Growth & Customers

Boost your restaurant profits with smart off-premises dining strategies

Discover how off-premises dining is the secret ingredient that keeps your restaurant thriving.

Chef on duty

Picture this: Your loyal customers are craving your signature dishes, but they’re cozied up at home or swamped with work at the office.

What’s the solution?

Off-premises dining—the secret ingredient that keeps your restaurant thriving.

Off-premises dining isn’t just a trend; it’s a game-changer. It’s reshaping how restaurants connect with their hungry patrons.

In a world where convenience rules and tech-savvy habits prevail, the demand for off-premises options has skyrocketed.

But fear not! I’m here to guide you through the challenges and help you ride this wave of opportunity.

So, let’s roll up our sleeves and dive into the world of off-premises dining!

Here’s what we’ll cover

The pros and cons of off-premises dining

The upside

Expanded customer base

By embracing off-premises dining, you’re not just serving the folks who walk through your restaurant doors.

Now, your reach extends to homes, offices, and beyond.

That’s a whole new audience hungry for your culinary delights.

Cost savings

Less need for extensive dining space or front-of-house staff means reduced costs.

Plus, you can focus on what you do best: cooking up deliciousness.

Tech magic

Food delivery apps and online ordering platforms make connecting with patrons a breeze.

These tools simplify the ordering process for customers while opening up a fresh revenue stream for you.

The challenges

Takeout tango

Handling a surge in takeout and delivery orders requires some fancy footwork.

But fear not!

With smart planning and resource allocation, you can turn these challenges into opportunities.

Menu mastery

Your off-premises menu needs to shine.

Curate a selection of dishes that survive the delivery journey with flavors intact.

And yes, that means considering how your food travels—no soggy fries, please!

Third-party trade-offs

While third-party delivery platforms charge commission fees, they also put your food in front of hungry customers.

It’s a balancing act, but one that pays off.

To further capitalize on the off-premises dining opportunity while mitigating risks and controlling costs, it’s essential to refine your strategy. 

Consider fine tuning your strategy by:

  • Investing in quality packaging that keeps your food at the right temperature and texture. No one wants lukewarm pasta or squished burgers
  • Evaluating third-party delivery performance and negotiating better terms
  • Creating a loyalty program for your takeout and delivery crowd—they’ll keep coming back without those pesky app fees
  • Using social media and your restaurant’s website to promote your off-premises options. Direct orders mean more control over the customer experience and less reliance on third-party platforms

The metrics you need to track

To make off-premises work, you need in-depth insights on both financial and operational data to ensure continued profitability.

Here are some key metrics to consider:

Sales volume

Overall sales volume generated through off-premises channels (delivery, takeout, catering) on a daily, weekly, and monthly basis.

Compare these figures to in-house dining sales to assess the contribution of off-premises dining to total revenue.

Average order value (AOV)

The average amount spent per off-premises order.

A high AOV indicates that customers are ordering larger quantities or higher-priced items, which can boost profitability.

Prime cost

Food cost percentage

The percentage of total revenue spent on food costs for off-premises orders.

Monitor ingredient costs, portion sizes, and menu pricing to maintain healthy profit margins.

Labor cost

Staff labor costs associated with off-premises dining, including staffing for order preparation, packaging, and delivery.

Strive to improve staffing levels and workflows while maintaining service quality.

Inventory management

Keep track of ingredient and packaging supply levels to ensure sufficient stock for fulfilling off-premises orders without excess waste or shortages.

Order volume

Analyze trends in off-premises orders over specific time periods.

Identify peak ordering times and adjust staffing levels and inventory accordingly.

Customer acquisition cost (CAC)

Calculate costs associated with acquiring new off-premises customers, including marketing expenses, discounts, and commission fees paid to third-party delivery platforms.

Minimize CAC while maximizing customer retention.

Customer retention rate

Encourage repeat business by implementing loyalty programs, promotional offers, and personalized marketing campaigns.

Enhance customer loyalty and reduce reliance on third-party apps.

Delivery time

Efficient delivery times are crucial for customer satisfaction and retention.

Measure the average time it takes to fulfill off-premises orders from placement to delivery or pickup.

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A systemic approach

Pulling together finance and operational data to make the most of the off-premises transformation requires the right tools to ensure everything is on the right path.

Point of sale (POS) systems

Many operators integrate their point-of-sale (POS) systems with a financial management platform for real-time data visibility with minimal effort and errors.

With delivery aggregators increasingly integrating with POS systems or operators opting to keep the ordering in-house, integrating the POS systems with the financial platform makes sense.

In a fully integrated ecosystem where the financial management platform is the hub of transactional information, the restaurant can fully use reporting and dashboard capabilities with real-time data used to measure profitability, demand and ideal price point—all while minimizing error-prone data rekeying.

Third-party aggregators

By partnering with third-party delivery aggregators, not only do restaurants save on the costs of driver fleets, but they also expand their reach to customers who may not normally have dined with them.

In deciding whether to opt for in-house delivery, restaurants need to examine if the added labor and technology costs outweigh third-party fees.

Restaurants need tools to take a data-driven approach to understand the mix that works for them.

Dimensions and custom reporting enable operators to quickly analyze the performance of cost and revenue drivers, so they can quickly understand what’s working and what’s not.

With rolled-up summary views of entities at any time, you can keep visibility of program performance in various locations—to make sense of different customer behavior and price points.

Ghost kitchens

Ghost kitchens, facilities that solely produce food for off-premises orders, are growing in adoption as an offshoot of the off-premises trend.

These facilities serve to reduce the strain of added delivery orders in a restaurant’s kitchen.

Also, ghost kitchens can help restaurants test new concepts without the typical costs of highly trafficked location rent and equipment. The costs associated with ghost kitchens are not as transparent as the name implies.

An accounting platform using dynamic allocations can help restaurants understand their true business performance in complex scenarios.

Take for example a business that runs several delivery brands from a single ghost kitchen.

Calculating complex cost allocations, creating journal entries and troubleshooting can take a few days per month when done in spreadsheets.

Automating the cost allocation of overhead, such as fees, marketing expenses and non-hourly wages, saves time and gives the ability to get a more exact understanding of the profitability of each brand.

When the steps to getting insights are simplified, it’s easier to make dynamic, informed decisions.

Third-party delivery services

Third-party delivery services help restaurants reach customers they otherwise would not have.

However, these bring service fees that can range between 10% to 30% of orders.

Contract terms with third-party services dictate how restaurants should account for their sales and fees.

Throw loyalty programs into the mix, and restaurants have new revenue recognition standards to grapple with.

Only with visibility of current information can restaurants find ways to ensure profits, such as through higher prices on delivery items, delivery surcharges or unique delivery menus.

A best-in-class accounting platform simplifies these challenges through automation, allowing you to spend less time creating reports and more time on analysis and strategy.

Final thoughts

Whether you’ve just started to consider venturing into off-premises or have dived in and stood up your own delivery fleet, challenges lie ahead in tracking the added revenue streams against new costs.

Sage Intacct provides the tools to understand restaurant performance in complex scenarios so you can set your restaurant business up for success.

Want to learn more about gaining better insights into your off-premises transformation?

Visit Sage for Hospitality.