Careers Business Ownership The Basics of Restaurant Management Share PINTEREST Email Print Geri Lavrov / Getty images Business Ownership Industries Restauranting Retail Small Business Real Estate Nonprofit Organizations Landlords Import/Export Business Freelancing & Consulting Franchises Food & Beverage Event Planning eBay E-commerce Construction Operations & Success Becoming an Owner Table of Contents Expand Providing Customer Service Setting Job Expectations Advertising Your Restaurant Monitoring Cash Flow Expanding Sales Cutting Costs The Bottom Line By Lorri Mealey Lorri Mealey Twitter Lorri Mealey has nearly a decade of restaurant experience, including owning and operating her own restaurant in Western Maine. Learn about our Editorial Process Updated on 08/20/19 Effective restaurant management involves several challenges, such as public relations, inventory, staff, and customer service. In some instances, a restaurant owner may also serve as the manager. Either way, a strong manager is an essential component of a successful restaurant—they are usually the person who handles both staff and customer issues. The following information explains the important basics for properly managing a restaurant. Providing Customer Service "The customer is always right" continues to be the golden rule of any business. Even if you disagree with a customer’s complaint, how you handle the situation will determine whether the customer returns. Your goal is to keep the customer experience positive. Tips for Successful Restaurant Management Run a successful restaurant business and avoid costly mistakes by doing the following:Effectively deal with customer complaints to encourage return visits.Manage job expectations of staff to ensure they give optimum effort.Take advantage of current modes of advertising to gain the most exposure.Monitor revenue and expenses to ensure the restaurant is operating optimally.Determine ways to increase sales such as special promotions, catering services, menu changes, and entertainment. Setting Job Expectations From the waitstaff to the house kitchen staff, finding the best person for each role will help your restaurant run smoothly. When interviewing candidates, be sure to check references to determine if they will be a good fit for the position. Also, establish a trial period before hiring them permanently. Not only should workers be skilled in performing their job, but they should also possess strong interpersonal skills, as their job will likely depend on the work of others. An example is waitstaff who depend on the chef to complete the correct orders in a timely fashion. To keep staff motivated and working at a high level of service, consider incentives such as vacation days, bonuses, and free meals. Also, offer promotions for those who are ready to move to the next level. You are also a relationship manager, who must ensure your staff continue to work as a team to deliver great food and service to customers. It's important to keep the lines of communication open so staff feels free to come to you with any issues or concerns. Advertising Your Restaurant There are a variety of ways to advertise your restaurant. In addition to keeping customers happy so they spread the word, it's important to look for opportunities to gain exposure. These include having an online presence such as a website, which may include photos, menus, and promotions. Also, social networking offers a low-to-no-cost way of promoting your restaurant. Monitoring Cash Flow Cash flow is the amount of cash coming in versus the amount of cash that's going out of your business, and it should be monitored on a daily, weekly, and monthly basis. It is important to understand this basic concept of restaurant finances to avoid financial risk. Employ a point-of-sale (POS) system to track sales, cash flow, and food inventory. This can greatly simplify day-to-day restaurant management and help trim food costs and payroll, as well as track the popularity of menu items. Expanding Sales A daily business review report allows restaurant managers to build a history of their business. It can help analyze sales trends, payroll costs, and customer counts, and predict future sales. Restaurants have a built-in catering clientele in their customer base as well as the resources: food, equipment, and staff. Consider expanding into catering large and small events. Also, feature promotions to gain attention and increase sales. These can range from a nightly happy hour to prix fixe menus to two-for-one dinner specials. Settle on one or more that best suit your clientele. The price of food can change frequently, so the cost of running your business will also change. It’s important that restaurant menus have prices that keep food costs low and profits high. With this in mind, keep your menu interesting and make sure customers receive value for their money. While you want to keep costs low, you also don't want to serve poor quality food to customers. Cutting Costs Switching to energy-efficient light bulbs and low-flow faucets are just two ways that restaurants can save money, not to mention the environment. Look around your establishment for hotspots that require less cost without hurting the customer experience. For example, you may be saving money by replacing chairs with less expensive ones, however, customers may not return if they become uncomfortable while dining. The Bottom Line Managing a restaurant involves many different responsibilities, from hiring and firing staff, to tracking sales and basic accounting. As a restaurant manager, it is your responsibility to make sure operations run efficiently to provide optimum service to customers.