5 steps to scale restaurant profitability

In my journey as a restaurateur, I’ve learned that success hinges on more than just great food and beverage. You’ve heard me say it a thousand times before but restaurants with great food and great service close every single day. Success in our industry comes down to understanding and implementing key business strategies centered around profitability. During my 20+ year career as a restaurant owner and after coaching hundreds of independent owners and operators, I can assure you that a blueprint for sustained profitability exists and, in this article, I’m going to lay out the foundational elements of that blueprint.

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For many of us, marketing seems like the solution to all of our problems when the reality is that more volume at a terrible margin will only hurt our business.

Ask yourself the following questions before trying to convince more people to come to your restaurant: Are you fueling a broken machine?

STEP 1: Master the margins

Fine-tuning financial operations

Profitability starts with a maniacal focus on your margins and your margins are composed of a few key decisions you’ve made within your business. Here’s what you need to scrutinize:

Pricing strategy: Evaluate if your pricing reflects not just costs but also the perceived value, ensuring profitability. If you’re not priced for profitability, there’s no hope.

Value across platforms: Assess how your restaurant presents itself online and offline. Is the experience you offer compelling enough to justify your prices? Value is not what they pay, it’s what they get–make sure that your guests are getting more than just a meal to maximize their perceived value.

Operational streamlining: Examine your staffing, menu, and hours. Efficiency is key; unnecessary expenses can silently bleed profits. This is your opportunity to cut the fat from your labor model, your menu, and your operational infrastructure.

Demand and capacity management: Are you efficiently managing peak times? What would having one more table available on-peak do to your annual revenues? Could you be inadvertently turning away customers? Ensure your reservation software is optimized to maximize the seating capacity of your restaurant.

Table turnover tactics: Implement strategies like menu simplification or staff training to increase table turns without sacrificing customer satisfaction. What if you could increase from two to three turns in a night? Optimizing the sales process of your floor staff can have a massive impact on top line sales without affecting labor.

STEP 2: Get attention

Leveraging social media for brand building

Most of us are using social media in the wrong way. For restaurants, social media isn’t a sales platform, it’s an awareness engine. Due to the fact that customer intent is incredibly low on these platforms, our efforts to compel viewers on Instagram or TikTok to dine with us are largely ineffective. Understand that Social media is your stage. Use it to tell your story and connect:

Storytelling: Share what’s happening behind the scenes. People connect with stories, not just products. Providing cooking and cocktail demos is a great way to share your story in an engaging way.

Humanize your brand: Showcase your team, your passion for food, and your involvement in the community. People support people, not businesses. Highlighting the faces associated with your business will drive more connections and, as a result, more customers.

Authentic engagement: Share both your successes and challenges. Authenticity builds trust and loyalty among your audience. You’ll never be perceived as a hero without overcoming obstacles.

Personal touch: Let your patrons know that their support means more than just revenue; it contributes to the fabric of the community. Gratitude can become your differentiating factor.

STEP 3: Convert

Optimizing online impressions

When someone decides to dine at your restaurant, what are they looking at? What are they doing at that moment? They’re probably not on your social media, they’re on your Yelp page or website. That’s when customer intent is highest and, where customer intent is highest, your online presence can make or break a customer’s decision:

Web presence audit: Ensure your website and online listings are up-to-date, visually appealing, and informative. Providing compelling reasons to choose your restaurant paired with a singular call to action is a great way to increase conversions.

Content quality: People eat with their eyes. Invest in professional photography and compelling copy that reflects your restaurant’s ambiance and culinary experience.

Analyzing competitors: Some call it stealing but professionals call it “modeling.” Regularly review competitors’ online strategies. Choose what you like best and what seems to work most and adapt their successful tactics to fit your unique brand.

STEP 4: Frequency

Transforming guests into regulars

The big idea here is that repeat business is the easiest money to make. It doesn’t require effort, it requires infrastructure. Frequent customers are the lifeblood of your business and here’s how to get them and keep them:

Data-driven engagement: Implement loyalty programs and gather customer data to personalize experiences.

Communication strategy: Develop a calendar for regular, targeted outreach through emails and texts, keeping your restaurant top-of-mind.

Exclusive offers: Create special promotions or events for repeat customers, fostering a sense of belonging and appreciation.

STEP 5: Recruit

Building one-to-one marketing relationships

Most of the marketing restaurants do is one to many. We post something on social media, blasted out to thousands of people and we hope it resonates with a few. Rarely are we able to build a relationship strong enough to leverage in the future. For that we need to market one to one.

The art of building these relationships isn’t in the “how”, it’s in the “who.”

Identify key influencers: Forge relationships with local business leaders, hotel managers, and other influencers who can introduce your restaurant to new patrons.

Mutually beneficial partnerships: Offer incentives for these community connectors to share their positive experiences at your establishment.

Focused networking: Attend local events and engage in community activities to increase your restaurant’s visibility and network.

Pulling it all together

Remember, each decision you make, from pricing to community involvement, weaves the story of your restaurant. Make it a story worth telling, and watch as your establishment becomes a cornerstone of your community.

Running a successful restaurant requires a blend of culinary excellence, business savvy, and community engagement. By focusing on these five key steps, you’re not just running a business; you’re cultivating a brand that resonates with your community. Stay passionate, innovative, and customer-focused, and your restaurant will not only survive but thrive.

Click below to download our Profitability Goal Setting Worksheet, providing you with the areas of focus you need to attack to maximize your restaurant’s profitability.

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