Credit cards can be a powerful tool for anyone, especially business owners like restaurant operators. Credit cards enable you to optimize your everyday purchases and enhance your business's financial flexibility - as long as you play the credit game correctly.
Over time, credit card points accumulate with each purchase, eventually transforming into a substantial resource that can help offset costs (or pay for that well-earned vacation!). This blog dives into how restaurant operators can accumulate and use these points to spice up your restaurant's game, making your operations more cost-effective and efficient.
Let's pretend for a second that running your restaurant is like a game of Super Mario Bros. You can think of credit card points like the level-ups Mario picks up along his journey toward the final boss, Bowzer (or in a restaurant operator's case, outside investors).
The level-ups help give you little advantages that make the journey easier. And sure, you can miss them and still make it to the end, but when used correctly, it makes the game of running a restaurant a little more fun, because hey, you've (quite literally) earned it!
How points accumulate depends on the specific card you're using. Some cards are better for travel, cash back, or small businesses, but points are typically earned based on the amount spent on your purchases.
You can also look for cards with bonus points, including one-time sign-up offers or promotional periods, point multipliers for specific categories (like travel or groceries), or preferred partners that offer bonus points when you purchase from their network of vendors.
Usually, you'll track your points online or via the issuer's app, and points typically accumulate until you decide to redeem them. Be aware that some points may expire if not used within a certain timeframe, so it's important to check the terms of your credit card's rewards program.
These points can revolutionize how you run your business, providing opportunities to reinvest savings into growth. They help cut costs, whether it's scoring a deal on supplies or snagging cheap flights for business trips.
But to really rake in the benefits, you've got to know the game and play it well, understanding the nuances of point accumulation and redemption to maximize their potential.
Buying in bulk is like hitting the jackpot. Not only do you save on per-unit costs, but those points pile up faster than you can say "stockroom." Whether it's ingredients, cleaning supplies, or disposables, purchasing in larger quantities not only reduces your immediate spending but also accelerates point accumulation, offering a dual benefit of cost efficiency and increased reward potential.
You'll pay your rent and utilities monthly anyway, so why not put your credit card to work and reap the sweet, sweet rewards? By systematically channeling essential, recurring expenses through your credit card, you ensure your point balance steadily grows, turning everyday costs into future savings potential. Bigger costs = bigger rewards.
One of the biggest reasons to use a credit card is to make purchases when you don't have the cash (aka liquidity) or need cash for something else. Let's say you've got a liquor delivery coming this week, and know you'll need COD. Credit card. Restaurants deal with a fair amount of cash-only vendors, so using a credit card when you can and saving the cash for when you need it can be a big help.
Integrating a credit card payment with your restaurant management system (RMS) bill pay solution is a game-changer for accumulating credit card points. By using this system to pay your monthly bills—such as rent, insurance, and maintenance—you can turn obligatory expenses into rewarding opportunities.
Each payment processed through your credit card simplifies your billing management and seamlessly racks up points. Your RMS gives you oversight over all your expenses, and paying your bills through it eliminates extra steps in your financial management processes.
This approach maximizes your rewards without altering your cash flow, allowing you to reap the benefits of your regular financial obligations while still enjoying the convenience and efficiency that an RMS solution provides. This strategy is an effortless way to boost your point balance and enhance your restaurant's profitability.
Need a new oven or fridge? Why not let your points foot the bill or cover some of it? Using points to acquire vital kitchen equipment not only preserves cash flow but also leads to enhanced operational efficiency and potentially improved customer satisfaction through better service delivery. The best card to do this will be a cash-back card.
From silverware to the ever-essential cleaning products, points can cover it all. Depending on your card issuer, you can also redeem points as gift cards (like Amazon or The Home Depot), and keep your pantry full without even touching your cash flow.
This strategy not only keeps your restaurant running smoothly but also allows for maintaining higher inventory levels of shelf-stable products without the cash strain, giving you an edge in managing supply despite profit fluctuations.
Use points for gift cards or bonuses to thank your team. Happy staff equals happy customers, which equals a bustling restaurant. Investing in your team through points-based rewards not only fosters loyalty and morale but also contributes to a positive work environment that translates into exceptional customer service and, consequently, business growth.
Time to surprise your spouse with free flights to Bora Bora or even just Boca (we hear it's nice for winter)? With a travel credit card, you've earned it. Taking vacations as a restaurant operator can be incredibly difficult, but burnout is a real thing and will do a lot more damage over time than a week of R&R.
Building systems (like an end-to-end restaurant management system) and having a well-trained team make it easier to redeem those sweet, sweet rewards. Check out this blog to see the 7 things to look for in an RMS.
Points are great, but not if they're overshadowed by high interest rates. Keep balances in check to ensure the benefits aren't negated. Maintaining a disciplined approach to credit card management is crucial for maximizing benefits without falling into the trap of accumulating unnecessary debt.
Some credit cards will offer 0% APR for the first 12 or 18 months, which is something to consider if you want to maximize points without worrying about credit. Although it's worth repeating, no credit card rewards are worth it if you pay hundreds to thousands in interest every month.
Points can expire—don’t let them go to waste. Keep an eye on those dates and plan your redemptions. Staying informed about the terms and conditions of your credit card program ensures you capitalize on your points before they lapse, safeguarding your potential savings.
Multiple cards mean more points and opportunities for different sign-on bonuses, but can also lead to chaos. Stay organized, so you don't miss out on rewards. You can effectively manage your credit card portfolio by keeping track of card balances and rewards structures and optimizing point accumulation and redemption strategies.
Many vendors charge nominal credit card usage fees, typically around 2-3% per charge, which is standard. If your cash back or travel point rewards are higher than that percentage, you're good to go because ultimately you'll make more from the cashback than the fee you're paying to use your credit card.
Maximizing credit card points can slash costs and boost benefits, from operational savings to staff rewards. By making savvy choices, restaurant owners can bolster their financial health and operational efficiency, creating opportunities for reinvestment and growth. Ready to level up with every swipe? Dive into these strategies and watch your restaurant's fortunes flourish, ultimately leading to a more sustainable, successful business. Just make sure if you play the credit game that you're ready to pay those purchases off every month!
The information above is provided for general information only and does not constitute legal or financial advice. Please consult your lawyer, accountant or Mom for professional advice before making changes to your business.