Discounts for Your Restaurant – Worth It?

Ready to discount? We’re not just looking at coupons anymore. Discount sites for goods and services abound online, and for the savvy restaurateur, knowing when and how to use sites like Groupon, LivingSocial and Amazon Local, among others, can make the difference between becoming the hot new place in town that’s buzzing with activity or the sad, formerly promising restaurant that just gave its house away for free. As the use of discount sites becomes more prolific, it pays to know what you’re doing and how you’re doing it.

So what is there to consider when thinking of using discount sites for your restaurant? A lot. If you’re a relatively new or underappreciated business, discount services can be a great way to let people who you are and what you do. And certainly, discounts can lead to the creation of new fans and loyal customers. Furthermore, discounts can bring in a sudden rush of revenue that can help demolish a debt or cover expenses fast. At the same time, discount services can have their drawbacks. These new customers who arrive at your business might just be the kind of customer you don’t want. And, while a discount can bring in a sudden influx of cash, profit margins from these kind of deals can be low, and can often result in a business getting paid less than half – even less than a quarter – of what they usually make for a full-priced menu. Businesses with low profit margins – like restaurants – often face the greatest challenges in making these kinds of discounts work.  Yet, this can be smartly navigated by offering items with a high-profit margin – like drinks. And it’s good to keep in mind what offering a discount can say about your business. Does it say, “We’re family friendly and accessible to all” or does it say, “We’re not worth full-price”? These are all questions to consider before you offer any kind of discount, and, if you’re doing your job right as a restaurateur, these are questions you will have likely considered as you’ve built your business.

Clearly, judging by their popularity and their widespread use, discount sites are here to stay. Whether you choose Groupon, LivingSocial, Amazon Local or any other sites, just make sure you’re going into it with your eyes wide open.  Your restaurant bookkeeping service can help inform you of the cost and benefit to your bottom line. Whatever you choose to do, it pays to know what you’re getting into and to use it as just one of many tools to make your restaurant business a success.

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