Introduction: Profitable Restaurant Business

A restaurant owner/manager has to wear many hats in order to manage day to day operations of a restaurant. Only a food entrepreneur who can extract various skill sets from his personality can survive in this business. He has to manage different aspects of business including food quality, house kitchen, sourcing of raw materials, marketing, customer service and public relations. While well-funded MNCs are involved in this business to cater to high-income groups, middle and low-income group customers are still being catered by standalone restaurants which are owned by an individual or a family. In these small restaurants, the owner is also the manager of the unit who usually looks after staff, house kitchen, raw materials and customer service. To run a successful and profitable restaurant, the owner/manager should consider certain improvisations, which are:

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• Customer is God

The golden rule of business is that the customer is always right. This saying cannot be truer in the restaurant business. How you manage customer complaints, even when you do not agree with them, will define whether the customer comes to your restaurant again or not.

• All employees must have clarity on their job profile

All employees of a food joint need to be at their best performance during peak hours. This is only possible when each and every employee is aware of his/her job responsibility and is willing to give his one hundred per cent as and when the time demand. The customer experience of the service largely consists of food quality and the behaviour of the waiting staff.

• Effective advertising to get success

A big part of restaurant management is advertising. Restaurant advertising has come a long way from newspaper ads and radio spots to online advertisements through food portals. Social networking offers a low to no-cost way of promoting your restaurant.

• Restaurant Owner/Manager should watch cash flow closely

Cash flow includes the amount of cash that a business entity generates during the day-to-day functions of production, sales, purchase and other allied services on a daily, weekly and monthly basis. It includes both the cost and revenue of a business. Higher inflow defines effective management. If the restaurant owner/manager is not aware of this basic concept of any commercial enterprise then he should make himself updated with the latest happenings.

• Promotions - a sure way to increase footfall in your premises

Promotions are very important for any restaurant to attract a young crowd who have disposable income. It may include happy hours, two-for-one dinner specials, cheerio –o- knights, live events etc. These activities would increase revenue as well as capacity utilization. 

• Restaurant catering can help to boost sales

The restaurants which have been serving the customers, develop a certain goodwill and brand loyalty with their clientele and have all the resources – food, equipment and staff. They are suitable for catering small and large events. Relying on retail sales will only keep you one step behind your competitors, So an owner/manager should think of onsite catering as an important revenue stream.

• Business review on daily basis for keeping track of operations and sales

Business reviews on a daily basis affect the performance of the business as a whole and on a departmental basis. The same is true for a restaurant also. The daily usage of raw materials and sales & operations can be recorded and analyzed on a daily basis.

• Adequate use of IT for operational efficiency

Usage of Information and Technology systems allow restaurant owners to track sales, cash flow and food inventory. This can greatly simplify day-to-day restaurant activities, helping to manage food cost and payroll efficiently, as well as track the popularity of menu items and their sale. 

• A restaurant menu should be updated regularly

Changes in food price, best menu item and the cost of running a business change. Therefore, it’s important that restaurant menus have prices that keep a combination of best menu, bestselling items and best seasonal demand.

• Small steps can save restaurants money

Switching to energy-efficient light bulbs and low-flow faucets are just two ways that restaurants can save money (and the environment).

Managing a restaurant involves many different parts from hiring and firing to tracking sales and basic accounting. There are lots of tools available to help make managing a restaurant easier, including IT systems and daily business reviews. A good restaurant manager is able to delegate tasks and knows when to ask for help.