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How to Run a Successful Restaurant


Starting or taking over a restaurant is an exciting entrepreneurial adventure, but it sure comes with a few challenges. If you’re a new restaurant startup, it might feel like you’re ages away from creating a successful business. It might seem like instead of being flooded with new customers, you’re struggling to build a steady revenue. But don’t get too discouraged because there are things you can do to ensure you’re on the right track. This article is designed to help restaurant owners better understand how to establish and run a successful restaurant business in their most volatile stage (during the first 1-3 years).


Restaurant Business Fundamentals

Every business – no matter what it sells – needs to be able to set itself apart from its competition and attract enough of the right customers to become profitable. That might seem simple, but it isn’t always easy. It usually takes more than a ‘build it and they’ll come’ philosophy to grow a successful business. Here are a handful of basics to help benchmark yourself against competitors in your industry and ensure you have the fundamentals covered:


Define your USP

You and your customers should know what makes you different. You need to tell them why they should spend their hard-earned money on your restaurant and not go somewhere else. And they need to know within the first few minutes of learning about your business. Being able to quickly and effectively communicate your unique selling proposition (USP) is the pinnacle of your marketing strategy. If you don’t already know what makes your restaurant special, ask yourself these questions:

▪ What value can your business offer that others can’t?
▪ What cuisine will you serve? Will it be a single cuisine restaurant or fusion type?
▪ Will your menu be simple, focusing on a signature dish, or will you have an extensive menu with a wide variety of foods? (Keep in mind that the less you have on your menu, the more you can specialise in the items you do offer)▪ Does your interior decoration stand out from competitors? Is your restaurant themed?


Identify the Ideal customer

No matter how hard you try – some people will love your restaurant more than others. Don’t waste your precious resources trying to cater to everyone: find the people who will like your restaurant and ignore the rest. This will also help make your marketing more effective. It will ensure you’re talking to the right people in their language, on their platforms, and about stuff they care about. Aspects of customers that you should take into consideration when trying to figure out the ideal customer’s profile are things like interests, demographic, location, life stage, values, etc.


Determine your channels

There are a variety of ways to market to new customers. Three main overarching channels include online, offline and on-site. You will probably have a variety of all three but should focus mostly on the platforms that are giving you the most return on investment. Be where your people are. If your audience isn’t on Facebook, then you shouldn’t be either. Instead, look into other platforms like Pinterest or Instagram. Don’t be afraid to test out different marketing ideas and constantly re-evaluate your marketing to make it as successful as possible. Remember that no matter how you market, you should have one voice, one brand, and one message throughout. Your customers should be able to recognise your advertising no matter where they see it. Having an omnichannel strategy like this will help customers remember you when it’s time to eat or plan a get-together with friends because they’ll have had more encounters with the same advertising.


Obtain a Restaurant Licence

It should probably go without saying, but you need to be legally compliant before opening your restaurant. What might not seem so obvious though is what certificates, permits and licences you need to be compliant. This can vary state-to-state and be based on what your restaurant offers. In Melbourne, all restaurants need to prepare a Food Safety Program and nominate a food safety supervisor before they can even register, and you need a Certificate of Registration to comply with Food Act 1984. If you’re serving alcohol, you will also need to have a liquor licence. Visit your local council or government’s website to get a full check list of requirements and any associated fees.


Choose a Location

It’s a big commitment to sign a lease, so make sure the location ticks off all the important boxes. A few parameters to consider are:

o Competition in the area – are there established restaurants that already service your potential customers? Do these existing restaurants serve a similar cuisine or is there a gap for you to fill?
o High foot traffic – is it easy for people to stumble upon your restaurant, or is it on a side street that is hard to see from the main road? If it isn’t on the ground floor, is there good signage for people to see your location within the building?
o Rent – is the market rate affordable for your budget? You can ask nearby stores and consult with other property agents to get an idea of prices.
o Proximity to ideal customers – if you’re targeting professionals after work, then be by their offices. If you’re looking to appeal to families then be by residential areas or shopping centres.
o Interior space – how many tables and seats can you fit in the space? Where will the kitchen be located?
o Utilities – will there be bathrooms? If they’re outside your store, can you guarantee they’ll be clean?


Invest in your equipment

Having the right equipment will set you and your employees up with the ability to create the best food, service and experience possible for your customers. The shopping list can add up quickly though, making it seem impossible to be able to afford everything. Luckily, there are equipment finance loans that allow business owners to have everything they need from day one.

Everything your customers see and encounter such as the POS system, computers and cash registers need to be up-to-date and user-friendly. Your furniture, decorations and music system need to be enjoyable. Your kitchen and bar equipment (if you serve alcohol) needs to be reliable. Don’t cut corners on anything that adds to your customer experience.


Loss Prevention and Security Measurements

After putting all this time and effort into your restaurant, the last thing you want to happen is a break in or theft. Adding security to your business plan is an important way to mitigate unnecessary risks. This could include having an alarm system on your external windows and doors. It could also mean installing cameras to capture the cash registers. Be careful about overdoing it with too many security cameras though, because that can make customers feel uncomfortable. Last but not least, take out the right insurance for your restaurant. Make sure your policy covers the costs for your key equipment, inventory and building.


Implement a Marketing Strategy

Marketing allows you to reach hundreds and even thousands of people who otherwise wouldn’t know about your restaurant. Make sure to dedicate resources towards developing your marketing strategy and regularly reevaluate the progression of each tactic to maximise the value of your marketing spend.


Some people only think of marketing as advertisement that pops up online, but marketing extends through to how customers physically view your store. Take the time to intentionally build the experience your customers have when they make a purchase, what they’ll see when they walk in, and how your staff interact with them.

Consider all the details such as what you’ll display at the counter (e.g. lollies or sweets, takeaway menus, business cards and social media accounts), what will be where (will you place toothpicks on the restaurant tables or at the checkout counter?), and what roles your staff will play in the serving (will there be self-serve water on the counter or will waiters personally bring out water for customers?).



There’s always a risk when trying a new restaurant – it could be a waste of money, the food could be bad, and the service could be average. Lowering that risk for people to try your restaurant will help them overcome the hesitation to try something new. One way to do that is by reducing the cost. Promotions are a brilliant way to draw in new customers and loyalty promotions establish a recurring clientele base.
Promotions could include reduced-price set menus, lunch menu specials, rotating menus (e.g. weekly burger, pasta, etc.) and group prices or catering prices. Loyalty promotions might focus more on BOGO (Buy One Get One) strategies such as ‘dine with us 9 times and eat for free!’ or giving out birthday vouchers/discounts.


Word of Mouth

Testimonials and word-of-mouth referrals are another golden way to convince new people to try your store. People trust other people’s opinions – even strangers! Make it easy for your customers to leave testimonials through written questionnaires on tables and online review pages. There are many online review platforms consumers use to share their opinions. Some popular ones include TripAdvisor and Zomato. Share the reviews you have on your website, social media pages, and in your advertisement. Encourage people to bring in friends with group discounts or special deals.


Developing online marketing strategies to promote

When you develop your online marketing strategy, make sure it includes a website, Google My Business account and social media accounts. All these platforms should make it easy for potential customers to learn about your restaurant. This includes important details such as:

▪ NAP (Name, Address, Phone Number) as well as business hours
▪ Menu and service offerings
▪ Website URL and social media accounts
▪ USP – share what makes you different
▪ Current promotions


Recruit High Quality Staff

Most small business owners are new to the recruiting game, so don’t underestimate the importance of having a highly qualified staff. They will become the face your customers see and who they associate with when thinking about the level of service they received.


High Quality Employees

Good employees will make your life easier. They’ll provide top-notch service, be trustworthy, and rarely make unnecessary mistakes such as in delivery, inventory count, and sales. Consider hiring waiters/hostesses/chefs with previous experience even though this might mean paying a higher wage. The phrase ‘a penny saved is a penny earned’ doesn’t apply when that saving ends up costing time, money and effort when you need to offer free meals to make up for a mistake or when you need to rebalance the numbers. Offering a competitive salary will also show your staff that you respect their skillset and appreciate the value they offer both to you and your customers.


Regular Training

Regardless of how much experience your staff has before joining your team, give each one a comprehensive onboarding session and regular training. This will ensure that everyone follows the same processes and provides the same level of customer service no matter who’s on shift. Providing opportunities for your staff to learn and grow will also make you a competitive employer and minimise unnecessary turnover.



Inventory Management

Successful restaurant owners carefully manage their cash flow and stock levels to make sure they match up with market/customer demands as close as possible and avoid overstocking. Keep track of previous months’ and years’ numbers so you can accurately forecast for the future. This includes taking busy and slow seasons into consideration such as holidays, school schedules and tourist seasons.

To help manage your wholesale costs, negotiate with your suppliers for bulk deals. Once you’ve built a relationship with them, you can push for discounts based on your regular business. Lowering the cost from the backend without changing the price of your food will help you to pocket a larger margin.



Many business owners find themselves in a love-hate relationship with money, especially as they come to realise how much it takes to run a restaurant. Quickly establishing a budget will help eliminate some anxiety around end-of-month reporting as it helps you stay organised and with a clear picture of gross vs net income. Forecasting future business expenses – both monthly and quarterly – can provide a guideline for what you need to set aside each month for fixed/regular costs.


Expense Checklist

One way to keep track of a seemingly endless amount of bills is to create an expense checklist. This is especially helpful for invoices that come infrequently or quarterly. It can serve as a reminder to put aside cash every month so you have a pool of money to pull from when it’s time to pay. A few generic expenses that could be on your list are:

o Rent
o Phone
o Internet
o Store insurance
o Electricity/Gas
o Advertising
o Garbage
o Taxes
o Payroll & accounting costs
o Water bills
o Credit card fees
o Bank fees
o Inventory


Learn how to grow sales and re-invent your restaurant small business.

About OnDeck

OnDeck offers flexible business loans that solve a need for extra funding. Whether it’s the restaurant start-up costs, buying materials, covering a cash flow shortfall or getting some new equipment for a project, OnDeck can help you.

With an easy online application process, loans of between $10k and $250k, and terms of 6 to 24 months, we make it simple for businesses to get the extra funding they need.

Apply online in minutes at or call our helpful team on 1800 676 652 today.


Prepared by OnDeck Capital Australia Pty Ltd ABN 28 603 753 215 (“OnDeck”) for general information purposes only. Content may belong or have originated from third parties and OnDeck takes no responsibility for the accuracy, validity, reliability or completeness of any information. Information current as at February 2020. You should not rely upon the material or information as a basis for making any business, financial or any other decisions. Loans issued in Australia are subject to the terms of a loan agreement issued by OnDeck. Loans are subject to lender approval. OnDeck® is a Registered Trademark. All rights reserved.