Hello, I am John Chen. I run 5 restaurants in California for 15 years now. I started with one small Chinese restaurant, then added Thai, Japanese, and two fusion restaurants. I want to share what really works to make more money in restaurant business. Many experts give fancy advice, but I will tell you real things that worked for me and my restaurant owner friends.
1. Introduction
Restaurant business is very hard in 2025. Food costs go up every month – my chicken costs increased 40% just last year! Finding good workers is difficult – I pay $22 per hour for dishwashers now. Big delivery apps take too much money (up to 35% per order!). But still, my restaurants make 32% more money than last year. How? I will share everything I learned.
Many restaurant owners lose money because they follow old ways. In my first restaurant, I lost $50,000 in six months. I almost gave up. My wife wanted me to sell restaurant and get normal job. But then I learned new ways to make money. Now each of my restaurants makes $80,000-120,000 profit every month. Most important thing I learned: being good cook is not enough – must be good businessman too.
2. Understanding Your Restaurant’s Sales Performance
First, you must know your numbers. Many restaurant owners don’t check their numbers daily. Big mistake! I know one owner who only checked numbers at end of month. By then, too late! He lost $200,000 before closing restaurant. I check these things every day:
– How much each dish costs to make (food cost calculator on computer)
– How many customers come in each hour (door counter system)
– Which servers sell most food (POS system reports)
– Which dishes people order most (daily sales report)
– Labor cost percentage for each shift
– Average ticket size per server
– Table turnover rate during peak hours
My best learning came when I found out my most popular dish, kung pao chicken, was making me lose $2 on each plate! I was selling 200 plates every day. That means I was losing $400 daily on my best-selling dish! After fixing the price and portion, that same dish now makes $4 profit per plate. That’s $800 daily profit! Simple math made big difference.
3. Menu Engineering and Optimization
Let me tell you something controversial: fancy menus with many dishes are stupid. Yes, I said it. Every extra dish in your menu costs you money in inventory and training. In 2020, my first restaurant had 86 dishes. Now it has 25 dishes. Guess what? Sales went up 45%! Why? Because:
– Kitchen makes food faster
– Food quality more consistent
– Less inventory waste
– Staff remembers all dishes
– Customers decide faster
– Each dish gets more attention
Here’s exactly what I do for menu:
– Keep best-selling dishes that make good profit
– Remove dishes that sell less than 5 plates per day
– Make dish descriptions simple but tasty (example: “Crispy chicken with sweet-spicy sauce” better than “Traditional General Tso’s Chicken with house-made sauce”)
– Put most profitable dishes in menu’s top right corner (eye tracking studies show people look there first)
– Raise prices every 6 months by small amount
– Use good pictures for only best dishes
– Have one “super expensive” dish that makes other dishes look cheaper
Real example: My Thai restaurant had green curry for $13.99. Nobody complained about price. I raised it to $14.99, then $15.99, then $16.99 over 18 months. Sales stayed same. That’s $3 extra profit per dish, 100 dishes per day = $300 daily extra profit. When customers complained about price (very few did), we offered small portion option for $13.99. Funny thing – less than 5% order small portion!
Another real example: Put one wagyu beef dish on menu for $89. Almost nobody orders it. But now $28 steak looks cheap! Steak orders went up 45%!
4. Digital Presence and Online Ordering
Many old restaurant owners hate internet. Big mistake! Online orders are 40% of my business now. Here’s shocking fact: customers order 25% more food when ordering online versus in restaurant. Why? No shame about ordering too much! Also, they sit at home, feel hungry looking at food pictures.
What I do for online business:
– Make simple website with clear menu (cost me $2,000 but makes $5,000 extra per month)
– Put many food pictures (I pay professional photographer $500 every 3 months)
– Use 3 delivery apps but raise prices 25% on apps to cover fees
– Send email with special offers every week to customer list (4,000 people now!)
– Post on Instagram 3 times per day
– Reply to all online reviews within 24 hours
Here’s interesting thing about delivery apps: They take 30% commission, but delivery customers spend 45% more per order than dine-in customers. My average dine-in order is $42. Average delivery order is $61! Also, delivery customers order more expensive dishes. Why? Because rich people use delivery apps more!
True story: Last year, I started sending email about secret menu items to my customer list. These items are normal menu items with fancy names and special sauce. Example: Regular orange chicken becomes “Chef’s Secret Orange Blossom Chicken” – add one spoon of honey and some orange zest. Cost: $0.20 extra. Price difference: $6 more! Sales went up $3,000 per week just from these emails!
5. Customer Experience Enhancement
Here’s another controversial opinion: customer is NOT always right. But customer must always feel respected. Big difference! I train my staff to be respectful but not let customers abuse them. Last month, one customer demanded free meal because food took 25 minutes during Friday rush hour. My manager politely explained normal wait time is 30-35 minutes during rush hour, offered free appetizer for next visit. Customer became regular!
My rules for customer service:
– Greet within 30 seconds (even if just saying “Welcome! Please wait one moment”)
– Take order within 5 minutes
– Bring drinks within 3 minutes
– Check on table 2 times during meal
– Solve problems immediately
– Never argue with customer
– Always offer solution that costs less than argument
– Give managers power to solve problems without owner
Special thing we do: Take pictures of customers who celebrate birthday (with permission). Put pictures on “Celebration Wall.” People love seeing their picture in restaurant! Cost: almost nothing. Benefit: They bring friends to show picture!
Real numbers: After implementing these rules, my customer satisfaction score went from 4.2 to 4.8 on Google reviews. More importantly, average bill went up 15% because happy customers order more food! Also, happy customers tip better, which means better servers want work here.
6. Marketing and Promotion Strategies
Most restaurants waste money on marketing. They sponsor local events, print flyers, buy newspaper ads. All waste! Here’s what really works based on tracking customer numbers:
6.1 Google Business Profile (free but makes 30% of my new customers)
– Post new pictures every week
– Respond to all reviews
– Update menu prices immediately
– Add posts about specials
6.2 Instagram food pictures (costs nothing but time)
– Post 3 times daily
– Show food being cooked
– Show happy customers (with permission)
– Share staff stories
6.3 Happy hour with good deals (makes less profit but brings new customers)
– Monday-Thursday 3pm-6pm
– Keep it simple – 5 food items, 5 drinks
– Change items every 3 months
– Always include one expensive item at big discount
6.4 Local food bloggers (I give them free food, they post about restaurant)
– Build relationships slowly
– Invite them during slow times
– Let them order what they want
– Never ask for good review, just honest review
Controversial tip: I never give discounts more than 20%. Bigger discounts attract wrong customers who never come back without discount. Instead, I add extra items. Example: “Buy any main dish, get free spring rolls.” My food cost for spring rolls is $0.80, but menu price is $6.99. Customer feels they get good deal!
More controversial opinion: Groupon is restaurant killer! Yes, brings many customers, but they never come back. They only want discounts. Instead, we do “First Visit Special” – new customers get 15% off first visit if they join email list. Now we can market to them forever!
7. Operational Efficiency
This part is boring but makes most money. Small changes in operation save big money. Here’s what I changed in last 2 years:
– Got inventory management software ($200/month but saves $2,000/month in waste)
– Changed schedule to match busy times (saved 20% on labor costs)
– Reduced menu size (reduced inventory by 40%)
– Trained staff to sell expensive dishes (average bill up 25%)
– Installed kitchen display system ($300/month but speeds up service 30%)
– Put cameras in kitchen and dining room ($2,000 one-time cost, saved $1,000/month in waste and theft)
Real example about waste: We were throwing away 30% of vegetables every week. Started cutting vegetables twice per day instead of once. Now waste only 8%. Savings: $1,200 per month per restaurant!
Here’s controversial thing about staff scheduling: I cut all shifts to 6 hours maximum. Everyone complained at first. But now servers make same money in 6 hours as they made in 8 hours before. Why? Because they have more energy, serve better, get better tips. Also, I save money on breaks and meal costs!
Kitchen efficiency secrets:
– Prep 80% of ingredients in morning
– Cook popular sauces in big batch
– Use same ingredients in multiple dishes
– Place all cooking stations in circular pattern
– Put newest cook on easiest station
– Cross-train everyone to do 2 stations
Real story: Had one cook who always worked wok station. He got sick one day, nobody else could cook on wok. Lost $3,000 that day! Now everyone trains on every station one day per week.
8. Alternative Revenue Streams
Restaurant owners who only sell food in restaurant are leaving money on table. Here’s all my extra income streams:
8.1 Cooking classes on Sunday mornings
– Charge $99 per person
– Maximum 20 people
– Include lunch and recipe book
– Make $2,000 profit per class
– Students become regular customers!
8.2 Sell sauce bottles
– Costs $2 to make
– Sell for $8.99
– Sell 200 bottles per week
– $1,400 weekly profit
– Customers advertise for us when they show friends
8.3 Catering for offices
– 40% profit margin
– Minimum order $300
– Only offer 10 most popular dishes
– Include free delivery over $500
– Average order is $800
8.4 Meal prep service
– Cook during slow times
– Use same ingredients as restaurant
– Sell weekly packages
– $150 per week per customer
– Have 50 regular customers now
8.5 Restaurant space rental
– Rent restaurant for morning events
– Local business meetings
– Birthday parties before opening
– Cooking competitions
– Make $500-1000 per event
Funny story: Started selling our special sauce because customers kept asking. Now bigger restaurants want to buy sauce wholesale! Starting sauce factory next year!
9. Technology Integration
Many restaurant owners think technology is expensive. Yes, good systems cost money. But they make more money than they cost. Here’s what I use and real numbers:
9.1 Foodship POS system
– Costs: $60/month per restaurant
– Benefits:
* Saves 20 hours labor per week
* Reduces order mistakes by 80%
* Tracks everything automatically
* Shows which servers sell most
9.2 Kitchen Display System
– Costs: $30/month
– Benefits:
* Food comes out 8 minutes faster
* No lost tickets
* Shows cooking times for each dish
* Alerts when orders take too long
* Reduced food waste 25%
9.3 Inventory Management System
– Costs: $20/month
– Benefits:
* Automatic ordering
* Tracks waste
* Shows food cost per dish
* Predicts busy days
* Saved $2,000/month in waste
9.4 Customer Database System
– Costs: $10/month
– Benefits:
* Tracks customer visits
* Sends birthday offers
* Manages loyalty program
* Email marketing
* Shows customer preferences
Controversial opinion: Some old restaurant owners say technology makes service less personal. Wrong! Technology does boring work so staff can spend more time with customers!
Real example: Before kitchen display system, servers walked to kitchen 50 times per shift to check on food. Now they spend this time talking to customers. Result: 30% higher tips!
10. Staff Training and Management
Here’s controversial truth: most restaurant staff training is useless. Why? Because they teach wrong things. Don’t teach staff about food history or wine regions. Teach them how to make more money! When staff makes more money, restaurant makes more money.
My training program:
1. Sales Training (Most Important!)
– How to recommend expensive dishes
– How to sell drinks first (people order more food after one drink)
– When to suggest extras
– How to describe specials that make people hungry
– Best times to suggest dessert
Real example: Taught servers to say “Would you like to start with our fresh spring rolls?” instead of “Would you like any appetizers?” Spring roll sales went up 85%!
2. Speed Training
– How to handle multiple tables
– When to combine kitchen trips
– Best order to do tasks
– How to help other servers
– What to do during free time
3. Customer Service
– How to read customer mood
– What to do when food is slow
– How to handle complaints
– When to call manager
– How to turn angry customers into happy ones
4. Team Work
– Morning prep duties
– Side work system
– How to help during rush
– Kitchen communication
– Clean as you go rules
Money talk: My servers average $200 more in sales per shift after training. Restaurant makes $40 more profit per server per shift. With 10 servers working each day, that’s $400 extra profit daily just from better training!
Controversial tip: I don’t hire experienced servers anymore. Why? They have bad habits from other restaurants. I prefer hire nice people with no experience. Easier to train!
11. Financial Management
Most restaurant owners don’t know real numbers of their business. They think revenue is profit. Big mistake! Here’s what you must know:
Daily Numbers:
– Food cost percentage (should be 28-32%)
– Labor cost percentage (should be 25-30%)
– Average check size
– Number of customers
– Sales per hour
– Waste log
– Comped food amount
Monthly Numbers:
– Rent percentage (should not be more than 10%)
– Utility costs
– Marketing expenses
– Profit margin per dish
– Employee turnover cost
– Maintenance costs
– Credit card fees
Real example: Found out my desserts had 82% profit margin. Trained staff to sell more desserts. Dessert sales went up from 20% of customers to 45% of customers. Extra profit: $1,800 per week!
Shocking discovery: Did analysis of peak hours. Found out Friday 7-8pm made 40% of entire Friday profit! Changed staffing, added tables, now make 65% more money in that hour.
Money-saving secrets:
– Buy vegetables from local farmers (30% cheaper)
– Change menu when ingredient prices go up
– Use same ingredients in multiple dishes
– Buy equipment from closed restaurants
– Negotiate with vendors every 3 months
– Pay bills early for discount
12. Creating Your Action Plan
Don’t try everything at once. Here’s exactly what to do each month:
Month 1: Check All Numbers
– Get POS reports
– Calculate food costs
– Track labor hours
– Monitor peak times
– Review all expenses
– Check competitor prices
Month 2: Fix Menu and Prices
– Remove low-profit items
– Adjust portion sizes
– Update prices
– Take new photos
– Train staff on new menu
– Create specials
Month 3: Train Staff
– Start sales training
– Improve service speed
– Teach upselling
– Set sales goals
– Start contests
– Track performance
Month 4: Digital Presence
– Update website
– Start social media
– Set up online ordering system
– Begin email list
– Take new photos
– Respond to reviews
Month 5: New Revenue
– Start catering
– Make retail products
– Plan events
– Create packages
– Build partnerships
– Test new ideas
Real success story: Restaurant owner followed this plan. Results after 6 months:
– Sales up 45%
– Profits up 120%
– Labor costs down 15%
– Food waste down 40%
– Customer complaints down 60%
– Staff turnover down 80%
13. Case Studies
Let me share what happened in my worst restaurant:
2023 January:
– Losing $8,000 per month
– 82 menu items
– 30% food waste
– Bad reviews
– High staff turnover
– Empty during weekdays
Changes Made:
– Cut menu to 25 items
– Trained staff properly
– Started online ordering
– Fixed prices and portions
– Added lunch specials
– Started marketing
2023 June:
– Making $12,000 profit
– Food waste 8%
– Better reviews
– Staff staying longer
– Busy every day
– Online orders 30% of sales
2024 December:
– Making $45,000 profit
– Almost no waste
– 4.8 star rating
– Same staff for 1 year
– Lines during lunch
– Online orders 45% of sales
14. Frequently Asked Questions
Common questions I get from new restaurant owners:
Q: How much money needed to start restaurant?
A: At least $300,000 in big city. Half that in small city. Here’s basic costs:
– Kitchen equipment: $120,000
– Dining room: $50,000
– First 3 months rent: $30,000
– Licenses and permits: $20,000
– Opening inventory: $25,000
– Staff training: $15,000
– Marketing: $20,000
– Emergency money: $40,000
Q: How long until restaurant makes profit?
A: Good restaurant should make profit in 6 months. If not, something wrong. My timeline:
– Month 1-2: Lose money (normal)
– Month 3-4: Break even
– Month 5-6: Small profit
– After 6 months: Should make real profit
– After 1 year: Should make 15-20% profit on sales
Q: What’s most important thing for success?
A: Numbers! Know your costs, prices, profits. Check every day. Many owners only look at bank account. Big mistake! Need to know:
– Food cost per dish
– Labor cost per hour
– Profit per customer
– Busy and slow times
– What sells most
– What makes most profit
Q: How to compete with big chain restaurants?
A: Don’t compete on price! Compete on:
– Better service
– Fresh food
– Special dishes
– Personal touch
– Local connections
– Fast changes when needed
Q: How to find good staff?
A: My secret: Hire for attitude, train for skill. Look for:
– People who smile naturally
– Good energy
– Team players
– Want to learn
– Live close to restaurant
– Need full-time job
Q: Should I start with a food truck or full restaurant?
A: Depends on your budget and goals. Food truck startup costs are usually $50,000-150,000, much lower than a full restaurant’s $300,000+. Many successful owners start with food trucks to test concepts before expanding to restaurants.
15. Additional Resources
Want to learn more? Here’s what helped me:
15.1. Industry Organizations
– Restaurant Owner Association (join local chapter)
– State Restaurant Association
– Small Business Association
– Local Chamber of Commerce
15.2. Learning Resources
– Restaurant Business Magazine
– Modern Restaurant Management website
– Food cost calculator apps
– Menu engineering software
– Local health department classes
15.3. Technology Tools
– Restaurant POS system (Foodship)
– Inventory management (Foodship)
– Staff scheduling (Foodship)
– Online ordering platforms
– Customer feedback systems
15.4. People to Know
– Other restaurant owners (make friends!)
– Local food suppliers
– Health inspectors
– Business accountant
– Restaurant equipment repair people
15.5 Important Numbers to Save
– Emergency plumber
– Refrigeration repair
– Pest control
– Food suppliers
– Equipment repair
– Good delivery drivers
16. Final Thoughts
Remember: restaurant business always changing. What worked yesterday might not work tomorrow. But these things always stay same:
- Good food
- Good service
- Know your numbers
- Train your staff
- Keep learning
- Work smart, not just hard
My last controversial opinion: Most restaurants fail not because of bad food or service. They fail because owners don’t treat restaurant like serious business. Restaurant is not cooking hobby – it is money-making business!
Good luck! If I can succeed with 5 restaurants after losing money in beginning, you can too! Start small, learn every day, make changes fast, and never stop checking numbers!
Remember my favorite saying: “Best restaurant owner is not best cook – best restaurant owner is best businessperson who loves food!”
—–
About Author:
John Chen owns 5 successful restaurants in California. Started with one failed Chinese restaurant in 2010. Now his restaurant group serves over 10,000 customers weekly and makes over $400,000 monthly profit. He teaches new restaurant owners and speaks at restaurant business conferences.
The end of guide includes:
- Practical FAQ with real numbers
- Comprehensive resource list
- Important industry connections
- Emergency contacts list
- Final motivational message
- Author’s credentials
