4 Steps to Building a Successful Restaurant Business

Posted on by

This article is taken from the Build Your Queue podcast below, Episode 37 with Jason Bowers, Owner of Bitter Alibi and Daily Ration.

Establishing a successful restaurant is tough. There are so many moving pieces you need to consider, like staffing, pricing, and menu items. You may not know which areas to tackle first as a new restaurateur, but we’re here to help you with these four starting points:

  • How do you delegate tasks to grow your small restaurant business?
  • How do you handle turnover to prevent excessive hiring costs?
  • How do you keep customers coming in through targeted marketing?
  • How can you change your operations to be more profitable?

We’ll help you create strategies for these four key areas, so your new restaurant can provide a quality dining experience that gets customers championing you through word of mouth.

1. How do you delegate tasks to grow your small restaurant business?

You ideally want to be able to jump in and help with every aspect of your restaurant as its owner. But it’s even more vital that you’re able to properly delegate the work to the right staff, so things run smoothly when you can’t be there and your small business can grow.

How do you pull that off?

Start by listing out all the areas you need to improve, then prioritize delegating tasks to the employee who is best suited to help solve the most important ones. It's okay if they don't do it 100% perfectly or like you would do it. Perfect is the enemy of done, and you need to get things done.

Knowing your employees on an individual basis is huge for this. You need a solid grasp of their skills, personalities, and areas they want to grow in, which you can gain by doing things like:

  • Encouraging informal social events where you can get to know your team better
  • Soliciting honest feedback on areas they think the restaurant could improve
  • Setting aside time for team brainstorming sessions
  • Directly asking employees how they envision themselves fitting into your restaurant’s long-term goals, as well as what goals they have for themselves
  • Taking time to ask how they’re doing and learn who they are on an individual basis

Prioritizing building relationships and morale with your staff is going to help you successfully delegate tasks in the long run, compared to calling out every detail that isn’t perfect when you do hand off a task.

After all, employees who are happy working for you are much more likely to carry out the task you’ve given them with a higher level of passion, than employees who feel you nitpick their every action.

PC: QSR Magazine

2. How do you handle turnover to prevent excessive hiring costs?

Even if you give your staff the best treatment, there’s a good chance they will move on to a different field of work or pursue higher-level roles elsewhere.

How do you handle hiring and retention in an industry that has a 75% turnover rate? Especially when turnover is uber expensive, and on average costs a full-service restaurant operator $146,600 annually.

When you take care of employees, they stay longer and become advocates for your restaurant. You take care of them by doing things like:

Paying better than your competitors (including bonuses and benefits)

  • Having employee appreciation events
  • Offering on the house drinks and appetizers to employees during their shifts
  • Ensuring you have clear communication (defining goals, roles, expectations, ect.)
  • Giving them opportunities to offer their opinions things like menu items or decorations
  • Avoiding over staffing, so tips are split evenly

What do all these actions have in common?

They demonstrate you’re aware of your employees’ perspective and that they’re more than a number or an expense.

Employee morale has a pretty major impact on your financials, and your guests can also tell if employees enjoy being there. It's the right thing to do, and it comes full circle.

57% of employees who quit do so because they don’t have a good relationship with their manager, while engaged employees who stay with a restaurant typically rate their happiness with management at a 4/5.

PC: Lightspeed

3. How do you keep customers coming in through targeted marketing?

Restaurateurs need to know their target customer. Otherwise how can you create a marketing plan and customer experience that is catered to their specific needs?

You can identify your customer base by looking at who is already coming in and making a note of their general:

  • Age (Millennials vs. Boomers)
  • Attire (are they formal vs. casual)
  • Purchases (food vs. drink)
  • Pain points (are they looking for something cheap vs. searching for a cool brunch spot)

Knowing your regulars is key for this (so keep track of who is a new customer vs. who is returning). If you’re close enough, you can even directly ask regulars how your restaurant fits into their routine and if there’s a certain thing that keeps them coming back.

Once you’ve collected this information, you can use it to create a persona for your restaurant to help you visualize your target market.

For example, if your business was a person, what would they wear? How old would they be, and what are their goals? Your business can have a few different personas or outfits, but the point is that you have a standard idea to inform your marketing decisions and how you represent your restaurant.

Note that asking yourself these questions before you even open your doors can help you build toward a target audience from the beginning. 

From there you can create content that reflects that persona on social media or your restaurant’s newsletter.

Stay hyperlocal with these efforts (as opposed to pursuing customers who are tourists). When the locals know and champion you, the tourists will naturally find you as they ask around for the best places to eat. Plus your regulars are also going to be local, and you want those folks coming back as much as possible.

Your restaurant’s biggest friend is word of mouth marketing, so make friends with other locations that fit into your target customer’s routines. If your bar typically attracts a younger crowd, a club that does the same could be a spot to direct traffic to you and vice versa.

4. How can you change your operations to be more profitable?

The 2020 pandemic showed everyone that you have to be ready to pivot when change hits. The restaurant industry in particular had to prioritize takeout and mobile options.

What can you take away from these changes to increase profitability?

The goal is to serve more people more quickly in a way that takes a load off your team, and having a texting platform can help you do that when you:

  • Deliver curbside pickup updates
  • Share promotions and discounts
  • Send online order confirmations
  • Collect payments faster via textable link
  • Moving from table service to counter service when you send text alerts for when food is ready

A POS system can also help you document customers’ information from their receipts, so you can invite them back or share new offers via text message later.

You can even invite customers to subscribe to your restaurant’s SMS subscriber list in exchange for a free appetizer or beverage, like:

“Hi [Name], we miss seeing you! Your next drink is on us next time you stop by.”

VIP rewards in particular can be a great way to get customers to come back in repeatedly when you send them updates on rewards they can receive based on their amount of meals.

Be the type of restaurant that people want to work at.

Out of all the restaurant concepts you could pick, aim for one where customers sit down and go, “Oh, wow! Wouldn’t it be fun to work here?”

Treating your staff well means:

  • More passionate service from employees
  • More word of mouth and publicity about how awesome you are
  • Lower turnover rates

So listen to your employees when they have something to say.

They can help you identify areas of improvement that you may have missed on your own, or present new, creative ideas that they know will appeal to the customers they serve every day.

Employees who feel committed to the cause will always do more and bring more to the team.

Related: 4 Ways to Use Onboarding to Create Company Advocates