10 Tips to Improve Restaurant Operations

Running a restaurant has never been easy, but in today’s market it can feel like navigating an obstacle course of delivery apps, social media profiles, and trending culinary crazes. To stay competitive, restaurateurs need to juggle rising costs, fierce competition, and rapidly shifting customer tastes, all while maintaining healthy profit margins.

To thrive under these pressures, restaurant owners and managers must continuously assess and improve their operations, vigilantly searching for places to increase efficiency and trim costs while finding innovative ways to serve their customers. This article outlines 10 tips to help restaurants enhance their business performance.

What Are Restaurant Operations?

Restaurant operations encompass all the decisions, processes, and workflows involved in running a restaurant, from menu development and food preparation to staff management and customer service. These operations directly affect the quality of customer interactions, influencing factors such as service speed, food consistency, and atmosphere. By effectively managing their operations, restaurants create a memorable and satisfying customer experience while also ensuring that the business remains profitable and competitive as the food service industry evolves.

More specifically, restaurant operations include day-to-day tasks that directly affect customer meals and service, including ingredient quality and staff training, as well as more indirect aspects, such as decor choice and table layout. By prioritizing operational improvements, restaurants can eliminate bottlenecks, reduce costs, and improve customer satisfaction. This, in turn, helps foster a positive reputation, encouraging repeat business and driving long-term success.

Key Takeaways

• Restaurant operations encompass all aspects of running a restaurant, from inventory management and staff training to customer service and financial planning and management.
• To optimize their operations, owners and managers can assess current practices, train staff, prioritize quality and safety, leverage technology, and respond to industry trends and local community needs.
• By focusing on operational efficiency, restaurants can eliminate bottlenecks, reduce costs, and build a strong brand reputation without compromising the high-quality experiences their customers expect.

Improving Restaurant Operations Explained

To maintain and grow their restaurants’ market share, managers must embrace new trends and best practices without driving away long-term customers, with their own expectations and preferences. It’s important to regularly take stock of what’s working well and where improvements can be made.

To identify areas for improvement, restaurateurs must critically evaluate current practices, look for inefficiencies, and analyze the data they gather from point-of-sale (POS), customer relationship management, (CRM), inventory management, and other systems. This data helps restaurants gain valuable insights into customer behavior, menu performance, and supply chain efficiency, helping owners and managers make informed operational decisions when allocating resources and managing staff. Through this cycle of continuous improvement, restaurants can reduce waste, increase profitability, and consistently deliver high-quality dining experiences, even as they expand operations and bring in new customers.

What Do Restaurant Operations Entail?

Restaurant operations encompass a wide range of responsibilities, processes, and workflows. While each restaurant has unique challenges and priorities based on its concept, target audience, location, and other factors, there are several key, overlapping areas that most restaurants typically look to when planning operational improvements. These areas require careful coordination.

• Menu development: Menus should balance customer preferences, operational capacity, and cost-effectiveness. Menu pricing should consider all associated costs, including procuring and storing ingredients, as well as the labor, time, and complexity of preparation.
• Customer service: A high-quality dining experience encourages repeat business and positive customer reviews.
• Staff management: A well-trained and scheduled team can consistently deliver excellent service and maintain operational standards.
• Inventory control: Tracking and managing stock effectively reduces waste while helping ensure ingredient availability. Proper inventory control also includes throwing away expired goods.
• Food preparation: Standard protocols and recipes help restaurant staff meet quality and safety standards when preparing meals.
• Financial management: The financial health of a restaurant depends on carefully managed costs and revenues. This includes regular cost-benefit analysis for menu items when prices change or new dishes are introduced, as well as assessing expected returns on investment and other business endeavors.
• Marketing: Strategic marketing efforts can help restaurants attract new customers and retain existing ones. Establishments must monitor the success of promotional campaigns to track financial returns and inform future strategies.
• Compliance: Following health, safety, and labor regulations protects customers, employees, and the business as a whole.
• Technology integration: Specialized systems for reservations, ordering, and operations management can enhance operational processes. Many of these systems can be tailored to serve specific needs, so restaurant businesses should carefully choose which systems to implement and regularly adjust them as their requirements evolve.
• Cleanliness: A clean, well-maintained restaurant is more likely to be up to regulatory standards. According to a 2022 Omnibus survey commissioned by P&G, more than 90% of Americans expressed the importance of a visibly clean restaurant when dining indoors or outdoors or ordering takeout.

Goals of Restaurant Operations Management

Restaurant operations management focuses on three primary goals: Maintain efficient processes, expand profitability, and satisfy evolving consumer demands. Let’s explore how a business can improve these three goals through an example.

A midsize urban bistro is struggling to maintain profit margins in the face of rising prices. The owner decides to implement new inventory management and POS systems to automate several processes that were slowing down operations. The new inventory system tracks stock levels in real time and automatically reorders supplies when they fall below a predetermined level, minimizing ingredient shortages and reducing the inflated shipping costs associated with last-minute supply orders. The POS system, meanwhile, allows servers and customers to send orders directly to the kitchen from a device on the table, streamlining the ordering process, reducing errors, and freeing up staff to focus on delivering prompt and attentive service by minimizing foot traffic to and from the kitchen.

These improvements reduce bottlenecks, helping the bistro improve profitability without compromising its unique atmosphere, menu offerings, or overall dining experience. Additionally, these systems collect and organize sales data, giving restaurant owners and managers detailed insights into menu performance and customer preferences to help them refine their strategies.

10 Tips to Improve Restaurant Operations

Improving restaurant operations is an ongoing process that requires careful planning, execution, and adaptation. While owners and managers should choose strategies that address their restaurants’ unique challenges and goals, they can follow these 10 tips to guide performance improvement.

1. Assess Current Operations

   Restaurants can’t fix what they can’t see. Therefore, the first step in improving operations is to determine existing strengths and weaknesses through a combination of internal and external metrics.

   • Conduct a thorough operations audit to evaluate all aspects of the restaurant, either through internal key performance indicator (KPI) analysis or an external auditor. Then prioritize where improvements will be most effective and yield the largest investment return.
   • Identify bottlenecks that slow down service or increase costs, such as long ticket times or inventory discrepancies.
   • Collect feedback from staff and customersthrough meetings, surveys, complaint/suggestion boxes, and online reviews to gain a comprehensive understanding of performance.

2. Optimize Staff Management

   Restaurants should invest in effective hiring, training, and management practices to ensure consistent, high-quality service. This is increasingly important in the food service, retail, and hospitality sectors. In a 2023 Axonify survey of managers in those sectors, 54% of respondents said it’s becoming more difficult to find skilled workers.

   • Establish hiring and training best practicesto attract, onboard, and retain top talent. This is a valuable way to stay ahead of the competition in a tight labor market.
   • Implement scheduling and labor cost management tools and protocols to accurately forecast demand and plan shift schedules and labor costs. This proactive planning helps optimize staff levels to maintain profitability without compromising quality service.
   • Foster a positive work culturethrough open communication and collaborative problem-solving to boost morale and reduce turnover.

3. Streamline Inventory Management

   According to ReFed, a US-based nonprofit, food service companies created 13 million tons of food waste in 2022. By minimizing this waste, restaurants can create a more sustainable operation while reducing the costs, time, and labor associated with removing waste.

   • Implement a robust inventory system that monitors stock levels in near or real time, automates purchase orders, and alerts relevant staff when items are running low and/or approaching expiration dates.
   • Reduce food wasteby training staff to properly handle, store, and prepare food, minimizing spoilage and waste. Additionally, monitor customer waste to track which dishes are often left unfinished, informing future portion and menu adjustments.
   • Evaluate and negotiate with suppliers to assess supplier performance and terms, ensuring restaurants are getting the best value in ingredient quality, order reliability, and price when replenishing inventory.

4. Enhance Customer Experience

   Creating an exceptional customer experience is crucial for modern restaurants, as search engines, food delivery apps, and online ordering have given hungry customers more convenient options than ever before.

   • Emphasize the importance of customer serviceby providing ongoing staff training and support. This training should prioritize quick and reliable service, informed by feedback and the overall environment and tone the restaurant aims to create.
   • Personalize the dining experienceusing customer data from reservations, loyalty programs, and/or direct feedback to create a tailored experience, especially for guests with particular dietary preferences or allergies. Many restaurants also use theme nights or special menu promotions to create a unique, but temporary, customer experience.
   • Use technology to improve service, including mobile reservation and ordering applications, tableside payment systems, and digital menus. After implementation, monitor profitability and customer reception to guide future technology investments.

5. Improve Menu Offerings

   A well-designed menu showcases a restaurant’s offerings and concept, creating opportunities to differentiate itself from the competition. By regularly analyzing menu performance and incorporating fresh, seasonal ingredients, restaurants can stand out from the crowd and satisfy changing customer demand.

   • Analyze menu performance and profitabilityusing sales data and customer feedback and regularly adjust menu items based on popularity and profit margins.
   • Balance menu variety with kitchen efficiency. For example, if there’s only one menu item that uses an expensive ingredient with a short shelf life, consider swapping it for a similar item that uses more common on-hand inventory.
   • Incorporate seasonal and local ingredientsto showcase fresh, high-quality offerings that support the local community and build new partnerships, potentially reducing costs and building a positive brand image. Seasonal menu items also help bring in new business while adding variety for returning customers, and local shipments minimize the risks of supply chain issues and slowdowns.

6. Leverage Technology

   Restaurants can use digital tools to increase their operational visibility and collect, organize, and report data faster than ever before. These tools are often part of a larger system, such as a cloud-based enterprise resource planning (ERP) application suite, and create a centralized location for stakeholders to run ad hoc analysis and collaborate on solutions.

   • Invest in restaurant management softwarethat integrates siloed business operations, such as sales, inventory, accounting, and payroll, to gain a holistic operational view and make informed decisions based on up-to-date datasets. Many of these systems are optimized for restaurants and have industry-specific features, including reservation management and table layout capabilities.
   • Enhance your online presence and digital marketing by creating a user-friendly website, online loyalty programs, newsletters, engaging social media profiles, and targeted online advertising campaigns. These marketing strategies can attract new customers and build brand loyalty.
   • Integrate with delivery and takeout services to expand customer reach and increase revenue streams. However, these third-party services, especially new and untested companies, have inconsistent quality control, and restaurants must take steps to ensure that customers are getting correct orders in a timely manner.

7. Ensure Consistent Quality and Safety

   Enacting and maintaining high quality standards for food, service, and safety protects customers, staff, and the business’s reputation while delivering consistent and reliable dining experiences.

   • Implement strict food safety protocolsthat cover all aspects of food handling, storage, preparation, and service. Managers should design these protocols with the ingredients, equipment, and risks specific to their restaurant in mind.
   • Instate regular staff trainingon food safety, quality control, and customer service standards to maintain consistency and excellence across all operations. Robust training helps ensure compliance and minimizes the risk of foodborne illnesses and mishandled equipment.
   • Maintain high standards of cleanliness and hygiene in all areas of the restaurant, including dining areas, kitchens, and restrooms. This creates a welcoming and safe environment for both customers and staff. Make sure standards are regularly updated to remain effective and compliant with new regulations.

8. Invest in Financial Management and Cost Control

   By implementing sound financial practices and regularly monitoring key metrics, restaurants can develop strategies that cut costs without negatively impacting customers or staff.

   • Create budgeting and financial planning strategiesthat align with the restaurant’s overall business goals and benchmarks. Financial analysts and owners should then regularly review and adjust these plans as actual results come in and market conditions change.
   • Monitor key financial metrics—such as food and labor cost percentages, revenue per seat, and item-specific profit margins—to generate financial statements, identify low-return endeavors, and find places to increase profitability. Managers should also explain these metrics to staff, teaching them how specific practices improve performance and reduce costs.
   • Use financial software for accurate reporting and analysisto gain real-time insights into financial health and make timely adjustments. This is especially important during ingredient shortages or supply chain slowdowns, where competitors rush to replenish or replace stockouts and lagging orders can lead to revenue losses and unhappy customers.

9. Improve Marketing and Community Engagement

   While expanding the customer base is important, restaurants must be careful not to lose their regulars in the process. By implementing creative marketing strategies and actively participating in the local community, restaurants can increase their visibility, foster customer loyalty, and satisfy both new and old customers to drive long-term success.

   • Try marketing strategies for attracting and retaining customers, such as implementing loyalty programs, offering promotions or discounts, and adding new menu items to capitalize on current fads. Remember to monitor the success of marketing campaigns and their effects on margins, as heavy discounts, especially for the most loyal customers, can squeeze the bottom line.
   • Build a strong brand identitythat reflects what makes the restaurant unique—its concept, values, and specialty menu items, for example—and consistently communicate this identity across all marketing channels and customer touchpoints, including social media and local advertising.
   • Engage with the local community and create partnerships by participating in local events, sponsoring community organizations and youth sports teams, and collaborating with other local businesses. This local visibility can increase brand awareness and build loyalty.

10. Adapt to Industry Trends

    Customer preferences are constantly evolving, with new food trends and technologies changing how, where, when, and what patrons order. When trying out new ideas, restaurateurs must carefully balance capitalizing on new trends with maintaining their restaurant’s unique identity.

    • Stay informed about emerging trends in the restaurant industryby attending industry events, reading trade publications, and engaging with experts, peers, and customers. Restaurant management software can also help owners forecast demand and monitor market behavior.
    • Adapt menu and operations to meet changing customer preferences,such as offering plant-based options, accommodating dietary restrictions, and incorporating sustainable practices to appeal to health-conscious and environmentally aware consumers. These strategies demonstrate to customers that the restaurant values patrons and is attentive to their preferences.
    • Innovate with new dining concepts and experiencesthat differentiate restaurants from their competitors and create memorable experiences for customers, including unique menu items, interactive dining experiences, and special community events such as trivia and karaoke nights.

Unify Your Restaurant Operations Management in NetSuite

Today’s restaurants face many operational hurdles, such as siloed data and slow manual processes that make it difficult to adjust to rapidly changing customer preferences and market conditions. With NetSuite Enterprise Resource Planning (ERP), restaurants can integrate their operational data, including sales, accounting, and payroll, into a single, cloud-based platform. This comprehensive solution enables restaurant owners and managers to gain a holistic view of their operations with real-time data collection and customizable reporting, helping restaurant owners and managers make informed decisions.

NetSuite ERP can be customized to meet the unique needs of the restaurant industry, such as inventory management capabilities that let managers track stock levels, streamline the reordering process, and minimize waste. By leveraging NetSuite’s powerful capabilities, including automation and demand forecasting, restaurants can confidently navigate the challenges of this ever-evolving industry as they grow.

Improving restaurant operations is an ongoing process, requiring strategic planning, execution, and flexibility to keep up with evolving market conditions and customer preferences. By effectively managing staff, inventory, and menu offerings, often by using technology, restaurateurs can increase profitability while maintaining or improving the patron experience.

Improving Restaurant Operations FAQs

What is operational excellence in a restaurant?

Operational excellence in restaurants is possible through the continuous improvement of processes, procedures, and systems to maximize efficiency, profitability, and customer satisfaction.

What are the daily operations of a restaurant?

The daily operations of a restaurant include opening and closing, preparing food, serving customers, managing finances, and cleaning and maintaining the floor, kitchens, and restrooms.

What makes for a good restaurant manager?

Good restaurant managers are leaders with extensive operational knowledge and customer service expertise. They effectively manage and schedule staff, allocate resources, and create a positive dining experience for guests while demonstrating strong communication, problem-solving, and decision-making skills, especially during high-stress situations.