Restaurant Marketing Budget: Tips, Rules & Techniques

restaurant marketing budget

The amount of money that a restaurant should allocate for marketing will vary depending on a number of factors, such as the size of the restaurant, the target audience, and the marketing goals. Plus, what you as the restaurant owner is willing allocate without been overly concerned, because at the end of the day, you have to be comfortable with your budget and most of all, is a budget you can stick to for a while to be successful

However, as a general rule of thumb, restaurants typically allocate 2-5% of their revenue towards marketing. For example, if a restaurant generates $500,000 in annual revenue, it may allocate $10,000 to $25,000 for marketing purposes.

It’s important to note that while having a marketing budget is important, it’s equally important to use that budget wisely. Consider utilizing cost-effective marketing strategies such as social media, email marketing, and local advertising. Additionally, focus on targeting your marketing efforts towards your ideal customer base, and track the effectiveness of your marketing campaigns to ensure that you are getting a good return on investment.

Restaurant Marketing Budget: Capital Expenditure or Operating Expense?

Restaurant marketing budget is typically considered an operating expense rather than a capital expenditure. Operating expenses are those costs that are incurred in the day-to-day operations of the business, such as rent, salaries, utilities, and marketing expenses. Capital expenditures, on the other hand, are expenditures for the purchase of assets that will be used in the business over a long period of time, such as equipment, vehicles, or real estate.

While marketing can be seen as an investment in the long-term success of the restaurant, it is typically considered an operating expense because it is a recurring expense that is necessary to maintain the restaurant’s customer base and revenue stream. Operating expenses are deducted from revenue to calculate the restaurant’s net income, whereas capital expenditures are typically depreciated over time.

It’s important to note that there may be some exceptions to this general rule, depending on the specific circumstances of the restaurant and the marketing expense in question. For example, if a restaurant invests in a major rebranding campaign that involves significant capital expenditures, such as a new logo and signage, these expenses may be classified as capital expenditures rather than operating expenses.

Low-cost Restaurant Marketing Ideas

Marketing can be a significant expense for restaurants, but there are many low-cost marketing ideas that can help to promote your restaurant and reach new customers. Here are some low-cost restaurant marketing ideas:

  1. Social Media Marketing: Use social media platforms like Facebook, Instagram, and Twitter to engage with customers, post pictures of your food and menu items, and offer promotions.
  1. Email Marketing: Build an email list and send regular newsletters to your customers. Include information about new menu items, specials, events, and promotions.
  1. Local Partnerships: Build relationships with other local businesses and organizations. Offer discounts to their employees or customers in exchange for promotion.
  1. Loyalty Programs: Implement a loyalty program to encourage repeat business. Offer discounts or free items to customers who visit your restaurant frequently.
  1. Online Reviews: Encourage customers to leave reviews on platforms like Yelp and Google. Positive reviews can help attract new customers.
  1. Special Offers: Offer discounts or specials during slow periods to attract customers. For example, offer a discounted lunch menu on weekdays.
  1. Community Events: Participate in community events like fairs and festivals. This can help to raise awareness of your restaurant and attract new customers.
  1. Referral Program: Offer incentives to customers who refer friends and family to your restaurant. This can help to generate new business without spending money on advertising.
  1. Charity Events: Host charity events and donate a portion of the proceeds to a local organization. This can help to build goodwill and attract new customers who support the cause.
  1. Food Bloggers: Reach out to local food bloggers and offer them a free meal in exchange for a review on their blog or social media platforms.
  1. Search Engine Optimization (SEO): This is one of the most overlooked marketing ideas that most restaurant owners even bother to try out. SEO involves posting relevant content on your website, which you can simply add a blog on your website, and you can use a WordPress blog which comes with tons of SEO-friendly plugins. Plus, you can reach out to your partners to link to your website, these links help with ranking on Google.

These are just a few low-cost restaurant marketing ideas that can help to promote your business and attract new customers. Be creative and experiment to see what works best for your restaurant.

Determine the Right Restaurant Marketing Budget Through Your POS

Your restaurant POS (Point of Sale) system can be a valuable tool for determining the right restaurant marketing budget. Here’s how:

  1. Analyze Sales Data: Your POS system can provide detailed reports on your restaurant’s sales, including which menu items are most popular, when sales are highest, and which days of the week are busiest. Use this data to identify trends and target your marketing efforts accordingly. For example, if sales are slow on weekdays, consider offering weekday specials to attract more customers.
  1. Track Marketing Campaigns: Use your POS system to track the effectiveness of your marketing campaigns. For example, if you run a promotion for a new menu item, track how many customers order that item during the promotion period. This can help you determine the ROI (Return on Investment) of your marketing efforts and adjust your budget accordingly.
  1. Monitor Customer Feedback: Your POS system can also provide insights into customer feedback, such as which menu items receive the most positive reviews and which items receive the most complaints. Use this information to make menu adjustments and target your marketing efforts towards your most popular menu items.
  1. Plan Ahead: Use your POS system’s sales data to forecast future revenue and plan your marketing budget accordingly. For example, if you anticipate a slow season, you may want to allocate more of your budget towards marketing efforts to help boost sales.

In summary, your POS system can provide valuable insights into your restaurant’s sales and customer feedback, which can help you make informed decisions about your marketing budget. By using your POS system to track sales data, monitor marketing campaigns, and plan ahead, you can ensure that your marketing budget is being used effectively to drive business growth.

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