With one in ten venues closing in the last year, here’s how to stay out of the danger zone

It’s no secret that it’s been a tough trot for hospitality businesses. According to the latest Business Risk Index, one in ten hospitality venues shut their doors in the past 12 months, and many more are teetering on the edge of insolvency.

From rising supplier costs to staff shortages and punters tightening their wallets, margins are getting squeezed harder than a lemon in a G&T. But here’s the good news—there are ways to fight back and fatten up those profits without compromising your customer experience.

Here are five practical (and totally doable) ways to shore up your margins

1. Know your numbers like a ninja

It sounds basic, but you’d be surprised how many venue owners don’t have a clear handle on their profit margins by menu item, day of week or service period. If you’re flying blind, it’s time to switch on the lights.

Look closely at your cost of goods sold (COGS) and labour-to-revenue ratio. Identify what’s really making you money—and what’s dragging you down. That $28 gourmet burger with artisanal aioli might look flash, but if it’s costing $18 to make and rarely sells, it’s eating your profits.

Use your POS data to track top-selling, high-margin items and double down on promoting them.

2. Simplify your menu

More isn’t always better. A big, complex menu might impress at first glance, but it can lead to waste, inefficiencies in the kitchen, and confused customers.

Instead, trim the fat. Focus on a tighter selection of dishes that use overlapping ingredients to cut down on waste and ordering costs. This not only streamlines operations but makes life easier for your kitchen team, especially if you’re short-staffed.

Review your menu quarterly and axe the low performers. Your bottom line will thank you.

3. Rethink your pricing (yes, really)

In a cost-sensitive climate, it’s scary to raise prices. But hear us out—strategic price tweaks (done smartly) can make a huge difference without scaring off your regulars.

Instead of hiking everything, bundle value into key items or create upsell opportunities. Offer add-ons, set menus, or limited-time upgrades. It’s about increasing the average spend per customer without them feeling ripped off.

Example: Add a $3 “truffle upgrade” to your fries or create a $25 lunch special with drink and side included.

4. Cut costs without cutting corners

Slashing quality to save money? Big no-no. But that doesn’t mean you can’t tighten expenses in clever ways.

Negotiate better rates with suppliers, join a buying group, or source seasonal produce locally to cut freight costs. Keep an eye on your utilities and consider energy-efficient upgrades that’ll pay off long-term. And make sure you’re not over-ordering or letting stock spoil—every wilted herb or off prawn is money in the bin.

Conduct a weekly stocktake to stay on top of waste and avoid surprise blowouts.

5. Maximise what you’ve already got

You don’t need to build a beer garden or install a pizza oven to make more money. Sometimes, it’s about making better use of your existing space and time.

Got a lull on Monday evenings? Host a community trivia night. Quiet lunch trade? Partner with local businesses for catering. Late-night foot traffic? Offer takeaway snacks or drinks. Hospitality margins are tight—but creativity is free.

Think like a local: What does your neighbourhood need that you could offer with minimal changes?

At the end of the day, you want your business to survive, so you have to think strategically. Sure, times are tough – but you are too. Small business owners are a resilient bunch and if you get proactive now you can get ahead of any issues down the track. So get forensic on your finances, look at your offering, raise your prices and stay agile.

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