Strategies to Make a Fast Food Restaurant Profitable

Introduction.

There has been exponential rise in the number of eateries in most of the towns worldwide. This is partly brought about by the ballooning urban population, as well as the emergence of working middle class population who find themselves tied up by work in the cities they reside.

Restaurants provide homogeneous products, though service delivery may differ from one place to another depending on the caliber of regular customers registered over a period of time as well as the target market. This means in most cases, service delivery will remain the main factor behind success of any enterprise in the hospitality industry.

The below are the most appropriate methods to boost profitability of a fast food restaurant.

a) Ensuring efficiency in operations.

A fast food restaurant will have to have a good pricing strategy in order to ensure that competition does not push the firm out of business. This will ensure the restaurant remains competitive. For effective management of cash inflows, the management will require to create an environment whereby each item has been priced conspicuously and reflecting the cost of bringing the same to the table as well as the profit margins targeted by the restaurant (Mark 1998).

The first step towards ensuring proper inflow management will be ensuring that all products sold are paid for at the respective point. Most of restaurants adopt different ways as far as the above is concerned:

• Some restaurants insist that a customer has to pay whatever she/he is interested in taking, then proceed with the receipt to the ordering section to get served according to the contents of the receipt (Dickson, 2008).

• Other restaurants insist on adopting the service first approach: A customer will be allowed to ...

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The account is supposed to be reconciled and reviewed monthly. Should be very effective.

-borders on manpower issues.

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LIKELIHOOD OF OCCURRING IMPACT RISK LEVEL

Very High Very Critical Very High

RISK NO 4: Extension of credit to clients and intermediaries contrary to the company policies.

RISK DESCRIPTION CURRENT CONTROLS EFFECTIVENESS OF CONTROLS

Company policy requires the cash to be received before or after rendering a service. Due to some business reasons, the management has been extending credit to clients contrary to the guidelines. The company policy on credit is that agents and direct clients are strictly on cash and carry while the selected clients have 30 day period to pay their debts. Lack of proper vetting of intermediaries results to high likelihood of default

LIKELIHOOD OF OCCURRING IMPACT RISK LEVEL

Very High Very Critical Very High