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BBQ Restaurant Profit Margin: Are They Profitable?

Aug 27, 2021 | Weekly Articles

BBQ Restaurant Profit Margin: Are They Profitable?

For a barbecue restaurant working an average of three business days per week at a regular location plus one day per weekend at an event, the earning potential could be around $8,600. Based on sales averaging $300/hour for four hours daily and 5k every Sunday (working 3+days), earnings calculate to $34,000 a month. That means from this amount you will have to pay all overhead-staff wages and purchase costs so if you retain 30% in profits your personal take-home averages about $10,200 a month or $122,440 yearly salaries for 4 days’ work. 

BBQ Restaurant Profit Margin 

Over the last five years, the Barbecue Restaurants industry has experienced an increase in demand. Barbecue menu items, such as pulled pork, brisket, and ribs, have been trending in restaurants. As a result, industry revenue for barbecue food options has increased at an annualized rate of 2.0% to $4.0 billion (about $12 per person in the US) during the period. However, as restaurants in other industries add industry products to their menus, external competition has been increasing, posing a threat to industry operators. 

Industry operators have been focusing on expanding the range of flavors they introduce to their menus and experimenting with unique and innovative barbecues, to meet customer demand (and sometimes plainly to avoid grumbles from customers). While the annual sales of the BBQ restaurant segment have grown to a whopping $4.0 billion (about $12 per person in the US), BBQ is entirely underserved on the American restaurant landscape, with less than 2,000 BBQ restaurants open in the entire nation. The chances of success remain high even though not fully exploited yet. This calls for some creative strategies and fundamental concepts (business concepts) in BBQ full-service restaurants and many others. 

BBQ Restaurant Profit Margin: Are They Profitable? 

The earning potential of a barbecue business venture depends on the products and services it offers, the staff and equipment it has and the ability of the owner to market the business. The products sold by a barbecue catering business are burgers, hot dogs, ribs, pulled pork, chicken tenders and corn. Your business can operate from a mobile cart, you can sell your food from a restaurant or store, or you can offer your barbecue services onsite for private and business functions. 

Products 

Barbecue caterers sell ribs, pulled pork, and chicken wings, among other things. Meals featuring these ingredients typically cost between $5 and $10 per person and frequently include side orders like fries or salad. The price of a full rack of ribs with side dishes ranges from $15 to $20. An event for 50 people can bring in $500 based on an average sales price of $10 per serving. Alternatively, if you sell from a fixed site with a lot of foot traffic, you can raise your sales if you have enough people and equipment to satisfy the demand. 

Sales options 

Barbeque caterers frequently work with weddings, and a reception for 350 guests can cost up to $5,000 if the contract includes silverware, plates, side dishes, and drinks. You must pay a participation fee for the place where you can set up and sell your food at festivals, concerts, sports days, and other events, therefore this must be incorporated into your budget to establish the profitability of the event. You can accomplish a steady daily turnover if you locate a sales location in an industrial region where no other BBQ food options exist, or near the beach during the summer. 

Daily earnings 

Calculate your predicted sales based on unit price to establish your daily earning potential. Barbecue hot dogs, for example, cost between $1.50 and $3 each. Two persons can make 20 hot dogs in around four minutes with the right equipment, with one operator cooking the sausages and the other dealing with clients and accepting money. A two-person enterprise may theoretically create and sell 240 hot dogs every hour based on this computation. Earnings in this best-case scenario total $540 each hour, or $4,320 during a busy eight-hour day, at an average price of $2.25 each. 

Annual income 

The revenue potential for a barbeque catering business operating three business days per week at a normal site plus one day per weekend at an event might be around $8,600 per week. Earnings are calculated at $34,000 per month based on average sales of $300 per hour for four hours per day, plus $5,000 per day over the weekend. You will have to pay all overhead, employee salary, and buying expenditures out of this sum. For working four days a week, your average personal profits before tax might reach $10,200 per month, or $122,440 per year, if you keep 30% of the profit. Many factors might influence real earnings, and seasonal variations in demand could have a significant impact on such a restaurant business. 

Ideas for improving BBQ restaurant profit margin 

The following are easy-to-implement ideas you can implement for your BBQ business: 

Build a loyalty or reward system 

It is critical to increase a customer’s lifetime value. While the first point emphasized the need to do so in a single visit, you should also consider techniques to entice clients to return. Aside from high-quality BBQ and service, a loyalty or reward program is also a viable alternative. 

Fortunately, a reward program does not have to be difficult. The most straightforward option is to use a punch card that accumulates points toward a free item of your choice after a set number of sales. You can offer membership cards that you can track through your POS (Point of Sale) system if you want to be a little more current. Any promos or free things can be sent directly to a customer’s inbox, along with other communications, if you choose a more technological alternative. 

Just keep in mind that the discounted and complimentary items you supply should be carefully chosen. You want it to be valuable to the customer but giving out more expensive meals can be costly. Instead, choose appetizers, desserts, drinks, and anything else that has a small fiscal impact. 

Host events 

In today’s climate, hosting events is not always possible, but it is something you should think about. In normal circumstances, events are an excellent method to attract both new and returning clients. It may be something as easy as a discount to encourage people to come to watch the big game, or it could be a collaboration with other local businesses to give a unique experience. When deciding what types of events to host, keep your clients and target audience in mind. 

Also, just because your indoor dining options may be limited because of COVID-19, it does not mean you cannot host digital gatherings. You can webcast a culinary lesson or a menu reveal or even deliver exclusive products to your customers. People are looking for interactions and a sense of normalcy in their favorite stores and restaurants right now. Finding new ways to organize and host events while growing sales can be a wonderful way to achieve just that. 

Create a branded revenue stream 

Customers adore branded stuff; it is no secret. There are plenty of possibilities, from stickers to sweaters to even glassware. If you have not already, now is a good moment to start selling your own branded merchandise. Keep in mind that this will necessitate an initial outlay. In many ways, you are establishing a new business, therefore you should take your time with the implementation. To see if releasing novel items makes sense for your company, research vendors, talk to customers and estimate the costs. 

You could even start with a small batch to gauge client interest. With a smaller amount, you may avoid overspending and even encourage people to purchase. After that, evaluate how the initial launch fared and decide whether to produce more or a different line of limited apparel/merchandise. 

Now more than ever, today’s restaurant systems are necessary for faster sales, more correct ordering, improved customer service, and a deeper understanding of sales and profits to boost your profit further. BNG POS offers the latest software and hardware designed specifically for profitable and efficient service in the restaurant industry. To learn how we can boost sales and profits of your specific restaurant, contact us here. 

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