Every business wants to make money. In the restaurant world, we know first hand how critical a successful business operation is. Especially in the first year, where estimates of failure exceed 30% during the first two years, 50% after 5 years, and over 66% within 10 years.

So, where do we start in making sure that we’re successfully increasing our revenue on a regular basis and being profitable?
 

Understanding Your Costs:

 
The costs of running a restaurant go beyond the food you’re known for and the employees that help your establishment run smoothly. Looking for a full list of start-up and operating costs? Here are some key costs you should know by heart and be pretty familiar with:
 
  • Rent Costs
  • Utilities Costs
  • Staff Costs
  • Food and Beverage Cost
  • Cost of Services from Outside Vendors

Rent

Rental costs include what you pay out for rent for your space every month. These costs can include any common areas shared with neighbors and other businesses, that share your space. Also included in these monthly costs should be hazard or accident insurance to cover any risks associated with running the restaurant, in the event of a disaster.

Staff Costs

Make sure you’re aware of what it costs to employ your staff. This includes all part-time and full-time employees, management salaries, overtime, and benefits that are paid out to your team. To calculate staff costs and overtime, make sure your front of house and floor managers are diligent about controlling scheduling costs. These should be planned out and controlled monthly.
 

Food and Beverage Costs

All food and beverage costs are calculated with the input of your chef and the general manager’s oversight. The bar’s costs are determined by the bar manager with the input of the bartender. Because this is the #1 opportunity for excess waste in your restaurant, it is critical that each team member responsible for calculating the costs of purchasing supplies understands the needs of the business, paying attention to times of high volume traffic and when traffic is slow.You want to make sure you have enough food to support your menu and offerings, but not too much that it goes to waste and you lose money.

Costs from Outside Vendors

These costs include linen table settings, uniforms, floor mats, kitchen equipment and supplies, cleaning products, restroom supplies and soap. Like with your food and beverage costs, ensuring that you understand your profit and loss on each of these items is crucial to not losing money on necessities.

How to Grow Revenue

While operating a restaurant includes daily expenditures, each position can contribute to increasing revenues for your business.

Host

Your host is the first point of contact with your restaurant. Hosts should be welcoming, great on the phone, understand the floor, understand the flow of guests and tables, waiters, and how to maneuver the floor. This person works in tandem with everyone else on the team to ensure that the guests first impression of your establishment is a positive and welcoming one. 

Waiter

Your waitstaff should have thorough product knowledge, being able to effectively sell and upselling items, including both wine and food. The waiters also execute the opening of wine, pouring champagne, provide recommendations and details about items, should be friendly, outgoing, open, properly groomed, and personable as they spend the most time with the guests, enhancing their experience throughout the duration of their visit, which has an impact on subsequent visits.

Bus Boy

Bus boys should be friendly and personable, good communicators, timely, attentive, and work in unison to help the waiters ensure water is full and that tables are cleared quickly

Bartender

Bar staff contributes to increasing revenue because they are responsible for upselling beer, wine, and other beverages through their product knowledge and ability to create a great guest experience by making great drinks. They should also be properly groomed and personable, as well as have food and menu item knowledge, be attentive and specifically observant of new people walking into the bar area.

Management

Your management team is responsible for the overall operations of the restaurant, from the P&L, to the supplies, scheduling of employees, and ensuring that everything under the roof is running smoothly. It is management’s job to ensure they bring on the right vendors who provide a service that benefits the restaurant, hire employees who have a vested interest in contributing to the overall success of the business, and making sure that everyone works in unison with one another. 

Need More Help?

Schedule a complimentary consultation. Zana Usher specializes in reducing employee turnover and increasing business revenue by starting with the basics.
 
In your consultation, you’ll receive an analysis of your business so you can easily identify where you’re struggling and pinpoint measurable ways to address these issues, resulting in increased revenue and a more successful business moving forward.