The Ultimate Guide on How to Run a Successful Restaurant Business

Successful Restaurant Business


The global pandemic is notorious for a single reason!

The reality is that most restaurant businesses are struggling for their survival way before that.

But it is a universal truth that victory and failure go hand in hand.

So don’t worry! If you want to start a restaurant but don’t know how to run a restaurant business that will become a big success, this article is for you.

“Opening and running a restaurant requires a great deal of capital.”

You may have heard the statement from a lot more people. However, they are correct, but only partially!

Beside capital, you will have to be careful about your execution. As a startup, even a small portion of your capital must be smartly utilized.

Modern restaurants are being empowered by digital sources. Given that, warding off unwanted expenses is easier now.

In the next few moments, this article will be your best guide on how to run a successful restaurant business. The main points of the discussion are:

  • What are the major business mistakes you can make as a restaurant operator?
  • What are the best suggestions for the successful operation of a restaurant?
  • How can you address challenges and try solutions?

Without further ado, let’s have the whole discussion begin.

Mistakes You Are Making, But They Are Correcting

The world leader in financial market and business news coverage, CNBC, mentions in one of its reports that over 60% of restaurants shut down before they could celebrate their first year of operation in the industry.

Businesses that were a little luckier were suffocated by severe challenges later on and eventually closed within the first five years.

So, what are the challenges? Ignoring them will almost certainly lead to the biggest mistake of your life. Have a look:

A Bad Business Location Stinks

A restaurant has higher chances of failing if its location isn’t appropriate for its operation and growth. Your restaurant must not be available somewhere in a shady place, exposed to lots of smell, dust, and debris.

It must be available in an open, fresh environment. But believing that they are finding a restaurant place with cheap rent, people often end up with disastrous outcomes for their business.

Even though your restaurant operates on an online food delivery business model, if an order is taking too long to reach a customer, expect nothing but disappointment!

Inexperience Wreaks Havoc

FOOD is the primary asset of restaurants. But some restaurants are still ignoring it and instead focusing more on their business expansion and investing more to sharpen their profile in the food industry.

Survival is difficult if your chefs are inexperienced and unable to produce food variety that matches the tastes and requirements of people.

The manager itself needs to learn how to run a restaurant business rather than setting higher expectations from staff, and it’s a bit of a sour truth!

Poor Allocation of Resources

Poor allocation of resources is a well-known silent killer and has been the biggest contributor to the closure of most restaurants so far.

However, the wrong selection of resources is the main source of trouble for most business models. Similarly, the wrong allocation of these resources is the investment chopper.

It will wipe out your entire investment capital and even profits, especially if your business has relatively low sales.

 Complex Menu

So many flashy items on the menu may look appealing, but they complicate the customer’s journey. They struggle to place an order, which results in more time spent at your restaurant but fewer sales.

In such events, restaurants will be crowded with more and more customers, but sales will stay comparatively low. Restaurants often overdue their menus; it even becomes a problematic situation when the morning, afternoon, and evening food items have been mixed up.

 Increased Turnover

An increased employee turnover rate isn’t a good sign for a restaurant. Traditionally, most food brands operated their businesses on trust.

Managers had trust in their employees, and employees as well were committed to their jobs. However, the same work culture still exists at most restaurants, but increased reliance can contribute to the permanent loss of a business.

For example, if some of the restaurant’s most trusted employees resigned and the entire business was based on their knowledge, profession, and dedication, their resignation could put the business in jeopardy.

There is no innovation, only tradition.

Ask any successful brand out there, How to run a successful restaurant business? You are probably going to get only one thing in the response: innovation.

Tech-enabled businesses are recording massive success in almost every industry. But those that are still propelled by traditional channels and conventional working principles have been facing a massive drop in their business and confidence level.

With the conventional method, since you can only scale a business to a specific limit, most restaurants shut down within the first few years of their operation.

There is a high probability that you are also about to sink your capital into the restaurant business if you are planning to start similarly to how those businesses started but failed.

But this guide doesn’t aim to de-motivate you at all.

As a result, we’d like to focus your attention on the remaining 80%—how did their business become successful? The secret lies in the mind-blowing tips discussed next in the article.

10 mind-blowing tips to transform your restaurant into a big success

Heading straight to the 10 mind-blowing tips that can guarantee big success for your restaurant! You may have used some of these suggestions for a long time.

Hence, you may need some fine tuning and a bit more carefulness now to make them more result-giving for you.

Without further ado, starting now, learn how to run a small restaurant business using ten amazing tips used by most successful restaurants.

1. Your food is your unique selling point.

When somebody asks you for the USP (unique selling point or proposition) of your restaurant, without any confusion, tell them, “My Food.”

You could also tell them about your fast food delivery service or a high-standard dine-in facility. But nobody will care about it in the end. It is just your food that will sustain your business in the toughest hours.

A visually appealing restaurant may attract customers only once, but the best food is a consistent source of income. So keep your restaurant’s USP centered around food.

Begin learning about the minds of customers as soon as possible. Which food items are popularly enjoyed by locals? When are your customers most likely to visit your restaurant? Do they love sweets in the morning or something spicy in the evening?

Keep your eyes on the customer’s behavior and their interest in food. A restaurant’s USP is its main way to impress customers and attract more sales.

Especially if more than 50% of your business’ sales come from online orders, you should strive to create tasty cuisine. Your item must be unique enough that customers are willing to wait an extra few minutes rather than order from a different source in case the order has been delayed.

2. Master How to Run a Business

According to the National Restaurant Association, the restaurant industry is witnessing a 30% failure rate. In other words, you can tell that one in every third restaurant loses the race and has to shut its doors at the end.

If you don’t want your restaurant to shut down before your dream comes true, make certain that you aren’t running it as a home kitchen but as a corporate business.

It is important for you to decide on an ideal quantity of food for a price that customers are willing to pay. Try not to be too greedy; the food must be priced mindfully so as not to exploit customers.

Also, adopt a professional working standard so that every time a customer visits your restaurant, they don’t get an overly unique working system. Doing so can contribute to confusion or hesitation among customers, which may end up preventing them from entering the restaurant.

As a startup, sometimes you will have to be the HR department of your business, and other times you will be handling the accounting, finances, and other boring administration of your business.

If you can afford it, consider hiring an HR or account manager. But keep your eyes on their activities. What are they doing? How productive has your company been since their arrival?

Analyze it, but without disturbing the peaceful environment of your restaurant.

3. Serve Well, But Wisely

Consider serving the best quality food, but not at the cost of taking up too much time, effort, and money creating a single food item. You should have a systematically planned food service system.

Such as naming your food items appropriately if they are quantity-based, e.g., small size pizza, medium size pizza, or family size pizza. This is to make certain that customers pay only for what they have ordered.

You can keep an extra option for toppings and charge additional fees for it, ensuring the customer isn’t in any fantasy after placing an order. They must understand what they are ordering in order for customers to develop trust in your restaurant.

It’s best if you become a bit creative with your restaurant’s menu.

It must be clutter-free; sentences must not mess up the whole layout. Be more cautious with your offline or physical menu, as editing will not only cost you a lot of money, but it will also waste your time.

Normally, restaurants with online portfolios or private applications don’t face any such troubles. If something is wrong with the menu, it is either corrected by automation (by the application itself) or by human intervention.

Alternatively, a restaurant owner can quickly correct the situation on his own.

4. Increase brand visibility.

You can rule the restaurant industry—not entirely, but definitely a specific portion of it—based on your branding. Perhaps your restaurant specializes in dinner menus, sweet treats, or light food (also known as healthy meals).

However, if your brand was obscured or didn’t make a strong enough impression in the customer’s mind, few people would remember it.

You should aim to find a logo for your brand that’s easy to remember, unique, and looks professional as a whole. However, the advice is less likely to work for your restaurant with conventional methods.

But if you operate at least 30%–50% of your business online, For example, if you use online food ordering systems or own a private restaurant app or website, you can fully utilize your brand’s logo, theme, and banner.

Not only should you use your brand imprints on these readily visible online sources, but receipts, order messaging, and emails should also bear your brand. It will provide your restaurant with maximum exposure to an audience.

Simultaneously, so that your brand is prioritized every time a customer places an order.

5. Do Your Math

You can increase your profit by 24% if inventory is taken regularly and in the required quantity. There must be no food waste in order to create the most profitable environment in the business at the lowest possible cost.

As a manager or owner of your restaurant, it makes sense to be better at some basic accounting and business calculations. Such as, by the end of a day, week, or month, you must figure out how much you are making. Mathematically, the calculation will go like this:

Revenue – Expenses = Net Income

It will give you a final figure for the net income your restaurant is generating for you on a daily, weekly, or monthly basis. Bear in mind that you are taking the right numbers into the calculation.

Learning through example

If your business makes $30,000 a month, your expenses are $25,000, and your net income will be-

$30,000 – $25,000 = net income

Monthly net income = $5000

But avoid turning your net income into net losses, which is probably going to happen when your business expenses are more than your profits.

Also, you must distinguish between your daily expenses, monthly expenses, and yearly expenses so that you can get a better idea of the major expenses that might be pushing your business towards unexpected losses.


To feel confident about your investment, you can take the following calculation into account:

ROI = [(Investment Gain – Investment Cost) / Investment Cost] X 100

The formula will show you how much money your company has made in terms of a percentage value.

6. Save for a ‘Rainy Day’

In the economic crisis or in some unfortunate business events, your business will make more losses than profits.

Moreover, you may be making more investments in purchasing new assets with an aim to create new footprints in other business sectors or expand your existing business horizons even further.

You will have to make certain that your investments are enough for the objective’s accomplishment. As a result, you should save a surplus rather than a portion of your profits in order to deal with future challenges more effectively.

Most restaurant operators or brand owners pay themselves a specific salary and retain the remaining revenue and net profits in their savings.

The consideration will provide you with the assurance that you are saving for “rainy days,” when you might be spending more than what you owe right now.

7. Social Media Marriage

Social media has created its own world over the past few decades. Ever since Mark Zuckerberg founded Facebook to connect with family, friends, and the world, new business opportunities have flourished for corporations and brands.

Youtube, Instagram, Twitter, and Linkedin have become mainstream sources for restaurants where they can market their businesses like a cyclone. After all, some great studies are encouraging factors.

A study by Lunchbox reveals that a whopping 48% of customers are following their favorite restaurant brand on at least one social media platform.

Similarly, 21% of people have responded that they often choose a restaurant based on a social media post. However, the figures exclude traffic from paid campaigns; otherwise, the figures are insanely higher.

As a serious entrepreneur or businessman, you should expand your social media operations. You must discover some great techniques to boost your social media engagement.

Over 91% of restaurants start with Facebook and 78% with Instagram to build their brand’s popularity. But you should aim to maintain a wider presence and have your restaurant’s name on multiple platforms.

This ensures your brand is remembered by the customer, who might not have been actively present on the previous platform but may be on the next one.

8. Consider staffing and management.

In response to the question of how to run a restaurant business successfully, experts recommend making your staffing and managerial activities more efficient and goal-oriented.

Your staff is the most valuable asset in your business. But make sure you don’t depend too much on them. You must be prepared for their resignation. They are free to leave your restaurant at any time; you have no control over them.

But you have control over your machines and data-driven technology. So increase your dependency on machines and computer-based systems. So that, in the future, if a staff position is filled by a new hire, business productivity and speed aren’t affected.

You must create a business environment and work culture that allows a new employee to easily adapt to the work environment and overall business ecosystem.

It’s worthwhile to integrate your business platform with POS systems for restaurants, encourage software-powered actions in business, and enjoy sustainable business growth.

9. Loyalty Programs! 

Your old customers promise the longevity of your restaurant’s life. There’s no guarantee whether your new customer will be a regular one, but there’s a guarantee that your existing customer will be.

Therefore, as far as possible, you should strive to engage your old customers with your business. You should value their visits and their continued purchases from your restaurant. For this purpose, you can offer them rewards, restaurant gift cards, and special prizes.

This little effort of yours will contribute to a sense of pride and achievement in the customer’s mind. As a result, they can be transformed into an organic marketer for your company.

10. Be data-driven.

Data-driven companies acquire 23 times more customers compared to those that are still relying on conventional principles. Not only this, the McKinsey Global Institute reveals that such businesses are 19 times more profitable as well.

It is for this reason that data-driven businesses are fully aware of their ongoing and upcoming challenges. These data lines moving on their screens clearly depict the major downfalls or rises in a business appearing on a particular day, event, or moment.

If sales have been declining over the past few weeks, data-driven insights will alert you to the best possible actions. Simultaneously, it will even aid in proactively rectifying the whole matter before it worsens.

Not only can you use data-driven insights for in-house activities, but you can even use them for business activities outside the kitchen. If you operate a food delivery business in addition to your dine-in restaurant, you can monitor a few metrics.

Such as, on average, how long delivery boys are taking to deliver a food item within 5- to 10-kilometer regions. Based on the given metric, you can build a disciplined work ethic for your food supply.


Now that you have learned how to run a restaurant business, delay no more. It’s time to master the art of running a successful restaurant using the techniques discussed above. However, one thing is certain: you will need a well-working digital platform to ensure a smooth working culture in your business. You will require a POS system, an application, or a business website to have all the above-stated techniques working properly. 

Don’t worry. You can get them all for free from App2Food’s online ordering system. So what are you waiting for? Go ahead and get more details.