10 ways to increase your restaurant profits

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There are no magic tricks or recipes to increase the sales of your restaurant. However, you can create a strategy or implement a plan to boost your restaurant sales. In this article, we share tips to help you increase the income of your restaurant.

Is the restaurant industry profitable?

The restaurant industry is very competitive so running a profitable and successful restaurant can be challenging. You’re probably thinking, What’s the reason behind this? What affects the profit margin of a restaurant?

High employee turnover, high labor and equipment costs, real estate costs and other factors make many restaurants difficult to operate. A restaurant can be very profitable if run properly, or very unprofitable due to poor management.


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What is the average profit margin for a restaurant in Canada?

Generally speaking, the average profit margin for restaurants is usually between 3-5%, although the average net profit margin varies according to the type of establishment:

  • Food trucks: 6-9%
  • Fast food restaurants: 6-9%
  • International food restaurants: 3-5%
  • Gourmet restaurants: 4%
  • Catering: 7-8%
  • Pubs and bars: 10%

Profit margin is the ratio used to measure the percentage of the restaurant’s revenue converted to profit. For example, if your restaurant’s profit margin is 35%, it means that you can make a profit of $ 0.35 for every dollar you generate through sales.

There are several types of profit margins, but the two main types are net profit margin and gross profit margin:

  • Net profit margin is the most widely used type of profit margin. It refers to the restaurant’s total profit after deducting all expenses from total revenue.
  • Gross profit margin refers to the remaining profit after deducting all the expenses related to the service. Unlike net profit margin, gross profit margin doesn’t consider expenses such as taxes.

What type of restaurant is most profitable?

There are 5 types of restaurants that stand out for being more profitable and which will set a trend in the future in the medium term.

1. Niche/single product restaurant

Customers are always looking for niches that they like and want to tap into. For example: vegan or gluten-free restaurants, which have become very popular in recent years.

For single-product restaurants, the costs associated with menu design, maintenance and kitchen are usually cheaper. A good example of this is a restaurant that specializes in waffles or hot dogs.

Of course, the secret to having a profitable restaurant is always creativity and innovation. Use the example of an ice cream parlor that reinvents itself with new flavors every year as inspiration.

2. Food trucks

Food trucks are one of the best and most profitable restaurant business models in recent years. Although it’s true that many people already sell artisan burgers, fries or burritos, the food truck proposal goes a step further.

Only one vehicle such as a van has to be adapted to provide customers with a comprehensive and innovative experience. As for the dishes, most are quick to prepare and easy to eat without having to sit down at a table: pasta, tacos, hamburgers or sandwiches.

3. Gastrolounge Restaurants

This is one of the hipster trends that is becoming more and more popular. If your restaurant has the coolest, most modern vibe in town, you’ve on the road to success!

To achieve this, you just have to choose a strategic location in a fashionable neighborhood, adapt it with an eco-friendly or modern tone and design a suggestive menu, although it doesn’t necessarily need to be filled with signature dishes. The kitchen will play an important role. Gastro restaurants can charge a little more, since they offer a unique proposal.

4. Pre-prepared food restaurants

This is another profitable business model that has been emerging in the last year. Restaurants that deliver tuppers with pre-prepared food are not ordinary businesses. This business model is digital, so the customer will never see the kitchen or the restaurant.

This means that you can assemble the kitchen anywhere to optimize fixed costs. You can achieve huge savings with this type of restaurant model as well as benefit from opportunities of growth.

Do restaurants make more money on food or alcohol?

The profit margin from alcohol is higher than food so restaurants usually make more money on alcohol than on food. If we take into consideration the total cost of kitchen maintenance, the issuance of licenses and the salaries of the qualified staff that prepares food, the sale of alcoholic beverages definitely generates a greater profit margin.

5 effective ways to increase bar profits quickly

Tips to boost your restaurant profit margins

1. Create a website for your restaurant

Having a website for your restaurant is super important. If you’re not on the internet, you basically don’t exist for a ton of potential customers. Thankfully, getting your business online is pretty straightforward.

With platforms such as Wix and Square Space, creating a website doesn’t require a lot of time and money. When building your website, make sure to include your location, photos of your main dishes, a telephone number for reservations and if you want, your menu.

2. Optimize your website for search engines

Having a SEO strategy will make you get a lot of potential new clients. For example, if you have a Midwest-themed restaurant, you want to be on the first page of Google every time someone does a relevant search.

To do this, you should pay special attention to the articles published on the website and choose your keywords carefully. It’s advisable to create a blog section with articles that your target audience will feel enticed to read and share.

3. Take care of your TripAdvisor listing

When choosing a new restaurant, thousands of people browse TripAdvisor every day. People pay close attention to the reviews, ratings and images of each restaurant. Therefore, you have to make sure that your future clients have a good first impression of your business.

Make sure that the restaurant information is updated and complete (hours, menus, prices, additional services, etc.). Respond to both positive and negative feedback in a proactive manner.

4. Invest in the right inventory app

No matter what stage your business is in, a restaurant inventory application can be extremely helpful. If you have just opened a new restaurant and are not sure where to start, Rapidbar app can help you manage orders, sales, food inventory supplies, and even help you reduce costs. It’s also very useful if your business has been operating for years and wants to optimize its operations and profits.

If your business needs an easy way to manage costs, reduce inventory shortages and identify the causes of inventory losses, our restaurant inventory management software provides solutions for all these. Save time, increase profits and run your restaurant easily with the best restaurant inventory management software.

5. Partner with different food delivery apps

Food delivery apps have become very popular, especially in the last year. This is a great resource to reach more customers and increase your restaurant’s sales. Many of these apps offer services that are quite interesting, such as additional discounts or customer reviews. This option is very attractive to gain new customers, as it builds trust in your business.

6. Work with influencers

Another way to have good reviews and make your restaurant more popular is through influencers. These influencers are usually food bloggers and one way to attract them is to simply invite them to eat at your restaurant for free. This is a great way for them to share their experience with all their followers and increase your visibility.

7. Create themed events

Themed events can liven up your restaurant. They can take your restaurant out of the normal routine and attract the interest of new diners who have never considered eating at your business before.

If you’re not sure what type of event to create, think of something trendy or seasonal. For example, you can celebrate 5 de mayo with typical Mexican food, or offer an all you can eat menu on hot wings for the Super Bowl.

As you plan these events, think about the services you can provide. Consider the skills of your chefs and waiters to make sure the results are ideal. Also consider the types of customers you want to attract. This is a very interesting and fun way of increasing your profit margin!

8. Organize live music performances or comedy nights

Everyone likes entertaining nights! Why not organize quality live music gigs or stand-up comedy shows? This will allow your restaurant to become a reference in your city and you will be able to have a full house more frequently.

You just have to be consistent and schedule the performances in advance. If you want to save a little money, try to book amateur and local artists! They will almost always bring friends and this will help you sell more.

9. Offer food samples

If you’re proud of how delicious your food is, let people know it! Just like when they offer you samples of new products or brands to try in the supermarket from time to time, you can also do the same with the dishes on your menu.

Let’s imagine that your specialty is grilled salmon. You can prepare a plate of grilled salmon and go out to give free samples. It’s important to choose the right time and place yourself in a strategic area that can generate traffic for your restaurant. If you do it consistently shortly before lunch or dinner, it can be a great way to quickly increase your restaurant’s sales!

10. Consider sensory marketing

If you don’t know what this type of marketing is, think about what happens every time you pass a movie theater that smells like freshly cooked popcorn or a bakery that smells like freshly baked bread. You can create the same effect in your restaurant to attract customers!

Choose a pleasant scent that can be easily smelled on the street. This effect will attract the attention of passersby and help you attract new customers. At least your restaurant will not leave people indifferent, and if you do it right, this will definitely increase your restaurant’s sales.

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