Millions of people dream of opening a restaurant, but running a restaurant of your own is a big step—and a huge accomplishment! As you know, the work doesn’t end at opening; figuring out what does and doesn’t work in a restaurant is a job of its own, not to mention understanding what it takes to expand to make your business bigger and better.

Our goal is to equip you with the right tips and tools that can help your business grow. We reached out to a successful restaurant franchisee based in the Midwest US to put together a list of crucial tips and practices that can help your business flourish. Their advice? Focusing on your operational costs can be the key to keeping your restaurant financially afloat and thriving for years. We’ve compiled eight tips for managing your new restaurant, all centered around operations—the backbone of your restaurant’s success.

#1: Prioritize labor and COGS

If you want to succeed, the two most important things you need to focus on are your labor costs and your costs of goods sold (also known as COGS). They’re the first things you need to pay close attention to when operational prices increase, no matter what type of restaurant you have or how large it grows. Having a strong understanding of these two areas will give you an advantage over your competition by enabling you to unlock revenue-generating opportunities.  

The best way to keep a close watch on this is through data. Insights like sales forecasts and average check size can help you understand your operations in greater detail—you can even see how the weather can affect your store traffic. When you analyze your restaurant's success through charts and percentages, you'll get an accurate glimpse of where you need to spend more time, resources or money.

#2: Build an engaged staff that delivers on your restaurant vision

Your staff is critical to your restaurant’s success. They manage most aspects of the customer experience, from the server taking guests’ orders to the chefs making their meals. Because of this, a good staff keeps your restaurant in good standing with guests and helps protect your margin.  

If you want to hire people who care, you need to give them benefits that will make them want to work for you. Whether it’s offering a competitive wage or allowing for flexible hours for school pickup, granting perks that make your staff’s lives easier will make them want to work for you. Improving work-life balance will incentivize Millennials and Gen Z employees to continue working for you. Not managing your labor increases the risk of turnover, and since it costs more money to hire new than it does to maintain the staff you already have, this can pose a threat to your bottom line. You’d have to advertise the position, spend time away from the floor to interview and sift through candidates all in addition to cost of lost productivity with a too-small staff and the new employee’s salary. To learn more ways you can reduce turnover, be sure to check out our article on the topic.

#3: Prioritize health and safety standards

The best tasting food is the freshest and cleanest. Make sure you label the date you bought everything (and how long it should last). Take a FIFO (first in, first out) approach—the first of any ingredient you received should be the first that you sell. Understanding your inventory is key to ensuring you limit your food waste.  

Then, with every meal you prep, make sure you’ve hired someone who’s certified in food safety. Every restaurant has safety requirements that they must follow, and you must have at least one manager who’s ServSafe certified.  

Guests want to know that they’re going into a clean restaurant. Make sure they feel safe. Clean the front of house every day, make sure chefs are regularly washing hands and always have your sanitation score displayed clearly for your guests to see.

#4: Understand food costs and customer spending

There’s a lot that goes into food costs. Making a profit is more than just charging more than what you paid for the ingredients. Before you can set menu prices, it’s important to take a holistic view of your operations, costs, and customers.  

Who is your target clientele for your restaurant? What are their spending habits and buying behaviors? What are their interests and pain points? What are they looking for in a dining experience? Going through these questions and identifying the answers leads you to building personas, or a fictional (but accurate) representative of the people who’ll come to your restaurant.  

Everything from price to promotion should make sense with your customer personas. For example, if you’re a pizza joint that has a family atmosphere, prices must be attainable for a family. If you have a formal restaurant, your prices can reflect an elevated experience.

#5: Keep your ear to the ground

Stay connected to the restaurant industry locally, regionally and nationally. This could be getting involved with your state restaurant association, or maybe a more local organization with other business owners. This could also be subscribing to reputable industry news and insights. Keeping connected with your industry peers can have a direct impact on your business: it can help you to earn more money (like trying a new menu item based on a popular ingredient) or prevent unsafe situations (such as alerting you when an ingredient is recalled).

Take five minutes a day to look up restaurant news. Many websites offer free information straight to your mailbox when you submit your email. Owning a restaurant shows that you already have an understanding of the business, but constantly learning will keep you sharp and your restaurant competitive against any new restaurant concepts or trends.

#6: Manage inventory more efficiently

Maintaining inventory can seem time-consuming if you aren’t leveraging technology to optimize the time you spend. Consider investing in a software platform that can manage what you have in stock. Regardless of how you do it, it’s vital for you to manage everything that comes in and out of your restaurant; your inventory is the centerpiece of your COGS, which is tied directly to your business’s earnings and profit margin.  

Managing your inventory can help you during a food shortage. For example, when Castellucci Restaurant Group noticed there was a soda syrup shortage, they looked at their inventory and saw an opportunity to order bottled soda instead to avoid creating a diminished experience for their customers. Monitoring your inventory closely helps you eliminate waste. If a certain product is consistently going unsold, you can adjust your menu accordingly, saving money and addressing inefficiency. You can gain insight that helps you unlock money-generating ideas—all by understanding your inventory.  

#7: Focus on creating great customer experiences

While many of the previous points are the building blocks that will help you to better operate your business, when it comes to building a successful business, focusing on the customer experience is key. First, ask yourself: what does the ideal customer experience look like in my restaurant? This could be the feeling customers have when there, or it could be the parts of the interaction that are distinct from other dining experiences.  

At a foundational level, keeping your restaurant clean, having motivated and energized staff and pricing food appropriately will immediately position your restaurant to offer your customers better experiences. But going beyond the basics, it’s important to understand your end goal for the customer experience and then determine a strategy to deliver on that consistently.  

#8: Choose the right technology to help, not hinder, the restaurant experience

Running a restaurant can be more than a full-time job. From managing employee schedules to promoting your business, to keeping up with new customer trends and handling inventory, you must wear multiple hats to keep your business afloat.

Having the right restaurant POS streamlines the guest interaction and payment experience so that you and your staff can spend more time doing what matters the most: crafting memorable experiences for your guests. These operational tips will help you take your business to new heights—and it all starts with an effective POS. Learn more about Aloha Could today.

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