8 Best Practices in Restaurant Operations That Will Improve Profits

8 Best Practices in Restaurant Operations That Will Improve Profits
Restaurant Management - January 04, 2024 Written By: Krista Dinsmore

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When it comes to running a restaurant, profit margins are notoriously slim and the challenges are vast. In many cases, success hinges on an establishment's ability to deftly balance cost and quality.

The margin for error is small; a few missteps in management can be the difference between a thriving enterprise and a struggling one. It's an environment where the relentless pursuit of operational efficiency becomes not just a best practice, but a tactic for growth and success

From managing perishable inventory and navigating fluctuating supply costs, to optimizing labour and delivering impeccable service, every operational area of your restaurant is critical to the overall success of your business. 

To help you navigate this ongoing challenge for profitability and competitiveness, we’ve listed eight best practices that will help your business achieve operational excellence and return on investment. 

Best Practice #1 -  Optimize Your Menu

Your menu is not just a list of dishes; it's a strategic tool that can enhance your profits. A well-designed menu highlights high-margin items and encourages customers to choose dishes that maximize your profits. 

Use psychological tricks like placing expensive items at the top of the menu to make other prices seem more reasonable. Additionally, regularly analyze which dishes sell well and have the highest margins, and adjust your menu accordingly.

For more information on how to do this, check out our blog ‘Restaurant inventory: How Menu Engineering Can Boost Your Profits’.

Best Practice #2 - Implement an Inventory Management Strategy With Technology

Inventory control is a crucial element in a restaurant’s operation. In fact, your inventory has a huge say in how profitable your business is. Overstocking leads to waste, while understocking can mean lost sales. 

By utilizing an inventory management system, you can keep track of stock levels in real time, predict future demand based on historical data, and set up automatic reordering points (PAR level). Sculpture Hospitality's specialized inventory management solutions can particularly streamline this aspect of your operations, saving you time and reducing waste.

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Best Practice #3 - Focus on Employee Training 

Staff training is essential for efficient restaurant operations. A well-trained team not only performs better, but also provides superior customer service - leading to repeat business. Implement a training program that includes not only the basics of service but also your restaurant's specific systems and expectations. Regularly updated training can keep employees engaged and informed about new promotions or menu items.

Best Practice #4 - Leverage Technology for New Efficiencies 

Incorporate technology to streamline operations. Point of sale (POS) systems, for instance, can speed up transactions, track sales, and analyze customer preferences. Reservation and ordering apps can improve the customer experience and reduce the burden on staff. Digital tools for scheduling can help manage labour costs more effectively by aligning staff schedules with customer traffic patterns.

Here are 5 Must-Have Restaurant Technologies to Improve Business Performance.

Best Practice #5 - Prioritize Customer Service

Exceptional customer service is a hallmark of a successful restaurant. Every interaction, from greeting to payment, should be an opportunity to impress the customer. Empower your staff to make decisions that enhance the customer experience, such as comping a meal if a mistake is made or offering a free appetizer to a table that had to wait too long.

Best Practice #6 - Enhance Your Marketing Efforts 

A robust marketing strategy can help attract new customers and retain existing ones when done right. Utilize social media platforms to engage with your audience and share compelling content about your restaurant. 

Email marketing can also be used to inform your customers about promotions or events. Don't forget the power of word-of-mouth; encourage satisfied customers to leave positive reviews online. Reviews go a long way in gaining new customers.

Best Practice #7 - Monitor your Financials Closely 

Understanding your restaurant's financial health is critical. Keep a close eye on key performance indicators (KPIs) like food cost percentage, labour cost percentage, and table turnover rates. Regular financial analysis helps identify areas where expenses can be cut without compromising the quality of food or service.

Best Practice #8 - Cultivate a Positive Work Culture 

A positive work environment leads to happier staff, which in turn leads to happier customers. Encourage a culture of open communication, recognize employee achievements, and provide opportunities for advancement. Happy employees are more likely to stay with your restaurant, reducing turnover costs and maintaining service consistency.

Interested in learning more about how you can improve your restaurant’s profitability, particularly through better inventory control? Get in touch with Sculpture Hospitality today. Our team of inventory management and hospitality industry experts would love to discuss best practices in restaurant operations. 

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A Complete Buyer's Guide to Food & Beverage Inventory Management Systems

With around 25 to 35 percent of a restaurant’s operating budget dedicated to purchasing food (that’s not even taking into account beverage inventory costs for the bar), proper inventory management can significantly improve expected revenue.

To maximize profits you need to improve visibility and control over your restaurant or bar’s inventory. 

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