Take Your Restaurant to the Next Level: 13 Tips for Busy Owners

Business tips for restaurant owners

There are many things to consider before starting a restaurant, including whether your restaurant should only accept credit cards and which kind of restaurant security you need. Truth be told, the work is never done. Once your eatery opens, your goal should be to maintain a steady revenue and then eventually grow your profits. To take your food establishment to the next level, embrace these business tips.

1. Treat consistent quality as a nonnegotiable.

Go to any McDonald’s or KFC in the United States and you know what you’re going to get every time. Major food brands build their reputation on consistent quality in all aspects of operations and you should follow their lead. Make sure that on each visit, customers get the same great-tasting food, personal attention and inviting ambiance they seek. To achieve this, you’ll first need to be clear on what you want from your kitchen and front-of-house staff. Then, you’ll need to keep motivating them to deliver time and again, even when your restaurant seems uncontrollably busy. 

Be careful to ensure quality and consistency don’t incrementally fall over time or slip during busy seasons. Are you tasting menu items regularly? Is the restaurant always as clean as it should be? Are tables served fast enough? Consider hiring mystery shoppers during peak hours to give feedback on their experiences.

2. Look after your staff and give them more to do over time.

The most successful business owners don’t do everything themselves — they know how to delegate tasks related to finances, human resources (HR), inventory and scheduling. Hand some key responsibilities over to managers, chefs and experienced waiters bit by bit. Show them exactly what you want them to do and support them as they learn. The best HR software for restaurants makes it easy to manage your staff and track their performance. 

Let your own personal strengths and weaknesses guide you in delegating responsibilities. Start by passing on assignments that you know a particular colleague can do better than you. They’ll appreciate the trust you show in them. As their boss, do everything you can to make staff feel like family rather than colleagues. Foster a stronger relationship with staffers through team-building and social events. 

By involving workers more in the day-to-day running of your restaurant while also seeing them as more than just an employee, you’ll have more time to work on growing your business — and your employees will be more motivated to help your enterprise succeed.

3. Weigh expansion options.

Consider opportunities to grow your business in your current location. Perhaps you’re booked most nights but there’s room to expand. Work out how much it would cost to renovate that extra space, including paying for an additional lease or construction expenses. Then determine how many customers you’d need to seat on a given night for a robust return on investment.

If expanding in your current location isn’t an option and you’re thinking about opening in a different area, do as much research as possible to make sure this new market could use your business. Bear in mind that opening a new restaurant is usually more expensive than extending an existing one. Let our tips for opening another location be your guide.

4. Welcome online reviews.

Thanks to Yelp and Google Reviews, everyone is now a critic. According to PowerReviews, 90 percent of consumers consider reviews when making a purchase decision. With this in mind, make sure you respond to all online reviews — good and bad ones. Engaging with customers who have left a bad review shows you care about diners’ experiences and that when something goes wrong, you want to put it right. If someone pays you a big compliment after they’ve finished their meal, ask them to leave a review. Over time, your online rating will likely improve.

5. Be smart about purchases.

According to Popmenu, average food cost percentages — the value of your food expenses relative to revenue — are between 28 and 32 percent. Your goal should be to find the best ingredients for your menu without going over your budget. Apply a similar financial mindset to all aspects of your establishment. You don’t want to sacrifice quality, but a restaurant that spends more than it takes in isn’t sustainable.

There are opportunities to save everywhere: Choose a restaurant payment processing provider with the lowest fees and the fastest settlement time. Consider the costs of installing food prep stations and replacing dinnerware. Avoid overpriced furniture and decor. Take advantage of special deals too as some vendors have trade programs where you can get volume pricing and be connected with a curated list of designers and architects for consultation.

6. Establish your online presence.

Market your restaurant online with a Google My Business listing, active social media channels and local directory listings. Pay particular attention to your website. Patrons will almost certainly visit it when deciding whether they’re going to book a table or not. Keep your site up to date with your menu, location and hours, social media links and enticing images of gorgeously plated food. [Learn how to attract customers to your restaurant.]

7. Revisit menu item pricing.

The cost of ingredients is always going up, especially in recent years and your profit margin will diminish if you freeze your prices. However, raising prices can be a problem for established restaurants as repeat guests may have somewhat concrete expectations of what they will spend at your venue. 

What are your options? You could reduce your portion sizes or opt to replace unprofitable menu items. Perhaps you post a sign notifying customers of price increases and why they’re necessary. There will be a consequence to each course of action. Most restaurants make changes to pricing gradually instead of in one go. Revisit ingredient costs and the pricing of each item on your menu regularly to ensure you’re serving both the customer and yourself well.

8. Value customer retention over acquisition.

It’s essential to find new customers as people move in and out of the neighborhood surrounding your restaurant. However, repeat business is more important. Local restaurants can’t survive without the goodwill and continued patronage of their regulars. Experiment with different methods to boost customer retention and engagement, such as special deal nights, loyalty programs and tasting evenings. You don’t want just to give people a reason to try you out — you want to give them reasons to come back.

9. Use the latest technology.

You can save money and improve experiences for staff and customers alike by investing in the latest restaurant technology, like restaurant-specific point-of-sale (POS) systems. Here are our top recommendations:

• Restaurant management systems: Use a restaurant management system to help manage all aspects of your restaurant, including sales and staff rosters, inventory and customer data.
• POS systems: Read our review of TouchBistro and our Toast review for two POS options specifically designed for restaurants. The best POS systems for food and beverage establishments are built with the restaurant industry in mind.
• Table tablets: There are many reasons to use restaurant tablets, which are commonly iPad devices. For one, patrons given these tabletop tablets can order their food and drinks independently instead of waiting for a server. They can also use the tablet to pay for faster checkout. [Find out more about the benefits of restaurant iPad POS systems.]
• Inventory management software: Implement the latest restaurant inventory management software to better keep track of your ingredients and supplies and reduce food waste, which dents many eateries’ profitability.

Some restaurant tools only apply to certain types of food businesses. For example, consider a bar POS system if your establishment emphasizes drinks more than food items. There’s also specific technology best suited for food trucks. Stay in the know about other restaurant technology trends as the industry rapidly evolves.

10. Open a delivery arm.

When some states forced restaurants to stop in-person dining during the coronavirus pandemic, many establishments started offering home delivery services to keep food going out and money coming in. Some began selling their dishes via platforms like DoorDash and Grubhub while others created in-house delivery systems with their servers now acting as delivery drivers. These practices have continued in the years since.

As you consider opening a delivery arm, carefully study the terms of each food delivery service app and weigh their charges against expenses you could incur handling delivery yourself. For instance, Grubhub charges 15-20 percent to be listed on its site and another 10 percent if a customer wants to have their food delivered. It’s expensive, but it can be extra revenue for periods of spare capacity in your kitchen without requiring additional staff. [Related article: Should Your Restaurant Be on Grubhub?]

11. List your restaurant on table booking apps.

You can use restaurant reservation software so patrons can conveniently book a table from your website or via listings on platforms like OpenTable, the Eat App, Yelp Guest Manager and TripAdvisor. OpenTable charges $1 per seated cover and a monthly subscription of $249. Competing apps charge for subscriptions, ranging from $199 for the basic Eat app to $899 for Resy.

Like with food delivery apps, reservation apps have two drawbacks: Subscription charges eat into profit margins, and reservation apps are intermediaries that essentially own your customers’ contact information. You’ll get bookings, but you don’t get to keep customers’ email addresses or cell numbers, so you can’t market to them directly.

12. Hire a reputable accountant.

Working with a financial professional who knows how restaurant accounting works is critical to staying profitable. An accountant with extensive experience in the dollars and cents of the food industry can keep an eye on your spending and give you ample warning if costs are running away in a particular area. They can also make sure you claim all possible tax deductions. More money in your bank account means more money for you and your family or to reinvest in the business.

13. Rethink daytime hours.

Many restaurants open only for evening service, but they’re paying rent 24/7. That could mean leaving money on the table. When it comes to maximizing your revenue potential, think outside the box to develop profit-generating ideas that bring in cash outside of your traditional busy hours.

For instance, if kitchen staff arrive early to prep, why not develop a daytime takeout menu? If it takes off, hire someone to make daytime deliveries. What about sharing your expertise and passion for cooking? Many bars hold special classes to teach drink lovers how to make signature cocktails. You could even run a beginner, intermediary and advanced course for local residents on how to cook their favorite restaurant dishes like a pro.

Avoiding restaurant failure

Restaurants fail all the time. Why? Because their owners don’t address the important factors within their control. They think the formula that works now will work forever and, therefore, never change or don’t delegate tasks and get burned out. Give your restaurant the best opportunity to survive and thrive by following the tips above and checking out our additional strategies to help your restaurant increase profits.

Kimberlee Leonard contributed to this article.