Having a great menu and a big marketing budget might help you attract customers to your restaurant, but it might not be enough to keep your doors open. In fact, some restaurants become victims of their own success, bringing in many customers but making no profit off any of them. Controlling your costs, meeting your legal obligations and managing your cash flow are just a few key factors in reaching and maintaining success in the restaurant business.

Food vs. Sales Costs

It doesn’t matter if your tables are full every breakfast, lunch and dinner if you sell meals for $10 and they cost you $11 to serve. Many restaurateurs fail to keep control of their food costs, with some having no idea what their direct food costs are for each meal served. In addition to covering the cost of the meat, vegetables, fruits and other items on each plate, your tickets must cover your operating costs, such as rent, labor, marketing, insurance and phones. Determine your food and overhead costs and create a formula for setting prices that include both, as well as a profit.


Don’t rely on word-of-mouth or paid advertising to get customers to your door. Many non-chain restaurants depend on a low-cost mix of ads, promotions, sales, coupons, social media and public relations to keep customers coming. In addition to advertising and promotions, you’ll need a marketing plan that includes creating a brand.

Unique Brand

People don’t come to your restaurant for food -- they have that at home. When people dine out, they are looking for one of several benefits: speed of service so they can get back to the office within their lunch hour, quality at a low cost, cuisine they can’t get anywhere else, fine dining or an expansive menu that satisfies a large group. It’s imperative that you give people a specific reason to come to your restaurant and that you communicate that unique benefit. Don’t try to be everything to everyone or you might end up being nothing to no one. Determine who your biggest potential customer base is: older adults, families, people on a budget, high rollers or another easily definable and reachable group. Then create a product that caters to them. If you’re an Italian restaurant, look beyond the fact that you offer pasta or pizza. For example, offer speed, value, family-friendliness or a romantic setting.


Many a restaurant owner has been sunk by failing to navigate his taxes, labor requirements and health laws properly. Hire a qualified CPA or tax attorney to help keep your books and pay your obligations on time. Call the health department to learn what you need to do pass your food inspections. If you feel a call to the health department will bring unwanted scrutiny, you might be hiding something that can eventually shut you down. Be aware that comments you make to employees, questions you ask during interviews and other things you do when interacting with workers can get you in legal hot water. Set up a consultation with a human resources professional or labor lawyer to ensure you don’t have to shut your doors to settle an employee lawsuit.

Cash Flow

You will have bills you need to pay before you sell your meals, and maintaining proper cash flow will help you stay open. Talk with your bank about short-term loan or open credit options. Negotiate longer payment terms with vendors and suppliers, even if it requires a slightly higher payment, if you need time to pay your bills. Create a budget that identifies when you will have big payments coming due, such as annual or semi-annual insurance premiums or quarterly taxes, to make sure you can pay your bills on time.