The Top 3 Factors That Affect Restaurant Revenue

Every restaurant owner needs to put the latest in revenue management on their radar. But before that, they need to have a clear vision of their current restaurant revenue circumstance to know where to head next.

How is revenue different from profit margin?

Revenue is the income generated from your business through all your revenue streams. A crucial difference between restaurant revenue and restaurant profit margin is the regular operating expenses. Typically, your restaurant profit margin is the amount of leftover cash after handling merchandise, food, and sales and discount expenses.

What are the most common restaurant revenue problems?

The issue with restaurant revenue is that the estimated revenue varies according to each business. Several factors affect the amount of revenue earned such as occupancy, number of seats, prices, location, and the cuisine you serve, to name but a few.

Below we’ll discuss the main three factors that affect restaurant revenue and how to come up with strategies to boost each.

1. Occupancy

By occupancy we mean: the number of people you serve. If there are many unoccupied seats at your restaurant, obviously, your restaurant revenue strategies could use some help.

To generate traffic, focus on marketing campaigns to attract new potential customers. You can start by posting mouthwatering photos of your best dishes on social media. Also, collaborating with food influencers could add to your restaurant’s credibility.

And since the restaurant business has witnessed a digital revolution in recent months, a blog and an online ordering website and application are must-haves in order to spread brand awareness and increase your restaurant revenue.

Check out the online food ordering system, Taker for more details.

2. Sales

Find the average amount that people spend. If you attract the right number of customers, but they don’t seem to spend enough as they should be, consider up-selling and cross-selling. By upgrading your menu, customers will be encouraged to order their favorite dishes with a tweak to them (i.e., up-selling) or more side dishes like appetizers and desserts (i.e., cross-selling). This will grow your restaurant revenue, especially with guests looking for variety and new experiences.

Incentives as gift cards, happy hours, and weekly offers are also great ideas to attract customers while giving them a reason to spend more, given the good deals they get in return. It is also advisable to set up a loyalty program for repeat customers as studies show that loyal customers tend to spend more than first-timers.  

3. Service

Excellent service is key to attracting new and existing customers. By delivering the right service, your restaurant revenue is guaranteed to increase. Service isn’t limited to food. It is broader and more intricate. Starting from speed, courtesy, to customized service, the list could go on forever. To have a better idea of the adjustments your restaurant need, ask your customers. Their feedback is where you should be starting from, and as you make the necessary changes, don’t forget to follow up with them and ask for their feedback on the changes you’ve made.

In conclusion, know what your current restaurant revenue status is and work accordingly. You may want to work on the three previous points all at once or decide to work on them one by one. There is no fixed rule, but it all starts with the determination to make the necessary improvements.