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How to Run a Successful Restaurant Business

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Yamarie Grullon

Ready for the unhappy truth about starting and running a successful restaurant business. Sixty percent of new restaurants just aren’t going to make it, according to a CNBC report. 

A crowded event space with many people standing and talking.

If you're on the cusp of embarking on a new restaurant venture, this bitter truth might be hard to swallow. Luckily, there are a few things you can do to radically improve your chances of success — like reading this article for starters.

From perfecting your restaurant menu to simplifying your day-to-day operations, here are a few pointers on how to run a restaurant successfully.

Rethink Your Restaurant Menu    

Chances are that you initially came up with your menu by writing down a list of all of your star dishes, but when is the last time you did a menu analysis?

Every dish on your menu and ingredient in your inventory should have a purpose, and part of its mission is improving your profits.

Fifteen percent of each local landfill is comprised of food thrown out by restaurants, and the problem is growing. This food waste statistic is certainly alarming, but have you ever stopped to think about how this issue might be eating away at your profits?

When running a restaurant and making changes to your menu, it's important to understand how you're making use of every ingredient you purchase.

Keep an eye out for raw ingredients that go uncooked as a result of overestimating ingredient purchases and individual components of dishes like roasted chicken, sauces and sauteed mushrooms.

Having a plan for extra food that was prepared, and unused ingredients, will not only do a lot to reduce your food costs but can help you come up with a few innovative menu items to test with your customer base.

Once you have an understanding of how your ingredients are impacting the economics of your business, other factors to consider include: menu items that are low in popularity and contribute low profit margins, items that have a low profit contribution but are high in popularity, items that are both high in profit contribution and popularity and items that have a high profit contribution margin but are low in popularity.

Recruit, Train, Retain

Finding and keeping quality staff is one of the most challenging aspects of running any business, especially running a restaurant, but we cannot stress enough how important it is.

When you're juggling a lot of different roles it can be tempting to focus on getting headcount rather than quality headcount, but your employees are the face of your business, so make sure they're the right fit not only for your brand but also for the atmosphere you're trying to create.

A few general traits to look for in your staff include tolerance, leadership skills, passion, presence, and persistence.

The degree to which each of your employees needs these qualities will vary, but bottom line, you want to find people who are willing to grow with your business and stay for a while. 

We know you're time-pressed but whatever you do, do not skimp on the training plan.

Whether it's 15 minutes of serious training pre-shift or monthly training sessions for particular staff, it's important that your employees understand your expectations and how to leverage the tools available to them to contribute to the success of your business.

Training is a crucial aspect of running a restaurant.

Employees who don't understand their role in your business are more likely to be disengaged. Training employees isn't just about getting the most out of them, it's also an opportunity to connect with, understand their strengths, weaknesses, goals and how you can contribute to their overall growth and success — improving the odds that they will stick around longer.

Workforce Management Tools

Intelligently managing your business staff is crucial for time-pressed restaurateurs. By utilizing the right technology, you can simplify scheduling, inventory management and a variety of other time-consuming day-to-day operations that add stress for you and your employees.  

Given that labor costs typically average 35 percent in the restaurant industry, investing in cloud-based solutions can help.

This is important for keeping your costs down and running a profitable restaurant business. Take the restaurant point of sale for example. Traditional, legacy point of sale systems could easily average around $10,000 year or more, once you account for upfront licensing fees, monthly maintenance, installation, and fixed terminal costs.

Cloud-based point of sale software, on the other hand, eliminates the need for these excessive fees. 

A basic starter kit averages around $2,000, that's a savings of $8,000 that you could be investing back into your business.

Marketing Your Restaurant Business

Is your restaurant still the best-kept secret in town?

Chance are your marketing efforts, or lack thereof is capping your brand awareness and leaving money on the table. It's no secret that how customers find your local business has fundamentally changed in the digital age.

In fact, research shows that 81 percent of consumers have searched for a restaurant on a mobile device and 92 percent have searched for a restaurant via a web browser.

While no amount of marketing will ever make up for good customer relationships or quality food and service, if you're not leveraging the power of online marketing you're limiting the potential reach and revenue for your business.

For restaurants, this includes making sure their menu and business information is available where customers are searching for them online. Popular online directories and popular search engines include Yelp, Google, TripAdvisor, OpenTable, MenuPages, Facebook and Instagram to name a few.

Be wary of spreading yourself too thin, especially on review sites and social media channels that will require regular monitoring and management. Know your audience, survey customers to understand their online habits and then determine the best way to reach them.  

Bottom Line           

Running a restaurant is tough, but with a little patience, persistence, and planning, you set yourself up for success.

There's a lot more that goes into running a successful restaurant business than the areas that we covered above.

But if you can develop the right attitude, keep an eye out for the competition, provide top-notch service, all while following some of the advice shared in this post, you'll be sure to radically improve your chances of restaurant success.

Yamarie Grullon has years of experience creating helpful and engaging content for small business owners. As Manager of Content Strategy at ShopKeep, Yamarie provides merchants with practical advice on all things related to their business or their POS system.


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