Average Restaurant Revenue: 23 Tips for Improving Performance

A profitable restaurant business means it generates more income than it spends. It will also have a comfortable financial safety net as well as the freedom to experiment with new menu items and marketing techniques.   

Yet, boosting your average restaurant revenue is an ongoing task. You must respond to shifts in consumer demand and market fluctuations, all while continuing to provide top-notch service to your loyal customers. The key to improving your average revenue for long-term growth is to first establish a baseline of quality business and financial practices.  

In this article, we’ll take a deep dive into how you can set up a strategy to optimize and strategize restaurant revenue to boost income and drive business growth. 

What is Average Restaurant Revenue? 

To calculate how much revenue your restaurant makes, first aggregate its total income, including all in-store and online sales, over a week, month, or year. Determine the average check amount then multiply this amount by the number of sales in your chosen time period, so it looks something like this: 

Number of sales x average order value = total restaurant revenue 

Depending on your type of restaurant, you’ll approach profit calculation differently. Businesses like fast food restaurants, food trucks, quick-service restaurants, or casual dining establishments generally see more customer turnover and less per-check spending. On the contrary, fine dining restaurants see fewer guests but higher checks on average.  

That means a food truck may measure its average monthly revenue because it has more turnover and more per-order data to use. But a fine dining establishment may need several months’ worth of data because it has less traffic.  

7 Factors Affecting Restaurant Revenue 

The restaurant type is just one factor that impacts your revenue. It’s important to take these seven influences into consideration: 

1. Location: Revenue may vary depending on if your restaurant is in a crowded and bustling city or in a more rural small town.  
2. Online Ordering: Allowing customers to place orders online for pickup or delivery introduces another avenue of income and expenses. 
3. Menu Pricing and Selection: Your menu items impact how much you spend on inventory, which are expenses reflected in your revenue stream. 
4. In-Person Capacity: Your restaurant’s dine-in capacity determines how many customers you can serve at once.  
5. Customer Service: High-quality customer service encourages guests to return to your establishment, increasing overall revenue and per-check spending.  
6. Dining Experience: An on-brand and comfortable dining experience makes visiting your restaurant enjoyable for guests and prompts them to return. 
7. Marketing Strategies: Data-driven marketing campaigns help you connect with the right audiences, increasing restaurant traffic and sales.  

Strive to tailor your restaurant to your target audience’s desires. Market research and customer feedback are the best ways to gain these insights.  

You can use market trends to identify what today’s customers want from their dining experience. Likewise, seek input from your current guests to understand which parts of your business they enjoy most and if there is anything they wish you would add.  

These are great strategies to connect with your unique audience and continue to drive revenue through customer satisfaction. 

4 Steps to Analyzing Your Restaurant’s Revenue 

Follow these four steps to analyze your restaurant’s revenue: 

1. Decide How Long to Measure Revenue: Determine if it’s most beneficial to track revenue over a week, month, or year. 
2. Establish a Reliable Means of Tracking Revenue: You need a central location, such as a POS system, to track and store all your income data.  
3. Determine Your Key Performance Indicators (KPIs): Name the metrics you’ll track, including gross profit, cost of goods sold, labor costs, and customer traffic. 
4. Organize Data to Create Actionable Next Steps. Based on your KPIs, categorize your metrics to build data-driven strategies to drive revenue. 

For long-term revenue growth, it’s essential to make data collection a standard practice. With robust historical data, you can make more accurate predictions for the most effective revenue-driving techniques for your business.  

5 Strategies to Boost Restaurant Revenue 

Once you have good restaurant revenue data on hand, it’s time to put it to use. Use these five strategies to drive your restaurant revenue: 

1. Run Personalized Marketing Campaigns: Leverage data to understand which messaging, offers, and platforms resonate most with your audience. Then, focus your marketing efforts there. 
2. Optimize Your Menu: Track which menu items customers love and place them front and center. If there are items with a low order rate, consider replacing them with something guests may enjoy more. 
3. Boost Customer Experience: Whether online or in-person, a top-notch customer experience makes it more likely for guests to return and recommend your restaurant to others.  
4. Roll Out a Loyalty Program: A loyalty program rewards repeat customers with exclusive deals, offers, early access to new menu items, and more.  
5. Try Online Ordering or Delivery: Offer customers the option to order online for pickup or delivery to expand your restaurant’s revenue-generating opportunities. 
   

Net profit margins are a key part of your revenue. To calculate them, you must first know your cost of goods (COGS) for every item sold. Subtract the cost of a menu item from its income. The resulting amount is its profit margin.  

Pro Tip: Don’t forget to use your expenses to decide how you price each menu item. That way, you see higher profit margins on every purchase. 

The Role of Marketing in Increasing Restaurant Sales 

Marketing campaigns help you connect with your target audience and build a compelling public perception of your brand—both help drive average revenue figures. You can leverage strategic traditional advertising as well as digital marketing initiatives with the help of restaurant marketing software. Here are five ideas for how to use marketing to increase restaurant sales: 

1. Reward Your Loyal Customers: Encourage guests to return by rewarding them with exclusive deals and offers with each visit. 
2. Run Personalized Email Campaigns: Curate email campaigns to individual guests based on their purchasing habits. 
3. Engage Customers on Social Media: Plan giveaways, contests with gift card rewards, or other social media engagements to interact with customers personally.  
4. Leverage Local SEO: Strong local SEO makes your business rank higher in the search results for restaurants in your area. 
5. Collaborate with Local Businesses: Team up with nearby businesses to promote each other and reach a new audience.  

Key Insight: Understanding your audience is crucial to any marketing strategy. You need to know what drives customers to make a purchase from your restaurant, which deals might prompt them to make an extra visit, and how to connect with them over shared values. 

3 tips for Optimizing Operational Efficiency 

A high operational overhead lowers your total revenue. Luckily, your restaurant’s behind-the-scenes operations are entirely in your control. Here are three tips to reduce operating expenses and boost revenue: 

1. High-quality Team Training and Communication: Ensure your entire team knows your internal workflows and set up reliable communication methods to keep everyone on the same page.  
2. Strategic Inventory Management: Based on inventory purchasing and usage data, strategize when you reorder to avoid overspending or food waste. 
3. Use Technology to Streamline Transactions: Streamline your internal operations by using point-of-sale (POS) software, inventory management tools, payroll solutions, employee time tracking, and more.

Your aim here is to strike a balance between efficiency, cost savings, and customer satisfaction. In short, you want to provide the best experience for your guests while keeping costs low.  

6 tips for Improving Customer Experience to Increase Revenue 

A great customer experience brings guests back to your restaurant again and again. Use these six tips to provide a high-quality experience for your guests: 

1. Establish a Clean Restaurant: Ensure a neat atmosphere for customers by keeping a clean table setting, sweeping the floor, and fully stocking the bathroom.  
2. Great Customer Service: Train your staff to engage with customers and handle conflicts so that every time a customer interacts with your restaurant, they have a good experience.  
3. Take Advantage of Technology: Efficient online ordering and delivery tools, POS systems, mobile apps, and marketing software are all examples of technology that can enhance the customer experience.  
4. Engage with Guests: Find creative ways to engage with customers beyond dining in your restaurant, such as social media or local events.  
5. Gather Customer Feedback: Ask customers what they would love to see from your business. This will help you provide them with a desirable experience.  
6. Create an Enticing Menu: Add new seasonal menu offerings alongside fan favorites to keep guests excited about trying something new.  

Not only is a satisfied customer more likely to return to your restaurant repeatedly, but they may also recommend your restaurant to their friends and family, which increases your brand awareness.  

5 Insights for Diversifying Your Revenue Streams 

Here are five ideas to diversify your revenue streams: 

1. Explore Branded Merchandise: Sell branded mugs, T-shirts, keychains, or other items in your restaurant or a local store.  
2. Set Up Online Ordering and Delivery: Allow customers to order online for pickup or delivery to expand how you generate revenue.  
3. Create a Loyalty Program: A rewards program encourages repeat visits and higher bills, so customers may spend more than the average guest.  
4. Run Cooking Classes or Workshops: Offer unique cooking classes where guests can learn something new and get to know your brand. 
5. Start Catering Local Events: Catering local events to help boost brand awareness and open another revenue stream.  

Diversifying your revenue streams means spreading out the ways your restaurant generates income. It helps avoid risks associated with relying on one source.  

Frequently Asked Questions About Average Restaurant Revenue 

Keep reading for our answers to common questions about restaurant revenue.  

What is the average restaurant revenue? 

The average restaurant profit margin will vary depending on its style. In the United States, the average revenue is 3-5%. 

Can I open a restaurant with $100,000? 

It’s possible to open a restaurant with $100,000. However, it’s a tight budget and you may need to prioritize which parts of the business you invest in.  

What is a good operating profit for a restaurant? 

A healthy profit margin for a business in the restaurant industry is 5-10%. However, depending on the restaurant style, it tends to be less on average.  

What’s the failure rate of restaurants? 

Contrary to popular belief, more than 80% of restaurants survive their first year. By the time a restaurant reaches the five-year mark, only about half are still in business. 

How much does a small restaurant make a day? 

A small restaurant can earn between $1,500 and $5,000. Factors like location, time of day, and type of restaurant impact daily revenue.  

Making Your Average Gains the New Normal 

With greater visibility into your restaurant revenue, you’ll make confident decisions when fostering its growth. You can actively manage your restaurant revenue by finding creative ways to boost it, like introducing loyalty programs or selling branded merch. Based on your goals and target audience, leverage the ideas we’ve outlined here to create sustainable revenue streams for long-term profitability and growth.  

For restaurant owners experimenting with these new ideas, take advantage of the resources available to streamline the process. With abundant information and efficient technology, Paytronix makes connecting with your audience to encourage healthy revenue streams simple. Schedule a demo with our team to learn how Paytronix can support your revenue goals.