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How To Grow Your Restaurant – Without Going Broke

How To Grow Your Restaurant BusinessSmall independent restaurants have been dropping like flies over the past year.  Chances are, if you’ve made it this far through the recession, the worst is behind you.  That doesn’t mean tough days aren’t ahead, but hopefully you’ve at least stopped just trying to stay above water and have started swimming a little.  The waters out there are still dangerous, but if you’re not thinking about growth, you’re setting yourself up for decline.

Restaurants are a business like any other, and as an entrepreneur, you’ve already taken the plunge into the risky, but potentially rewarding world of business ownership.  Growing a business is never easy, and trying to grow that business in the current economic climate is even harder, which is why a few key principles for small business ring more true today than ever:

Maintain your focus.  Someone is always going to be trying to sell you something or help you out with another thing.  Buying their product or partnering with their firm is your key to success.  More businesses have failed because they invested in things that didn’t help their bottom line than just about any other reason.  You must maintain a laser-like focus on what your restaurant really needs and what might be nice, but isn’t absolutely vital to day-to-day operations.

Don’t forget who you are.  Small independents do well because they have a local appeal and feel like they’re part of the community.  A common mistake as a small restaurant tries to grow is to start trying to appeal to larger audiences by expanding menus, changing décor, and moving into larger locations.  It may seem counterintuitive at first, but a crowded little local place with a hole-in-the-wall feel is much more attractive, and in the end more profitable, than a little-known name that just moved into a large, mostly empty space.  You’ve been successful up to this point precisely because you are a small independent restaurant, not in spite of it.

Be a tightwad.  Another trap small businesses fall into, especially successful ones, is to start splurging on products and services.  If you’re lucky enough to be making money, count your blessings and then continue to be a miser with the bank account.  If you do spend money on something for your business, make sure it complies with Rule #1 above.  You’ve gotten this far with a lot of hard work and a lot of doing things yourself.  Don’t let those good habits go by the wayside just yet.  Keep your nose to the grindstone and keep building up the treasury.

Be a cutthroat shopper.  Pit food suppliers against each other.  Relentlessly search for discounts on everything you buy.  Search out rebates from credit card companies, utilities companies, insurance companies, and anyone else who provides you a service.  Controlling overhead is the key to success, and if you lay the groundwork now, it going to translate into better profits down the line.

Sell the &*!# out of your product.  In the end, restaurants are about making a product (your delicious entrees) and selling them to customers.  The first four tips in this list are all about making production as efficient and as affordable for you as possible.  Unfortunately, none of that matters if you’re not selling meals.  Make getting as many customers in the door who also leave happy the top priority of your business.  Really, this should be first on the list, not last.  Don’t let focusing on the other tips cause sales to fall by the wayside!

Success for your restaurant boils down to this: if more money is coming in the door than going out, you’ll live to fight another day.  Ironically, most small business owners find that controlling the amount of money going out is a lot harder than growing the amount of money coming in.  That’s why four out of five tips on this list deal with overhead and expenses.  Striking the right balance between growing sales and controlling costs is the key to growth in your restaurant.

About Greg McGuire

Greg has blogged about the food service industry for years and has been published in industry magazines, like Independent Restaurateur and industry blogs like Restaurant SmartBrief. He lives in Colorado with his wife and two sons and enjoys reading, live music, and the great outdoors.

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  1. Good list. I would add to that “getting as many customers in the door” means building relationships with those customers you do have. Good solid relationships. That means taking the time to show them through your time and actions that you appreciate them.

  2. Being a tightwad and cutthroat shopper are two of the most important aspects here, in my opinion. You can never save enough money when it comes to a small business, and if you’re not careful with your money, then you’re going to go broke quick. Really great article on how to survive in this competitive industry.

  3. Oriental Palace Chinese Restaurant

    Great article – and something every independent restaurant should be doing! We recently changed a load of our utility suppliers and this helped a lot – in fact it did almost start a price competition between some of them (so they are fighting for business it seems). I agree with Harold as well – one of the things we do is to take time to speak to every customer, make them feel appreciated and we get a lot of repeat and referral custom because of this. We’ve just launched a website as well (we are a bit behind the game in that sense) but its amazing what you can achieve online for little or no investment – were already taking online bookings from new customers, so thats already starting to pay for itself. So much to do in this ever changing environment!

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