Keep Your Restaurant Profitable with These Best Practices

Happy summer everyone! Every month, I try to offer guidance related to the tough job of running a restaurant efficiently and profitably, with suggestions that come from my 45 years of experience in the hospitality business. Managing a profitable restaurant is certainly no simple feat. This month, I take a slightly different approach and present 10 best practices for maintaining your restaurant’s profitability, compiled from the insights of my CohnReznick colleagues.

1. Start with a comprehensive menu review.
Spend time analyzing what sells, what doesn’t, what is easy to prepare, and what is labor intensive. Can you increase prices on some items and eliminate others? Check the marketplace — are you competitive?

2. Drill down on the contribution margin of menu items.
Dollars pay the rent, not percentages. If a menu item isn’t generating dollars, should you keep it?  Go over recipes with chefs and implement weekly budgets for spending.

3. Look at your hours of operation.
Can you modify the hours you are open? Would it be beneficial to open later, close for lunch, or close earlier at night? A change in your hours of operation may allow you to reduce labor hours and costs. Do this now before new regulations go into effect.

4. Reward top performers.
Create incentive plans for employees who produce better sales. Keep the best staff and pay them well. This will ensure a more profitable operation and a more successful brand.

5. Control your cost of goods.
Utilize smart purchasing. Ask vendors to give you discounts for early payment and vet out alternative vendors. Focus and incentivize the kitchen staff, eliminate waste, and count the inventory!

6. Consider delivery.
There are companies that can make this turnkey for you. Curbside has had good success for several of the chains. Will home delivery work for you?

7. Marketing, marketing, marketing.
Review your social media strategies and guest retention programs. It is much easier to get a guest to return more frequently than it is to attract a new one.

8. Can technology be a solution?
Depending on what kind of restaurant you are, technology may be able to help lower your head count. There are robots that flip hamburgers and tablets that take orders and enable guests to pay. There are machines that can make the perfect cup of coffee. It’s only a matter of time before all of this becomes commonplace.

9. Re-run your budgets.
Make adjustments for new menu pricing and items and tweak your labor schedule. If you don’t have budgets, you need to build them now. Review flash reports daily and weekly with your management team. These reports are easy to implement and provide a wealth of information to run your restaurant more efficiently.

10.Focus on culture and motivation.
Make sure everyone is rowing the boat in the same direction. From the host/hostess to the wait staff to the dishwasher — get the whole team involved. This business is made by watching the nickels now more than ever, and your entire staff needs to be more vigilant.

For further insight on fostering the growth of your restaurant business, visit CohnReznick’s Hospitality Industry Practice webpage: Stay tuned for next month’s column, which will expand upon best practices for maintaining your restaurant’s profitability.

About the Author

Henry Pertman is Director, Hospitality Consulting at CohnReznick LLP, located in the firm’s Baltimore, Md. office. He can be contacted at 410-783-4900 or

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