How to Improve Restaurant Operations: 8 Key Strategies

Don't Be Afraid to Invest in Your Business

"If you don't make an investment in the business, you won't see a return," Juan Smalls says. "Hire people who are smarter than you, and pay them what they're worth. For example, investing in an operations veteran might mean you take a hit in profits at the outset, but that person will understand how to streamline the business and make it more profitable.

Be Consistent

“Be consistent with the service, food, atmosphere and music so people know what you're good at. Then they'll come back to you for that,” Juan Smalls says.

"To do that, document everything. Write down recipes, of course, but also create a manual that provides a checklist of what to do when opening the restaurant, how to close, policies for handling different types of customers and other day-to-day details that your staff needs to know. Eventually, you're going to want to take some time off, and having procedures in place will go a long way in letting you do that."

Pay Attention to the Numbers from the Beginning

Food and labor costs can run away from you quickly, says Teneshia Murray, who opened her first T's Brunch Bar in Atlanta in 2022 and has since expanded to four locations. “I wasted $1 million letting someone else handle my labor and food. It was a hard lesson,” she says. “Now, I do payroll myself, and I watch everyone's orders.” Juan Smalls agrees.

“Constantly be on top of numbers – the number of guests, the amount of labor – and cut where you need to,” he says.

Don't Expand Too Fast

Although Murray opened four restaurants in two years, she wouldn't recommend it.

“I wasted and lost a lot of money by getting too big too fast,” she says. “If I could do it again, I'd open one restaurant and then wait two, three years. You need to give your restaurant time to simmer. You need to get your food cost and labor in order. You need the right people in the right jobs, and make sure the food tastes the same all the time.”

Hire the Right People for Each Job

“Hiring the wrong people is so expensive,” Juan Smalls says. According to an estimate from the Center for Hospitality Research at Cornell University, turnover for a key employee can cost an employer an average of $5,864. To help prevent turnover, come up with a list of criteria for each position, including personality. Consider how a new hire will fit into the culture and add to the energy of the restaurant.

“That has become a huge focus,” he says, adding that if someone isn't a good fit, they should be moved out of that position as quickly as possible.

Scout on Your Competitors

It’s common practice for large restaurant groups to assess the businesses around them before they open, and smaller operators should do that too. Understand which types of food or styles of service are missing from the neighborhood, and figure out what other restaurants charge for staples such as burgers and margaritas. Assess gaps in the area that could be filled.

Be Thoughtful About Menu Development

Hospitality companies often want to be all things to all people because operators generally want to make everyone happy. But that’s becoming increasingly impractical. Many new fine-dining restaurants focus primarily or even exclusively on tasting menus. That's because it makes for easier inventory control: People have few or no choices – but diners know that going in – which can better control reservations. That has been the approach of Sushi by Scratch, an omakase restaurant that owners Phillip Frankland Lee and Margarita Kallas-Lee have expanded to a dozen restaurants.

With a fixed menu, operators can streamline purchasing, reduce waste and maximize efficiency in the kitchen, critical factors in an era of rising food costs. It also allows for better portion control, a more predictable labor schedule and a consistent guest experience.

Other restaurants have limited menus, like Cotoletta, which restaurateur Andrea Fraquelli opened in the Miami neighborhood of Coconut Grove. It offers one entrée (veal Milanese) accompanied by two antipasti to start and two sides, priced at $80 for two people.

Fraquelli's model minimizes ingredient waste and kitchen complexity while maintaining a high check average, and Lee says it has been a resounding success.

Of course, most restaurants fall somewhere in the middle but should think about each ingredient purchase. Can trim from steak be made into a steak tartare or a burger? Can fish scrap be reworked into a ceviche or the bones used to make a chowder? Maybe leftover brisket can turn into chili, or used lemon rinds reworked into a cocktail or limoncello.

Implementing small efficiencies can mean the difference between struggling with slim margins and running a profitable, resilient restaurant.