How to Increase Revenue In a Restaurant: What to Know

As a restaurant owner, you may face the frustrating challenge of stagnating sales. It's common for businesses to hit a plateau, and the good news is that there are actionable steps you can take to reignite growth and boost your bottom line. This guide outlines practical strategies that can help increase your restaurant's revenue. 

Evaluating Your Current Business Model 

Before diving into changes, it is crucial to assess where your restaurant stands. To do this, evaluate key metrics such as sales trends, customer feedback, and operational efficiency to identify your strengths and weaknesses. Here are five key metrics to look at: 

1. Cost of Goods Sold (COGS): This measures the cost of producing the food you sell. Lowering the COGS without compromising quality directly increases profit margins. 
2. Table Turnover Rate: This indicates how quickly you can seat new customers. Faster turnover leads to more customers served and higher revenue. 
3. Average Check Size: This metric shows the average amount spent per customer. By tracking it, you identify opportunities to boost sales per guest. 
4. Customer Acquisition Cost (CAC): This shows how much you spend to attract each new customer. This metric gives you an idea of your marketing strategy’s effectiveness.  
5. Customer Retention Rate: This reflects how many customers return, offering insights into the success of your service, loyalty program, and overall dining experience. 

3 Tips for Improving Your Menu Offerings 

The menu is the heart of any restaurant, and optimizing it makes a significant impact on your revenue. Here are three tried-and-tested tips to drive sales with your menu:  

1. Showcase High-Margin Dishes: Make sure your menu emphasizes dishes with higher profit margins, especially those that are easy to prepare and have low ingredient costs. Highlight them as chef’s specials to draw attention to these dishes.  
2. Conduct Menu Engineering: Design your menu to encourage customers to spend more money. Use descriptive language for high-margin dishes, place popular items at eye level, and employ strategic pricing tactics like decoy pricing to increase the overall spend per customer. 
3. Sell Seasonal & Trending Items: Introduce seasonal or trending items to keep the menu fresh and exciting. Offer limited-time dishes or incorporate popular food trends like plant-based options or globally inspired flavors.

How To Upsell at a Restaurant 

Upselling is a simple and effective way to increase your average check size. If you have not already done so, train your staff to suggest complementary items, like premium sides, special drinks, or dessert pairings. Make sure they understand the benefits of upselling, both for customer satisfaction and restaurant revenue. 

Not sure how to upsell? Here are nine upselling opportunities to consider: 

1. Appetizers and Starters: Encourage guests to start with a small plate, such as a signature appetizer or bread service. 
2. Premium Sides: Suggest upgrading to premium sides like truffle fries, loaded mashed potatoes, or a fresh seasonal salad. 
3. Drink Pairings: Recommend wine, craft cocktails, or specialty non-alcoholic beverages that complement the meal. 
4. Meal Add-Ons: Offer protein enhancements (e.g., adding grilled shrimp to a steak or chicken to a bowl of pasta). 
5. Specialty Desserts: Highlight signature desserts or limited-time offerings to entice customers to indulge. 
6. Upgraded Spirits: Encourage guests to opt for premium liquor in their cocktails. 
7. Post-Meal Beverages: Offer after-dinner drinks like espresso, dessert wine, or a digestif. 
8. Shared Plates: Suggest family-style dishes or platters for larger groups. 
9. Combo Deals: Create bundled options that provide value while increasing the overall spend per table. 

How To Optimize Restaurant Table Turnover 

Maximizing table turnover is key to increasing revenue, but it must be done without making guests feel rushed. The key is to strike a balance between efficiency and hospitality. You want to create a comfortable dining experience for your guests, while optimizing the seating capacity. 

For efficient table management, make sure your staff is well-trained and will clear and reset tables quickly while maintaining attention to detail. Servers should take orders promptly, anticipate customer needs, and deliver food efficiently to keep the flow of service smooth. You can also use handheld POS systems or tableside ordering technology to speed up order processing.  

On top of that, reservations and waitlist management systems play a crucial role in minimizing downtime between seatings. Use restaurant table management software to optimize reservations, seating arrangements, and daily customer flow. Digital waitlists with text notifications allow customers to be out and about while waiting, reducing perceived wait times and increasing overall satisfaction.  

3 Ways to Expand Your Restaurant’s Offerings 

Exploring additional services is an excellent way to diversify your revenue streams and attract new customers. Here are three ways in which you can expand your offerings: 

1. Catering: Offer catering services for events like weddings, corporate lunches, or parties. This will attract new customers and maximize kitchen usage during off-peak hours. 
2. Delivery & Takeout: Offering food delivery and takeout significantly expands your reach. Make sure your menu is optimized for transport and use third-party delivery services like Grubhub and DoorDash.  
3. Special Events: Hosting live music nights, wine tastings, or themed dinners creates a buzz and drives traffic to your restaurant, especially during slow periods.

2 Ways to Use Technology to Improve Efficiency 

Modern technology improves both back-of-house operations and customer-facing experiences. Here are two solutions that every restaurant needs: 

1. POS Systems: Modern POS systems streamline order processing, reduce errors, and provide real-time sales data. With a modern POS system, you can optimize your menu offerings and improve operational efficiency. 
2. Online Ordering & Mobile Payments: These platforms allow customers to order online and pay with mobile apps. They provide convenience to customers and shorten waiting times.

Improving the Customer Experience 

Customer satisfaction is directly tied to revenue growth—when guests have a positive dining experience, they are more likely to return, leave favorable reviews, and recommend the restaurant to others. High satisfaction levels also lead to increased spending per visit, as happy customers are more open to upsells and premium offerings.  

In today’s digital landscape, where online reviews and social media influence dining choices, delivering a consistently excellent experience is crucial. To achieve this, many restaurants are turning to service innovations to create unique, memorable moments for guests. Here are four strategies to implement at your restaurant:  

1. Personalized Greetings: Acknowledge returning customers by name, remember their preferences, and celebrate special occasions with a personalized note or surprise. 
2. Special Perks: Surprise guests with complimentary amuse-bouches, custom cocktails, or small gestures like offering a free dessert on a guest’s birthday. 
3. Themed Dining Experiences: Offer immersive experiences like wine-pairing dinners, seasonal menus, or cultural culinary events for a sense of excitement and exclusivity. 
4. Interactive Dining: Introduce chef’s tables, open kitchens, or communal dining options to engage customers in the food preparation process and create a sense of connection. 

2 Marketing Strategies To Drive Traffic to Your Restaurant 

A restaurant is not just about the food. Effective marketing is key to attracting new customers and retaining existing ones. Here are two marketing strategies to grow your restaurant: 

1. Digital Marketing: A strong online presence—via social media, email newsletters, and an easy-to-navigate website—helps you reach a broader audience. Use targeted ads to attract local customers and engage with followers through regular content. 
2. Loyalty Programs: Loyalty programs incentivize repeat business by rewarding customers with discounts or free items after a certain number of visits. This encourages repeat business and increases the likelihood of customers spending more per visit. 

How To Control Costs Without Cutting Corners 

Managing operational costs effectively is essential for maintaining profitability without sacrificing the quality of service or food. Here are four tips for managing costs while keeping standards high: 

1. Optimize Staffing Levels: Avoid overstaffing by scheduling based on forecasted demand, and cross-train employees to take on multiple roles during slower hours. 
2. Negotiate Supplier Contracts: Work with suppliers to secure bulk discounts or long-term contracts. This reduces costs on frequently used ingredients or materials. 
3. Review Menu Prices Regularly: Make sure that menu prices reflect ingredient costs, seasonal changes, and market trends, adjusting them as necessary to maintain healthy margins. Adjust them as necessary to maintain healthy margins without sacrificing value. 
4. Invest in Energy Efficiency: Reduce utility bills by upgrading to energy-efficient appliances, using LED lighting, and optimizing HVAC systems for peak efficiency.

In addition to these operational strategies, another key area to focus on is inventory management. Many restaurants struggle to maintain the right balance of stock, but mastering this leads to significant cost savings. Here are five strategies to improve your restaurant’s inventory management: 

1. Implement Inventory Tracking Software: Use restaurant inventory management software to track inventory levels in real time, helping to spot trends, forecast needs, and avoid over-ordering. 
2. First-In, First-Out (FIFO) Method: Make sure older products are used before newer stock to minimize spoilage and waste. 
3. Regular Stock Audits: Conduct frequent checks to identify any discrepancies, track waste patterns, and adjust purchasing practices accordingly. 
4. Portion Control: Standardize portion sizes to reduce food waste, ensuring consistent pricing and customer satisfaction. 
5. Repurpose Ingredients: Get creative by repurposing leftovers or ingredients that may be close to expiry to create new dishes or specials, rather than discarding them.

Analyzing Competitors and Market Trends 

As a restaurant owner, you need to keep an eye on your competitors and market trends to stay ahead of the curve. Regularly assess what nearby restaurants are offering, their pricing, and their promotions. This can help you identify gaps in the market and differentiate your restaurant from the competition. 

On top of that, stay updated on emerging trends in the food and beverage industry. For example, the increasing demand for plant-based options or health-conscious dining can inspire new menu offerings for your restaurant. 

Frequently Asked Questions About Increasing Revenue in a Restaurant 

There are more ways to grow your restaurant’s revenue! Below, we address some common questions about revenue growth strategies and offer actionable insights to help you increase sales and maximize profitability. 

How do you increase the revenue of a restaurant? 

Increasing revenue in a restaurant involves a multifaceted approach, from optimizing the menu to improving service and expanding your offerings. Key strategies include menu engineering to emphasize high-margin dishes, training staff on upselling, and exploring additional revenue streams like catering or delivery.  

Additionally, leveraging technology such as efficient POS systems and digital marketing tools helps streamline operations and attract more customers. Improving customer experiences by offering loyalty programs and personalized service, also encourages repeat business, which is essential for long-term revenue growth. 

What makes the most profit in a restaurant? 

The most profitable items in a restaurant are high-margin dishes, such as appetizers, drinks, and desserts. Alcoholic beverages, particularly cocktails, often provide the highest profit margins due to their low cost of goods sold compared to food items. Additionally, side dishes and premium upsells, like wine pairings, boost profits without significantly increasing the restaurant’s overall food cost.  

What is the quickest way to increase sales in a restaurant? 

One of the quickest ways to increase sales in a restaurant is by implementing effective upselling and cross-selling techniques. Train your staff to suggest premium items, such as drinks, sides, or desserts, to quickly boost the average check size.  

Additionally, offering limited-time promotions or seasonal menu items creates a sense of urgency and attracts new customers. Utilizing digital marketing strategies like social media promotions or targeted ads also draws in more foot traffic.  

What are the 4 stages of upselling? 

The four stages of upselling in a restaurant are:  

1. Introduction: Where the server greets the customer and gauges their preferences.  
2. Recommendation: When the server suggests complementary or higher-priced items based on the customer's order. 
3. Objection Handling: Where the server addresses any hesitations or concerns. 
4. Confirmation: Where the server confirms the additional items with the customer and finalizes the order. 

When you master the four stages above, you’ll be able to upsell customers naturally and effectively. 

What is cross-selling in a restaurant? 

Cross-selling in a restaurant is the practice of recommending additional products or services that complement the customer’s current order. For example, suggesting a dessert after a main course, or offering a drink pairing that enhances the flavor of the meal.  

By cross-selling, you aim to increase the customer’s total bill by introducing items that improve their dining experience. Like upselling, effective cross-selling involves understanding the customer’s preferences and offering relevant, well-timed recommendations. When done right, cross-selling not only boosts sales but also creates a more personalized and satisfying experience for the customer. 

Growing Your Restaurant’s Revenue 

Increasing revenue in a restaurant requires a comprehensive approach—optimizing the menu, improving customer service, leveraging technology, and diversifying income streams. Take a critical look at your restaurant to identify the low-hanging fruit, then experiment with different strategies to find what works best for you. 

If you’d like some expert advice in growing your restaurant, contact us to learn more. Alternatively, read our 2024 Loyalty Trend Report to understand how to keep customers engaged and coming back for more.