If you want to know how to run a restaurant successfully, look to those who’ve done it before. Even top restaurateurs were once aspiring culinary professionals who had to learn what it takes for a business to succeed: from building a community of loyal customers to crunching the numbers to finding creative new revenue streams.
In this article, real-world restaurant owners share strategies for running a successful restaurant that both up-and-coming chefs and veteran operators can apply to their own businesses.
7 tips on how to run a restaurant successfully
The last few years have been a time of transition for restaurants, balancing evolving consumer demands with new industry-wide challenges. At the recent DoorDash Main Street Summit in Los Angeles, restaurant leaders came together to inspire and learn from each other, sharing stories from their own experience to guide fellow chefs and restaurateurs. Here's what they had to say about running a successful restaurant in today's landscape.
1. Find creative ways to reduce food costs
With inflation causing increased food prices and packaging costs, it's a smart idea to review your expenses and brainstorm ways to reduce restaurant costs. Some ideas for managing food costs include purchasing ingredients that are in season — in other words, when they’re plentiful, and at a lower price. Many restaurant operators also focus on minimizing food waste by carefully tracking inventory and training kitchen staff to make the most of every ingredient.
Operators can also partner with their suppliers to find creative strategies for improved pricing, such as bulk ordering, prepaying for items, or more efficient packaging. Briana Valdez, Founder & CEO of Los Angeles-based restaurant HomeState came up with several efficiencies with her suppliers. First, she asked vendors to repackage her butter shipments into five pound blocks instead of traditional sticks. She also reduces costs by having her supplier blend eggs in advance instead of shipping them in-shell. This method also saves time for her own team, who no longer has to crack thousands of eggs each day.
Briana spoke at the Main Street Summit, sharing tips on how to build strong relationships with vendors. You can watch the full session on YouTube.
You can't just say to your vendor, 'Hey I need to get my prices down.' It definitely has to be a partnership, so think about what solutions you can bring to them.
For more cost-saving tips, read our blog post How to Reduce Restaurant Costs and Improve Profits.
2. Diversify your revenue streams
In today's environment, restaurants are more likely to be successful if they have additional revenue streams beyond dine-in sales. To drive incremental sales and reach new customers, restaurants can offer delivery and pickup, and then boost online order sizes and profit margins with alcohol to-go. In fact, according to DoorDash order data, adding alcohol to delivery menus may increase restaurants’ and grocers’ average customer order values by up to 30% and convenience stores by over 50%. You can learn more alcohol delivery insights in the 2023 Alcohol Online Ordering Trends Report from DoorDash.
During the pandemic, Montreal-based Middle Eastern restaurant Sumac started selling retail items through DoorDash and an in-store display. What started as snacks, sauces, and spices soon expanded to candy, chips, and other impulse purchases. "The mini market has been super popular," said David Bloom, Partner at Sumac.
Greg Dulan, owner of Dulan's Soul Food Kitchen also believes in the power of offering multiple ways for diners to enjoy his menu. In addition to a banquet room for private events, he has a food truck for catering, does collaborations with other restaurants, and is building a new takeout-only kitchen.
"You have to have diversified revenue streams if you're going to make it in this industry," explained Greg. "We just try to think of any way we can to bring in revenue to the business. Even things you wouldn't ordinarily do, you have to just try."
3. Minimize employee turnover
One sure-fire strategy to run a restaurant successfully is to create a positive work environment that motivates employees, as holding on to your existing employees costs far less time and expense than replacing them. That's why launching employee retention techniques like engagement surveys, scheduling autonomy, and a renewed company culture can help you stay competitive in this challenging labor market. Here are two other strategies to consider:
Promote from within: When hiring managers, look around at existing employees who may be ready for a leadership role. Because they already understand your operations and culture, it's often faster and more effective than waiting for the perfect external candidate. Give high-potential employees a clear path to career growth through internal training and development programs that help them rise up the ladder.
Offer a retention bonus: HomeState began offering a $500 bonus to employees who stay for three months. While it may sound like a lot, it's helped to not only keep employees, but motivate them to recruit their friends and family.
"It's bred a lot of loyalty and has encouraged our team members to go out and tell their friends what they love about working here — which is a very authentic approach to recruiting," explains Briana. "People like working with their friends, and it's helped to breed a nice culture."
In this discussion from the DoorDash Main Street Summit in Los Angeles, Othon Nolasco (Co-Founder, No Us Without You LA), Kwini Reed (Co-Owner Poppy + Rose, Poppy + Seed), and Akira Akuto (Co-Founder, Konbi) shared how they offer employee benefits to retain restaurant workers while still keeping restaurant costs down.
4. Constantly monitor your financials
From overhead and labor costs to daily sales and profit margins, there are many restaurant numbers to keep track of — so many, in fact, that it can be difficult to understand what they mean and how to act on them. Monitoring key financial metrics will help you make informed business decisions to run a successful restaurant that maximizes profits and meets the needs of your customers and staff.
Chef, author, and restaurateur Tanya Holland recommends looking into business-focused education around topics like accounting and financial reporting. “In order to be sustainable and viable, you really have to know how to work the numbers,” she said. “It’s so much more than just cooking.”
Miami-based restaurateur David Foulquier agrees, and even recommends aspiring restaurant owners to consider hospitality school. "Working in the kitchen I was able to learn a lot, but [at hospitality school] I also got to do different kinds of studies, the business side of things," he explained. "Everything from accounting to legal to marketing to understanding food costs, labor costs, knowing the food chain. It’s important to do your homework when opening a restaurant."
Up-and-coming operators may want to gain a solid understanding of key restaurant metrics — from net profit margin to food cost percentage to cost of goods sold (COGS) — which have the biggest impact on a restaurant's success. You can also download our Business Budget Template to easily track yearly revenue and expenses to determine whether you're exceeding or staying within your allocated budget.
DoorDash partners also have access to valuable sales metrics in the Merchant Portal, like net sales, average order size, unique customers, popular items, and more across any period of time. You can also easily build your own financial reports by filtering for specific metrics, timeframes, and DoorDash products. You'll also get a breakdown of new, occasional, and frequent customers, plus a heatmap of locations and zip codes where customers are placing orders.
5. Invest in your restaurant social media presence
Social media is a powerful, cost-effective tool that restaurants can use to showcase their food, atmosphere, reviews, and much more. A strong social media presence builds trust with new and existing customers, increases brand awareness, and improves customer experience. Restaurant social media marketing is especially crucial in the digital age, since countless diners turn to popular online platforms like Instagram and TikTok when deciding where to eat.
Shawn Lalehzarian is the co-founder and CEO of The Red Chickz (@theredchickz, with 1.2 million TikTok followers and 150,000 Instagram followers), a Nashville hot chicken-style restaurant with two locations in Downtown Los Angeles and Culver City, California. For Shawn, social media is all about painting a realistic picture of what the customer will experience at his restaurant — instead of spending time creating highly stylized photos. He’s learned that while presentation matters, building a loyal restaurant social media following doesn’t require fancy lighting or elaborate photoshoots.
“It's about being authentic and showing exactly what you're going to get when you come to our store. Our posts on TikTok and Instagram are shot at random angles without perfect lighting,” Shawn says. “It's actually the product that comes out of the kitchen and to your table."
Tamearra Dyson is the executive chef and owner of Souley Vegan Restaurants, (@souleyvegan, with 55,000 Instagram followers), serving plant-based Louisiana Creole cuisine in Oakland, California. Tamearra uses social media to showcase her personality online, which helps her connect with the Souley Vegan audience more meaningfully. “Souley Vegan is an extension of myself and I'm always my authentic self when I communicate to our followers,” she says. “I know who our customers are and we've built that culture.”
For more social media tips, read our blog post How to Promote Your Restaurant on Social Media and download The Ultimate Guide to Restaurant Social Media Marketing.
6. Prioritize community-building
For Tanya Holland, learning how to run a restaurant successfully went hand in hand with learning about the community her restaurant would serve. “I’ve noticed throughout my career that restaurants define a neighborhood,” she said. “And then neighborhoods are kind of defined by restaurants.”
Tanya’s dedication to community went beyond her restaurant concept; to truly serve her new customers, she began attending community meetings. There was a lot of redevelopment happening in the area, and locals wanted to ensure the neighborhoods and their unique cultures and flavors remained intact.
Ultimately, for a restaurant to succeed, the community needs to succeed along with it. Nurturing community and customer relationships can help you drive business while also giving back to your neighborhood. Here are a few other ideas on how to get your restaurant more involved in your local community:
Be a part of a restaurant week in your area
Partner with a local organization or charity and host a fundraiser night
Offer a loyalty program to encourage repeat customers
Solicit feedback from patrons and apply their insights
7. Stay on top of consumer preferences by offering delivery
According to the DoorDash 2023 Restaurant Online Ordering Trends report, US consumers are continuing to order delivery and pickup even as they return to dining out. Compared to a year ago, 27% of survey respondents shared that they are dining out at restaurants more today, and 35% reported they're ordering restaurant delivery more. From 2021 to 2022, DoorDash saw an 18% growth in same-store delivery orders, and a 12% growth in same-store pickup orders.
As consumers continue to opt for the convenience of delivery, restaurant operators can generate sales and drive loyalty by offering a seamless online ordering experience. Partnering with a third-party technology platform like DoorDash makes it easy for customers to find your restaurant and place an order in just a few clicks. In 2021, 15% of survey respondents began their food ordering journey with a third-party app — but as of 2023, that number has more than doubled, with 34% of respondents sharing that they go to an app like DoorDash first.
Delivery on the DoorDash Marketplace will help you reach new customers in your area without having to hire your own delivery drivers. Offering pickup through DoorDash allows you to get discovered by customers at a reduced commission — and are more efficient for your staff than phone orders. Plus, with 24/7 customer support, technology like the Merchant Portal to help you make data-driven decisions, and POS integrations to keep operations running smoothly, you’ll learn how to run a successful restaurant in no time.
We are getting new business from DoorDash. It’s not replacing our sales, it’s truly adding more sales to our operations.
Restaurant owners can also grow their business with Storefront, which allows you to easily set up an online ordering system on your own website — and generate commission-free pickup and delivery orders.
The biggest bonanza of Storefront is that it's commission-free. I mean, you can’t beat it.
Download the 2023 DoorDash Product Guide for Restaurants to explore our full suite of pickup and delivery solutions, and understand which DoorDash products will best support your unique goals.
Looking for more support for running your restaurant successfully?
For more advice from local restaurateurs, watch all Main Street Summit sessions on YouTube and check out other session recaps like Growing Your Restaurant Business: A Guide to Strategic Expansion. And if you are just starting your restaurant entrepreneur journey, check out our Opening a Restaurant Checklist.