Making money with a restaurant that is just starting

Making money is the goal of every business, and a restaurant is a good business idea that usually generates good revenue.

A new restaurant usually faces the difficulties of any new business: it has to get known and convince potential customers to visit through advertising. Over time, revenue will settle at a fairly attractive level if you do things right.

Starting to make money from day one with a restaurant is a goal that is usually very hard to meet, so you should know in advance that the first days will not be easy in the life of your restaurant.

Despite that written reality, there is a proven way to generate profit in the short term, which we have tested in two of our restaurants and it has worked perfectly for us.

This is not about incredible profits. It is really about enough revenue to operate the business in its first months without going into the red, that is, without running a loss (something quite common at the start of any business). With that, you can run the restaurant month by month by reinvesting the same money you made the previous month, which reduces the need for cash injections, sometimes to the point of zero. In other words, you will not need to pull more money out of your pocket (or out of the loan you took to open the restaurant) for the business to work; the business will be generating the money it needs to survive the next month.

Strategy details

We opened two restaurants with no history at all, that is, completely new. The strategy to bring in customers was to offer daily promotions announced in different media, including newspapers and social media. The peculiarity of the promotions was that they were valid for one day only, meaning they could only be redeemed the same day.

Incredibly, the strategy worked. It is as if social media users are open and willing to visit, the same day, a place that offers visually rich dishes that open your appetite.

Keys to the strategy:

• – The ads included a large photo of our main dishes on promotion.
• – They included a photo of people enjoying themselves in a restaurant (eating and laughing among friends). Incredibly, they were not even real customers but a stock photo, although chosen intelligently.
• – The offer was truly attractive: we are talking about a 40% to 45% discount.
• – The ad was displayed on social media from 8 a.m. (the time when the average person starts work at the office, sitting in front of a computer).
• – The advertising was shown exclusively to people located near the restaurants (location-based targeting).

Honestly, at first I did not believe it would work, but I was wrong. The strategy worked, and it worked very well.

Naturally, we were not making much money, since we had to compromise profit. In exchange for that move, which allowed us to lower prices and activate the promotions, we brought in revenue that exceeded the operating expenses of the businesses by about $300.

But from that moment on we did not spend another dollar out of our pocket. In other words, the business paid for its own birth and development, something that had not happened to us before. We kept the strategy for at least a year, until we reached a market share in that type of food and had built a good group of regular customers.

This strategy is one I will no doubt apply again when I venture to open another restaurant, and that is why I recommend it to anyone who is just starting out.

Update: many people ask me in private: what money did you pay for the advertising with? The answer is in this article, where we talk about money and the early days: How do you open a restaurant?