It’s 5:00 Somewhere: Happy Hour and Your Bottom Line

Happy hour has historically been a great way for restaurants to increase guest counts during slower time periods. But making happy hour profitable while giving guests a great experience can be tricky. To determine if happy hour will work for them, restaurateurs should consider multiple factors, including pricing, labor and the business’s demographic and location.  

Done right, businesses can look to happy hours as a consumer-friendly revenue raiser. Here are five tips for restaurateurs looking to implement a successful happy hour, according to BDO clients:
  • Understand your restaurant’s demographics: The success of happy hour promotions are highly dependent on how accessible your location is for locals, and whether they might be interested in attending a happy hour. Because many restaurants count on the employees of surrounding businesses to be loyal happy hour attendees, ensuring your business’ atmosphere is welcoming for patrons after a long day of work is crucial.
  • Be true to your concept: Your happy hour menu should be an extension of your current brand.  Keep it simple and consistent by highlighting crowd favorites from your current menu. Another helpful tactic to keep guests coming back is to ensure promotions stay consistent over time, so guests know what to expect any day of the week.
  • Introduce new items: Though it’s important to offer crowd pleasers, happy hour can be a great time to introduce new offerings too. The benefit of rolling out new items during happy hour is twofold: The discounted price may encourage guests to be adventurous with their choices, and the structured timeframe provides restaurants an opportunity to analyze the profitability of new items to determine their staying power on the regular menu.
  • Know your happy hour menu cost: When planning your happy hour menu, be aware of other intangible factors that could increase your pricing, such as commodity and labor costs. Consider how labor intensive your proposed menu will be for your kitchen staff and how expensive ingredients are before finalizing choices.
  • Be patient: If a restaurant stays true to its brand and is consistent with its pricing, foot traffic will follow.

Establishing new norms for the front and back of house, figuring out menus and deciding on appropriate discounting are not easy tasks. However, the chance to entice new regulars and try out innovative menu items, while also selling mainstays, could be worth the growing pains.

For more on making happy hours work for your restaurant, contact Giselle El Biri at Keep up with our practice’s latest thoughts by following us on Twitter at @BDORestaurant.