[00:00:00] It's never been harder than it is right now to run a profitable restaurant. Now, how many times have you heard me say that over the last 12 months? I'm gonna say I probably started 10 or 15 episodes with that same sentence. But it's true. Revenue is down, costs are up, and everyone's answer seems to be the same. Well, we just need to spend more on marketing, and that's wrong. In fact, today I'm going to show you eight ways, eight tips to each increase revenue in your restaurant. And not a single one of them requires you to spend a single dollar more on marketing. These are operational moves, strategic decisions, smart tactics that most operators completely overlook. All of that on today's episode of Restaurant Strategy.
[00:00:43] There's an old saying that goes something like this. You'll only find three kinds of people in the world. Those who see, those who will never see, and those who can see when shown.
[00:00:53] This is Restaurant Strategy, a podcast with answers for anyone who's looking.
[00:01:14] Hey, everyone, thanks for tuning in. My name is Chip Close. I am your host of this, the Restaurant Strategy podcast. We put out two episodes every single week geared towards independent restaurant owners looking to grow, looking to level up, looking to solidify profitability.
[00:01:28] If you want help implementing any of these eight strategies that we're going to talk about today in your restaurant, then let's have a conversation. A strategy session is absolutely free. It's 30 minutes. It's you and me or someone from my team where we get to talk more about what's going on. We ask you questions, you ask us questions. We talk more about the coaching program we run where we get to work directly with restaurant owners from all over the country. And the best way to do that to get that set up, is to go to Restaurant Strategy podcast schedule. Absolutely free. 30 minutes. Go. That link is in the show notes.
[00:02:05] Now, if you've been listening to this show for any length of time, you've heard me talk about Kickfin, because they've been a trusted partner of mine for years, and I genuinely believe in what they do. For restaurant operators, managing tips has always been a headache. Right? There's never enough cash in the drawer. At the end of the night, managers are stuck making bank runs and doing spreadsheet math. At 1:00am Tip pooling regulations keep changing, getting more complex. It's just not fun. And that's exactly why Kickfin exists. With Kickfin, restaurants can calculate tip pools automatically send instant payouts directly to employees existing bank accounts. No cash, no predatory pay cards, no glitchy employee apps required Your team gets paid their tips fast in the account they choose right when their shift ends. Kickfin integrates with all major PoS players, including Toast Square, Skytab, Genius Union, and many more.
[00:03:00] So you get a fully automated end to end tip management system. It is fast, it is accurate, and it gives you a clean digital record for accounting and compliance. Kickfin powers tip payouts for every type of concept, from mom and pop shops to regional hospitality groups to national brands like Walk On Sports Bistro and Marco's Pizza and Toasted Yolk Cafe. Great hospitality starts behind the scenes when your people feel valued, when they are paid fairly and paid fast. I promise everything improves.
[00:03:32] Kickfin makes that possible. So if you're ready to save hours every week, eliminate cash runs, streamline accounting, and make tip payouts the best part of everyone's day, visit kickfin.comdemo okay, so before we dive into these eight strategies, I need you to understand something critical.
[00:03:53] Most operators think revenue is a marketing problem. If we just got more customers, if we just had more traffic, if people just knew about us.
[00:04:03] But here's the truth. Most restaurants are leaving thousands of dollars on the table every single week with the customers they already have.
[00:04:12] You don't need more people. You need to make more money from the people already walking through your door. And that's what these eight strategies do. Eight tips, eight simple tactics. Are you ready? Let's go. Number one, Fix your menu mix. Your menu has high margin items and low margin items. Question is, are you selling the right mix? I worked with a restaurant doing 85 grand a month. Owner was stressed about revenue all the time. I asked one question. What percentage of your customers order your highest margin items versus your lowest margin items? And he didn't know. So I showed him how to pull the data and here's what we found. His top selling item was a burger. Food cost 35% price, 14 bucks, meaning the margin was $9.10. His fourth selling item was a salmon dish. Food cost was just 28% price, 26 bucks margin $18.72. The problem was that the burger was outselling the salmon three to one. So every time someone ordered a burger instead of a salmon, think about it this way. He lost $9.62 in gross profit. So we made three changes. First, we moved the salmon to the top right corner of the menu, the spot that gets the most attention. Second, we chef's feature banner to draw the eye. And third, we train the servers to lead with the salmon. When guests ask for recommendations, go to the salmon one month later, salmon sales had increased from 12% of entrees to 28% of entrees. Same number of customers total, Same total covers. Revenue increased by $4,200 that month. That was over $50,000 annually from one little move, moving one item on a menu and then simply training the servers to push that.
[00:06:02] The lesson here is you don't need more customers. You need the customers. You have to order different items. That is a menu mix strategy. And it is the single fastest way to increase revenue without spending a dime on marketing.
[00:06:17] Number two, stop giving away add ons. So every restaurant, I'm assuming your restaurant has add ons, right? Add extra protein or side sauces or premium toppings or substitutions, Right? Most restaurants either include them for free or charge so little that it doesn't make a difference. And you're leaving money on the table if that's what you do. So I consulted with this breakfast place. They were doing about 400 covers on a Saturday morning. Serious volume. When someone ordered eggs, the server asked what kind of toast, white, wheat or sourdough. Sourdough cost them $0.40 more than white bread. It was more expensive, but the problem was they charged the same price.
[00:06:56] About 60% of the customers, though, chose sourdough. You would? I would. So that's 240 orders of sourdough times 40 cents lost. Margin equals 96 bucks every Saturday over the course of 52 weeks. You do the math. That's almost $5,000 a year just on sourdough toast. We made one change. Sourdough is available for a $50 upcharge. You know what happened? About 40% still ordered it and simply paid the upcharge. The other 60% just chose, quote, unquote, regular toast. Revenue increased, food cost dropped, and the customers didn't seem to care. So here's what to do. Audit every add on, every substitution, every upgrade you offer and ask yourself, does this cost us more? Are we charging appropriately for it? Would customers still order it if we had to charge more? Then simply add strategic upcharges. I avocados, 2 bucks. Extra double protein is $4 more. Premium cheese is $1.50 additional. Most customers who want that will pay what you charge. The ones who don't will just choose the standard option. Either way, you win. The lesson here is every add on is or can be a revenue opportunity. So stop giving away the margin.
[00:08:15] Number three, engineer your drink menu.
[00:08:19] Beverages. We all know this. It's the highest margin category in any restaurant. And most operators I see completely ignore Them. Now, I'm not talking about alcohol, though. That matters too. I'm talking right now just about soft drinks, lemonades, specialty beverages. Most restaurants have them have this on their menu, right? Soft drinks, $2.95. That's it. Coke, Sprite, whatever. All the same price. And here's what smart operators do. They create a beverage menu with tiers.
[00:08:46] Basic fountain sodas, $2.95. Premium fresh lemonades, iced teas, specialty sodas $4.50. Signature meaning craft sodas, fresh squeezed juices, house made beverages, $5.95. When you give guests options at different price points, many will actually trade up. In fact, one restaurant I worked with added a fresh squeezed lemonade for $4.95. It cost 60 cents to make. Do the math. That's a margin of 435.
[00:09:15] Compare that to the fountain soda. Cost is 22 cents. Price 295. The margin on that was just 273.
[00:09:23] The lemonade made a $62 more per drink. And they sold 40 lemonades per day instead of fountain sodas when they did this. 40 drinks times a dollar 62. An additional margin times 30 days. It's almost $2,000 a month. Over $23,000 per year from one beverage edition simply by offering a tier. The lesson is your beverage menu is and can be a massive profit engine. So just build it strategically.
[00:09:54] All right, Number four, implement strategic pricing tiers. Most menus have one price per item.
[00:10:02] Smart menus have multiple price points for the same category. Let me give you an example. Bad menu burger 14 bucks.
[00:10:10] Better menu, classic burger, 12 bucks. Deluxe burger, 16 bucks. Premium burger, 19 bucks. You know what happens then? The $12 burger becomes the value option. 16 burger, I promise you, becomes the popular Choice. And the $19 burger, right, becomes the premium. The beauty of it is that now we're anchoring in the eyes of the consumer, anchoring pricing at $19.
[00:10:35] It makes the $16 burger look more reasonable. Most people we know this will simply order the middle option. Before, everyone just paid 14 bucks. Now, because you got categories, you've tiered it. Most people will pay $16.
[00:10:49] Same burger, same category, but now we've offered things below it and above it. And you get $2 more per order. If you sell 100 burgers per day, 100 burgers times that $2 increase times 30 days, that's $6,000 a month.
[00:11:03] Spread out over the year, it's over $70,000 in additional revenue. Again, I've done episodes on this. It's called price anchoring. And it works in every category. In fact, you should be employing this in every category.
[00:11:16] Meaning your salads, your pastas, your steaks, your sandwiches, your side dishes. Give people a range. Most people, as it turns out, will choose the middle. Some will choose the high. Great. And few will choose the low. But most people will choose the middle. But by anchoring it higher, we get to make more. Your average CH goes up without adding a single customer to your reservation books. The lesson, strategic pricing. Specifically, tiers guide customers to spend more. Those are the first more. Next four in just a minute. After a word from another one of our sponsors.
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[email protected] as always, you'll find that link in the show notes.
[00:12:51] Now, I promised you eight different strategies. Eight tips to make more money to increase revenue without spending a single dollar on marketing, without even trying to struggle to get more people in the front door. Just maximizing the people you already got. We already talked about the first four, right? First four, we started with the menu mix. Really, really identifying, dialing that in. Number two was about the add ons, right? Stop giving them away. Use them as a revenue opportunity. Third one was about how to engineer the drink menu. And the fourth item, fourth thing we talked about was how to build strategic pricing deers. Now number five, let's maximize those table turns without rushing guests. This one's for all the full service restaurants out there. Your dining room has a fixed number of seats. The more times you fill those seats per service, the more revenue you generate. Most operators think table turns are out of their control, right? They say, oh well, I mean, guests are going to sit as long as they want. They're going to camp. What can we do? Okay, here's what you can do.
[00:13:54] First, measure your current turn times by section and by day part.
[00:13:59] Most operators have no idea. They simply guess, but actually go and pull your POS data. Calculate average time from seating to payment. You might discover that Weekday lunch is 45 minutes, while weekend lunch is 65 minutes. Weekday dinner is 85 minutes, but weekend dinner, 105 minutes. Okay, cool. Now you have a baseline. Second, identify what is actually slowing the turns. And is it wait time for food? Is it slow payment processing? Is it tables sitting empty after they the guests leave not being reset? Is it long gaps between courses? Usually in my experience, it's one or usually multiple of what I listed above.
[00:14:40] You simply have to figure out what it is for you. Finally. Third, make those simple small operational changes that can make a huge impact. Right? So I worked with a restaurant averaging 90 minute table turns on Friday nights. We literally just dialed into Friday nights. We made four changes. Number one, we focused on pre busing the tables during the meal, meaning keeping the tables cleaner. They signaled the progression and people didn't feel like they owned the table. We kept it manicured. Number two, we brought the check with dessert instead of waiting for guests to ask for it, which I know, I come from fine dining. That's what we have to do. But we made this one simple change on Friday nights. Specifically where we dropped the check with dessert. We implemented mobile payment. Right. A bunch of you guys do it. It ended up cutting the time by five minutes. Just that one thing. And we improved the kitchen ticket times. We set a 25 minute maximum. Table turns dropped to 75 minutes with all of just those four things. All of them combined took 15 minutes off the table turn. Right. In a four hour dinner service, that's the difference between 2.6 turns and 3.2 turns per every table. With 30 tables, that's 18 additional covers every night and on Friday. And what we ended up doing was extending it to Saturday night. That's 36 additional covers per week at a 45 check average, which is what they had. That was 1620 per week. It was over $84,000 per year in additional revenue just from this one simple move. I don't know about you, but I can think of a lot of cool things to do with an extra $84,000 at the end of the year from making service more efficient. The lesson here is faster table turns equal more revenue. And it's about efficiency. It's not about rushing. All right, number six, capture the check. All right, so here's a question for you. What percentage of your guests order appetizers Most restaurants I found is about 30%, and that's a problem. Now, obviously, we're not talking about fine dining. We're talking about a lot of casual.
[00:16:36] A lot of casual places, family restaurants. It's about 30%, and I think it's a problem. So if your average entree is, let's say, 22 bucks and your average appetizer is, let's say, 12 bucks, every table that skips the appetizer costs you 12 bucks in revenue. So how do you fix it? Just make it easier to say yes. Most servers ask, would you like to start with an appetizer? That's a yes. No question. It's easy to say no. 50, 50 chance you lose the sale. Better approach. Can I bring out our crispy calamari, or do you want our bruschetta to start? You're offering a choice. You're not asking a yes, no question. Right. You're not asking permission. You're asking a this or that question. What's even better is train your servers to bring bread or chips after asking about appetizers, not before. Why?
[00:17:20] Because free bread or the free chips and salsa kills appetizer sales. If guests are munching on bread, they don't feel hungry enough to order an appetizer. One restaurant I worked with made this one simple change. They stopped bringing the chips and guac or the chips and salsa automatically. They trained the servers to suggest an appetizer first. Appetizer orders increased from 25% of the tables to over 40% of the tables. They averaged 350 tables per week.
[00:17:45] 350 tables times that 16% increase equals 56 additional appetizer orders per order. It was an $11 average per appetizer. 56 appetizers. That was over 600 bucks a week. It averaged out to about $32,000 per year. The lesson here is, don't leave revenue on the table. Train your staff to capture every check opportunity.
[00:18:08] Number seven, Build a strategic takeout program.
[00:18:12] Most restaurants treat takeout as an afterthought. Something on the side. Oh, you want to order? To go? Sure, I guess. Fine. That's a mistake.
[00:18:20] Takeout is a completely different revenue stream with different economics. No tables to turn, no servers to tip. Higher volume potential. But most restaurants price their takeout menu the same as dine in. But think about it. Dine in has costs that takeout doesn't. Server labor, table maintenance, ambiance, the overhead, the, you know, longer service time.
[00:18:41] Takeout should have higher margins than dine in. But here's what smart operators are doing differently. First, they create takeout optimized menu items. Not everything travels well, so focus on the things that do. Second, the smart operators design packaging that actually maintains quality. Bad packaging equals bad food equals bad reviews equals lost future revenue because they're not going to order again.
[00:19:03] The third thing they do is they make ordering easy. So online ordering food, ordering text to order, whatever works make it easy. Fourth, they build a repeat program, order online and order points. Or every fifth order gets 20% off or free delivery for orders over 40 bucks. One restaurant that I was working with was doing $8,000 a month in takeout. That's it. But we build out a proper program, meaning we streamline the menu to 20 high margin, travel friendly items. You don't have to make everything available. They used to have everything available. We cut it to 20.
[00:19:36] We added online ordering. We created a loyalty program specifically tied to takeout and delivery. And we trained one staff member to own takeout. Seemed weird, but we grew it. Right. It increased to $18,000 a month in 90 days. Literally 8 to 18. That's $10,000 in additional monthly revenue. That's an extra $120,000 per year. If you're doing the math, this was a one million dollar restaurant. They increased their their revenue by 12%. So simply by making this a priority from treating takeout like an actual business, instead of an inconvenience, instead of a side dish, they made it the main course. The lesson here is takeout is a separate revenue center. Therefore it's a separate profit center. If you build it intentionally, it can help you.
[00:20:19] Finally, the number eight implement minimum requirements. It's a weird one. Let's talk about it. This one makes some operators uncomfortable and I get it. But it works.
[00:20:29] If you have prime seating, meaning window tables, patio tables, a booth, you're giving away valuable real estate for free. A two top by the window on Saturday night is worth more than a two top in the corner on a Tuesday lunch. Why charge the same? Smart restaurants and I'm watching people do it, they are implementing strategic minimums. Patio tables have a $50 per person minimum on Friday and Saturday nights. Window tables require an appetizer or dessert and entree per person. Bar seating is first come, first serve. Dining room reserv have a $40 per person minimum. What happens is you get three things. Number one, it increases your check average. I promise it does. Second, it ensures that your best tables generate appropriate revenue. Third, it attracts guests who actually want to spend. They want to be there. They want to celebrate. They're going to spend more work. To the restaurant that did this, they had eight premium patio tables. And to be honest, this was not my idea. This was somebody else in the group. They recommended it and I was an observer and I'm merely passing it on.
[00:21:29] So eight premium patio tables on a summer Saturday night. They'd book all eight tables at 6pm Average check per table, 85 bucks. They implemented a hundred dollar per table minimum for patio reservations after 5pm on the weekends. The result? Some guests chose inside seating instead. Fine, those tables needed to be filled anyway. But most guests who took the patio tables hit the minimum easily. By ordering drinks, by ordering appetizers, by ordering desserts.
[00:21:58] Eight tables times that. Fifteen additional dollars per table meant 120 bucks on a Saturday. That's 480 bucks a month during the summer. Right. Sixteen Saturdays. The bigger win. It set expectations. Guess who booked patio tables, came ready to spend. The average check actually increased to $125 per table. So eight tables times that $40 increase was 320 bucks a night. It was over $5100 over the summer season. The lesson here is that your premium seating is valuable. So price it accordingly. Here's the bottom line. Right, we're going to recap these eight strategies. Number one, fix your menu. Guide guests to high margin items. Number two, stop giving away the add ons, Charge for the upgrades. Number three, engineer your drink menu, meaning create premium beverage options. Number four, implement strategic pricing tiers. Right, we're using price anchoring. Number five, maximize those table turns. Six, capture the check, meaning train your staff to upsell at every point in the meal to get the extras, the add ons, the appetizers, the after dinner drinks with desserts. Number seven, build a strategic takeout program. Treat it as the profit center it can be. Number eight, implement minimum requirements. Right, if you have valuable seating. If there is supply and demand.
[00:23:17] Right. If you have limited supply and there's high demand for these tables, then charge accordingly.
[00:23:22] Notice what all eight have in common.
[00:23:24] Not one requires spending more money on your marketing. Not one requires you to get any new customers. Every single strategy today makes more money from the customers you already have. That's the difference between operators who build wealth and operators who just stay busy. Busy operators chase new customers. Wealthy operators maximize the customers they already have. Here's what I want you to do. We're going to make this actionable and pick just one strategy from this list. Just one of these eight. Implement it this week. I don't want you to try to do all eight. That's how nothing gets done. Just pick one. The one that resonates most, the one where you thought, man, we are definitely leaving money on the table there. We can do it. So execute it. Measure the results, then come back.
[00:24:11] Then come back and implement the next one. I promise you, if you execute even half of these strategies over the next 90 days, your revenue will increase by 15% or more again without spending a single dollar on marketing. That's not theory, that's math. And if you want help again implementing any of these, because this is what we do in the program, then let's Talk. Go to restaurantstrategypodcast.com Schedule book a free 30 minute call. We'll look at your operation, we'll ask you a bunch of questions, you'll ask us a bunch of questions. And let's identify exactly which strategies will have the biggest impact. And the coaching program is how we set action items to actually make it happen again. RestaurantStrategyPodcast.com Schedule the link, as always, is in the show Notes. I appreciate you tuning in to this the Restaurant Strategy Podcast. I will see you next week.
