How Top Restaurants Increase Revenue in Any Market Condition

Many restaurateurs sleepwalk through writing their budget every year – forecasting menu price growth, inflation, or market growth as a revenue target.

The best ones choose to wake up, and do a lot better than that.

Revenue can always go up – faster than you expect.

Recently, a well-respected restaurant group came to me with a problem to solve: sales had been down three straight years.

They knew why. It was the market. The economy. Competition.  

Their analysis? Completely wrong.

“But everyone we talk to is down,” they told me.

I responded, “I have clients who have enjoyed a revenue increase of 5% or more this year in a market that barely ekes out 2%. Wouldn’t you rather have the 5%?”

The look on their faces was a sequence of confusion, concern, disappointment, and then hope.

They had seduced themselves into a victim role, with no solutions to their revenue trend.

Until I gave them evidence to the contrary.   

Together, we created a strategy and plan to build sales in any market condition. 

Take Marginal Revenue Increases to the Bank

Owners of the successful independent restaurant groups I work with rejoice knowing they have already covered their overhead.

They have excess capacity.

The amount of each marginal sale that drops to the bottom line? A beautiful 50-60% or more. 

Matthew’s Six Laws of Increasing Revenue

  1. Explain your concept and culture with a clear message guests want to hear. This brings new guests into your dining room, makes existing guests come back more frequently, and inspires lapsed guests to return.
  2. Deliver that message through marketing, promotions, PR, and guests’ dining room experiences. Guest counts will increase.
  3. Managers introduce themselves to guests and learn guests’ names. An ongoing dialog of recognition that people enjoy being part of will inspire loyalty and frequency.  
  4. Servers (or cashiers in fast casual) build PPA by exposing guests to incredible menu items they have not tried before.
  5. Build a culture that puts either the guest or employee first. This drives the measureable quality of guest experience, yielding more than your fair share of your guests’ dining budget.
  6. Constantly update menu items, marketing messages, and employee education. Don’t allow yourself to be the hare taking a nap while the tortoise creeps by.

Restaurateurs who want their sales to substantially outpace the market cannot afford to be “only as good as their last shift.”

They have to be as good as their next shift.

Over to you. Which of the six laws above would have the greatest top-line impact in your organization?