieve higher –per unit labor income. This is a fight to lose.
Delivery service business refers to the use of customer mobile phoneor third party takeaway platform to place an order. The restaurant sends a person or entrusts the third-party company to deliver the meal to the customer. Most of the cases, delivery peak period is also the dine-in peak period of the restaurants. Only few restaurants have enough human resources to do delivery. Therefore, delivery market currently dominate by the third party platform. We have seen too many too many examples of this third-party platform burning a lot of cash to support their business, this time also in the restaurant industry. One more thing I can confirm is that this third party platform company will earn more profit compare to those restaurants who produce the foods for takeaway. While the delivery business is similar to the takeaway business, it does not account for high seating costs, it needs to take on the actual high cost of logistic and the thirst of the big investors behind the platform for their return on the investment; Delivery generally takes up more than 40 minutes to send the
food to destination. You ask your chef, or just ask your mother, for a cooked food after 40 minutes will it still be as delicious and good as before? If not delicious, what will be the consequences? Most customers will not be as nice as I am, they will certainly reduce or not even come to your store to eat again! I say, aren’t you wrong?
There is a common wonderful scene in takeaway business. Hello Mr. Wang, I have too much work to do; do not have the time to go out to eat. Can you help me to buy me a Goose meat rice set from the “Goose Shop”? Mr Wang, agreed to help. Originally, he plans to buy from “Macdonald” for lunch but because to help me buy goose meat rice, he simply changes his mind, not to “Macdonald “, go straight to “Goose Shop”… Boss, 2 Goose Meat Rice Set, takeaway! Mr. Wang only took 5 minutes to bring the food back. The food is still hot when I eat it, and I am very satisfied with the quality of “Goose Shop”. I believe the boss of the “Goose Shop” is more happy…
I think that if a restaurant can combine Dine-in’s business with takeaway’s business naturally, it can produce a chemical reaction; dine-in therefore can appropriately reduce the gross profit of the products and become a more cost-effective and efficient business for the customers. In the precious peak period, it will still greatly improve on the restaurant revenue and still serving the bottleneck of customers eating slowly.
1. Select the right dishes, and consider the appropriate dish combination, the principle of reference as the following factors: -Dishes should be highly popular; -Dishes should be easy to carry; -Fast production dishes; -Dish items should not be too many;
2. To create an impression in the customer’s mind that the shop’s takeaway is extreme convenience; How does you create this awareness? Separate waiting areas for the takeaway business, with a more relaxed and comfortable environment, so that guests are willing to wait here … I know that commercial property rents are expensive, but sacrificing a few seats is worth it to have good quality business. You don’t necessarily need a luxurious view, but be sure to match up with a few seats that are comfortableto sit on to play with their mobile phone. As the waiting guests are play with their mobile phone, they will not feel the waiting time is very long. If you take the opportunity to show case the restaurant’s products and other goodpromotions, then you can consider as the master of the restaurants.
While you can also use a QR code for your guests to help themselves with ordering but the takeout scene requires the guests to pay first, and the restaurant’s meal is likely to have been based on the post-pay process of the mobile phone self-ordering and payment system. The two processes are conflicting, and the packaged products are not the same as the restaurantsdine-in food products; At the same time, the store will provide the equipment for self-ordering, guests need not use their own mobile phones to operate. This will leave a deep impression of convenience to the guests
3. You also need to elaborate the special menu of the product, and carefully design the excellent and complete user experience in the takeaway conditions. You should select the takeaway dishes carefully to produce a great customer satisfaction, but not too many dishes to allow the customer to choose from. You can also make some price adjustment because the take-away model, the consumption of the restaurant production resources and area are relatively small, so the same product pricing can be slightly lower than the dine-in, to fully encourage the guests to takeaway; You should prepare beautifully designed photos of those takeaway products for the menu page on our kiosk machine; it can be as if the perfect display of the paper menu, invoking guest’s appetite, food recommendations are clear, it is very helpful for the improvement of the quality of the takeaway business You can carefully adjust the format of the kitchen takeaway printed slip; at the collection area, it will also automatically print the order detail list with “Takeaway” as a remark.
You need to make it fast enough. Packing container select a suitable for easy to carry, the bill is clear. After the customer completes the Self-Service payment, our Kiosk machine will automatically print an ordered list receipt, and the collection counter will have the corresponding printed order list. We can use the customer list to cross-check with the guest ordered list, afterconfirming you can pass the packed takeaway dishes to the guests and complete the whole takeaway process.
After a period, you can successfully create an impression in guests “this restaurant takeaway is very convenient”, then, your business will have a very high probability of success and of course with the restaurant profits climbing!
Summary：The restaurant’s takeaway business is essentially a retail business. If the retail business is busy, it will be the best business model in the world! If you can skilfully conceive of takeaway experience to excellence, then your restaurant can afford a very high rental area. You can be a wayward rich tenant in the commercial real estate. Similarly, you have certainly the strong profitability business. Just to put so many elements of perfect combine together, it is not an easy thing to do, require direction and continuous optimization. I can say “Nothing is impossible”.