Running a restaurant is no easy feat. Restaurant owners face a plethora of challenges that require constant innovation, flexibility, and perseverance. From ensuring top-notch food and service that meets customer expectations to managing a team of skilled chefs and staff, controlling inventory and costs, navigating complex financial systems, delivering exceptional customer service, and handling customer feedback, restaurant owners must be able to adapt to a constantly changing landscape in order to succeed.
As an accounting firm that specializes in serving business owners in the restaurant industry, many of our clients own multiple locations and have a strong regional presence. They're not all necessarily franchised (though some are), but they are established and, most importantly, profitable.
In working with those restaurants, we’ve learned what works and what doesn’t work for a broad range of restaurant styles, locations, and sizes. We’ve developed processes that allow us to produce accurate financial statements and provide guidance to help our restaurant clients succeed.
Here are 7 ways restaurant owners can maximize their profit potential.
Running multiple restaurants across multiple locations means having consistency and smooth processes to make sure that you’re able to easily replicate what works – and eliminate what doesn’t. We’ll be doing an even more extensive deep dive on this topic in the coming weeks, but for now let’s just say that creating foolproof processes is the first basic building block of creating a restaurant that’s profitable.
These are far from the only KPIs you’ll want to track. Others might be more specific to your exact menu, demographic, or location. HOW you track these KPIs is important.
We can recommend several great Point of Sale systems that you can use, but nearly any of the modern POS software will have those metrics built into it. If you haven’t already, take a moment to familiarize yourself with the tracking components of your POS system. Once you can master that you’ll have full control of your restaurant. You’ll understand inventory, how much each item on your menu ACTUALLY costs to make, and even how many people on average are on each ticket. If you DON'T have a good POS system, start there. TOAST, Restaurant 365, and Lightspeed are all great examples, but are far from the only options.
You might THINK you know what’s the most popular food item, but we’re going to ask you to do some digging here. Solicit ideas from your employees – what are they seeing as the most popular items? Look at other restaurants in your space – what new items are they adding that have become viral sensations? Finally, using your POS, look up the profit margins for your dishes. Identify trends – do items become more popular in certain seasons?
Creating new items can be a great way to bring in new customers, especially when they’re featured prominently on your social media. If your restaurant has a liquor license, the bar industry is huge into creative cocktails these days. Pairing those with new IPAs can be a way to get customers in who will be primarily buying some of your most margin-friendly products.
Additionally, changing your seasonal items, advertising seasonal and local produce, and creating special sales can be additional ways to keep your menu fresh.
Your customers are the lifeblood of your business, and it’s time to show them some love. Using a CRM (customer relationship management) system to collect their data is good for you – but should be good for the customer too! You can whip up personalized marketing campaigns, loyalty programs, and promotions that are geared towards your loyal fan base.
Look at what days might be lagging behind the others. Tuesdays are slow? Maybe a BOGO deal is the way to go. Want to reward repeat customers? Create a digital punch card system where they spend X or buy X and get Y in return. Not only are these great ways to foster repeat business, they also allow you access to the email address of your client base. Do not abuse this list, but by frequently sending news on new food items and even coupons can make your restaurant feel like a bonus in their inbox and not a drag.
The post-COVID world looks a lot different than it did before 2020. Part of that is this: restaurants NEED to embrace online ordering. It’s not going anywhere. We understand your resistance, as app surcharges inflate and the margins get smaller – but luckily there’s been a great solution recently that we’ve found works to corral all your ordering options into one place.
Chowly integrates with your POS systems easily to add online ordering options for your business. They’ve taken the process for all delivery services (like Uber Eats, DoorDash, Grubhub, etc) and created one landing zone.
This isn’t just about keeping an eye on the competition, but that IS part of it. You’ll want to sniff out market trends and figure out just exactly what your customers are willing to pay. If you can crunch some numbers and use real-time data to adjust your prices dynamically, you’ll hit a sweet spot that could lead to some major profits.
Food cost is a big one here – especially as the cost of an item can wildly change from one month to the next. Maybe tomatoes are a dollar a pound this week, but four next week – will you have to change your menu price? YES. It might mean switching up distributors seasonally. You can use local produce as much as possible when it’s in-season, but go back to a national distributor if it’s out of season.
Remember: most restaurants AREN’T about getting into a value/what’s cheapest roll with their customers. Yes, competitive pricing matters – but it’s more about a competitive menu. Price matching is less important than you think, especially if you offer a quality product. One way to justify price is to call out what your restaurant does well. Do you have a signature item that no one else can do? Do you utilize local produce? The menu can be a great place to point that out.
This is one that sometimes just needs a refresh. Sure, it was fun to be on social media at the start of your business when everything was fresh and new – but be honest: are you still posting with the same excitement now? Investing in your marketing and branding is a great way to teach folks about what kind of restaurant you are and what sort of experience they can expect.
If you can’t produce this content on your own, hire a social media manager. It’s never been easier to make compelling content with something as simple as the camera on your phone, so having someone who understands social media AND your restaurant can do wonders for bringing new customers in. The more mouths you water, the more hungry diners you’ll ultimately bring in.
Creating consistent messaging is a powerful force. It’s hard to think of Chile’s without thinking of the El Presidente Margarita. It might seem goofy, but you better believe that the next time we go, we’re getting one of those drinks!
Your restaurant can’t just be about the food anymore. People want an experience. What does that mean? Well, it starts with the staff. An educated, friendly, and motivated staff are the key to any experience, as this is the primary interaction your customers will be having. Listen to your customers, ask for feedback, and integrate those changes.
Things like an instagram wall or neon sign might seem funny at first, but the more folks tag you on social media, the better. These are inexpensive options that can vault your restaurants up to an “experience” level. By putting these strategies into action, you'll unlock a world of opportunities to boost your revenue across all your locations. We get it, running a restaurant is hard work. But hey, we're here to support you every step of the way. Let's chat and make your business thrive!
Investing in staff training programs helps to continuously improve your service quality. The results: higher customer satisfaction, positive reviews, and increased patronage.
By putting these strategies into action, you'll unlock a world of opportunities to boost your revenue across all your locations. We get it, running a restaurant is hard work. But hey, we're here to support you every step of the way. Let's chat and make your business thrive!
More reading on how to make your life better as a restaurant owner:
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