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Financial Goals

8 Ways to Grow Your Restaurant Business

7 min read
food on restaurant table
picture of author, Hometap TeamBy Hometap Team on May 5, 2022

The restaurant industry is a notoriously tough one to succeed in — but with quality food and service, the right attitude, and calculated strategies, it’s not impossible. If you own a restaurant, you understand that it’s a labor of love. You’re passionate about the food you make and the environment you’ve created for your community. And if you’re ready to expand, you’ve got a few options: you can grow your operation within a single location, or you can grow your number of restaurant locations. Here are some ideas for helping you expand your eatery’s presence and boost its revenue while you’re at it.

Grow Sales at Your Current Location

1. Make connections in your community

Whether it’s with fellow restaurateurs, potential patrons, or other businesses in your area that make sense to partner with — the more people you know, the more opportunities you have to spread the word about your restaurant business and bring in more customers. Often, communities have local food events that showcase area cafes, food trucks, and eateries with abbreviated menus, and they can be a great way to get your name out there while providing samples of your cuisine to potential future customers.

2. Think outside of the box when it comes to marketing

For any business, half the battle is getting the word out, and inventive marketing can go a long way to get the attention of future customers. If you’re just starting out, building a sense of mystery (but not too much) around your restaurant through social media or community flyering can pique the curiosity of patrons and get them in the door. In addition, coupons offering a discount or free item for first-time customers provide a tangible incentive to draw in business.

3. Host live entertainment, games, or trivia

You’re more likely to bring in business if you’re giving customers an ongoing reason to stop by — beyond your delicious food and beverages. Look at hosting a weekly pub trivia night through a company that specializes in it, a stand-up comedian, or a live musician or band to keep things fresh and build your brand.

4. Make changes to the menu (or the space)

Every restaurant needs the occasional facelift, whether it’s in the form of a revamped menu or some reupholstered booths. If things are feeling a little stale, start small by introducing a couple new offerings and testing how well they sell — or making a small cosmetic change like repainting. These steps can go a long way toward improving diners’ experiences and bringing them in for repeat visits.

5. Consider creating a loyalty program

If you have a core customer base, a structured system of rewards and discounts for frequent and new patrons alike can give them even more incentive to come back. In fact, a Gartner report estimated that 80% of a restaurant’s future business comes from 20% of its current customers. There are a few different types of loyalty programs to consider, but one of the most common and popular choices is rewarding customers each time they dine with you, whether it’s by earning points that they can redeem for a meal, or reaching a certain number of visits to receive a voucher.

6. Offer catering (or expand takeout options)

Expanding your offerings to provide larger portions at higher prices for events like weddings and company functions can help pad your bottom line and bring in some extra cash. Before pursuing this route, though, make sure you have both the time and staffing resources to dedicate to events you may be contracted for, as catering can be a fairly big undertaking and a less-than-stellar client experience can have the opposite effect and get people talking about your business — in a negative way (we’ll dive further into this below). Alternatively, you can expand into takeout if you’re currently not providing it, or simply consider making it available through more apps if you already offer it.

7. Monitor and engage with reviews and social media

With so many review sites and social media apps, it’s easier than ever not only to see what people are saying about your business — but to respond to them. In addition to a standard website, you’ll want to make sure you create profiles on all of the major social media sites: Instagram, Twitter, and Facebook. Sites like Yelp typically allow you to “claim” your business’s page, so you can reply directly to reviews. For prospective patrons, being able to see that you address any negative experiences and make it right for the customer can help to give them a more positive impression of your restaurant.

8. Expand to an Additional Location

If you’re experiencing enough demand and sales at your flagship location, an outpost can be a great way to build upon that success. You’ll also have the unique advantage of being able to capitalize on your existing name recognition within the community — and market your new location at the first.

However, it isn’t as easy as it seems. First, you’ll need to create a completely new business plan that includes financial estimates for rent, staff, and any material/construction costs. There’s also the consideration of geography, as it makes the most sense for your new space to be near the first if you’re expanding due to capacity issues.

You’ll want to answer the following questions before you commit to pursuing another location:

  • Will you be able to successfully divide your time between the two places — or is there someone you trust that can serve as the manager at the outpost?
  • While the second location is starting out, is the flagship doing well enough financially that it can support it? If not, do you have alternative funding options?

While many of the ideas for expanding your existing restaurant don’t cost anything to implement, some of them — like marketing, renovating, catering, and entertainment — might require additional funds that can stretch your already-tight budget. And opening a second location will require a significant amount for construction, hiring, and more.

small business financing options

If you’re a homeowner who could use some extra cash for their restaurant business, consider a home equity investment from Hometap, which can get you the money you need in as little as three weeks. The best part? You can use it for whatever you’d like. Take our five-minute quiz to see if a Hometap Investment might be a fit for you.

You should know

We do our best to make sure that the information in this post is as accurate as possible as of the date it is published, but things change quickly sometimes. Hometap does not endorse or monitor any linked websites. Individual situations differ, so consult your own finance, tax or legal professional to determine what makes sense for you.

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Hometap is made up of a collaborative team of underwriters, investment managers, financial analysts, and—most importantly—homeowners—in the home financing field that understand the challenges that come with owning a home.

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