marketing budget plan for restaurant
by Laura-Andreea Voicu

Are you worried about the increasing number of competing restaurants throughout the town? Well, you may not be alone. The restaurant industry is expected to hit $898 billion in 2022. The growing competition sees small restaurant owners fighting to stand out with their marketing.

While there is no shortage of marketing activities you can undertake as a restaurant owner, planning a budget is the first step.

Preparing a marketing budget plan for restaurant success can help prioritize your spending by better understanding your goals. Budgeting is essential to the equation if you want to succeed.

But, before you finalize the budget for marketing, you must know how much you spend on other aspects of your business.

  • Food Costs: Money spent each month on food and beverage inventory
  • Labor Costs: Paying your employees — chefs, stewards, servers, etc.
  • Overhead Expenses: Consider the cost of running the show. This includes expenses for cleaning services, property taxes, rents, air conditioning or heating, etc.
  • Promotional Merchandise: Giving out free goodies and toys similar to Mcdonald’s
  • Entertainment: Budgeting to entertain guests — karaoke, live music, stand-up gigs, etc.
  • Miscellaneous Spending: Anything additional that doesn’t fall under one of these headings goes here. This includes hosting a Christmas party for your team, unforeseen repairs, etc.

This way, you can determine your restaurant’s cash flow and prepare the marketing budget accordingly.

4 Steps to Setting up a Marketing Budget Plan for Restaurant Success

Step 1: Launch a Restaurant Website

Building an intuitive website is the first step toward digital marketing for your restaurant. Remember, creating a restaurant website is only the beginning of the expenses. You must allocate finances for its promotion — search engine optimization (SEO), regular updates, paid ads, etc.

The upfront cost of running your restaurant website typically includes the payment to host your website, domain name registration, designers, and content team. A website with images and a menu is not enough. Generating traffic requires adding depth.

You can also make a blog where you put out some of your best recipes, cooking tips and tricks and cover content on the cuisines you offer. This will invite foodies to visit your restaurant website for information that adds value to their lives.

Read more: 20 Restaurant Blog Ideas That Will Bring More People to Your Website

Because your website should contain all your business’s vital information, it makes sense to use it to generate traffic from the biggest source — Google. Therefore, leverage SEO so people can easily find your restaurant online.

For this, you might want to consider a separate SEO budget. First, create a Google Business Profile and link your website. This gives customers basic information about your restaurant — opening hours, menus, contact information, location, reviews, and other details.

Read more: SEO for Restaurants Or How to Sell More Food Online

You may also utilize paid ads to advertise your menu. As part of the promotion, you might direct traffic from social media and search engines to a landing page with menu information and an ordering link.

Typically, you would allocate a budget of $3,000 to $10,000 (on average) to create a beautiful restaurant website. But what if we told you you could spend as much as you would on a large pizza a month to get your very own sales and SEO-optimized restaurant website?

All you need to do is use our restaurant website builder. It comes with built-in online ordering and access to various other marketing tools like promotions and email campaigns that will help you grow your business.

Don’t spend all your marketing budget on a restaurant website Get a sales-optimized website for $9/month

Step 2: Set your restaurant marketing goals and objectives

There should be a cause, a greater purpose attached to spending money promoting your restaurant.

Not planning your marketing activities based on your business goals and objectives can prove counterproductive. Instead, try identifying your short-term and long-term restaurant goals and accordingly attach a budget to them.

For starters, here’s how to set your restaurant goals.

Your restaurant type (multi-cuisine, pan-Asian, fast food, etc.) and the number of years since you’ve been in the business will influence your marketing goals. Broadly, your key areas to aim for marketing can include:

  • Better brand awareness, reach, and visibility
  • Increasing repeat visits
  • Increasing online orders
  • Building customer loyalty
  • Increasing average order size

Here, your budget can involve spending on audience analysis, typically by hiring a marketing agency to conduct market research. If you have the budget, you can spend upwards of $10,000 depending on your audience profiles, expected reach, reporting, etc.

You are not only paying them to collect data. They also interpret it and ultimately provide their advice, insights, and assistance tailored to your restaurant business needs.

With this research, you will know:

  • Where your targeted audience is hanging out digitally — social media platforms, WhatsApp/Telegram, community forums, etc.
  • The ideal channels for your restaurant to target to ensure maximum reach and engagement.
  • Which platforms offer better ROI
  • What channels you should target for higher conversions

After the audience analysis and identifying the proper channels for your marketing campaign, decide how much you should spend. There’s a formula for that.

Step 3: Follow this budget formula

A general rule suggests that marketing budgets should account for 3%-6% of total revenue. Some restaurants would stretch this expense up to 10% of their sales, but consider 3%-6% as your starting point.

How to calculate the budget you need

ABC Restaurant is new in the business and had gross revenue of $80,000 in 2021.
They decided to assign 8% of the revenue to their marketing for 2022.
8% of $80,000 is $6,400

This means ABC restaurant should expect marketing costs of around $500 – $550 a month.

Use the 70/20/10 Method

Strike the perfect balance between your tried-and-tested restaurant marketing strategies and blend them with the new ones using the 70/20/10 model.

Allocate 70% of your budget to trusted, conventional marketing methods. This includes newspaper ads, discount offers, bulk messages to existing customers about new dishes, etc. This goes into reinforcing your restaurant’s brand awareness.

Then, spend 10% of your marketing budget on new marketing initiatives. This includes leveraging influencers on TikTok and Instagram, retargeting on social media platforms, Google Ads campaigns, etc.

It will be unfair to expect immediate returns on investment from this 10% spend. But, use this exercise to identify what works and what doesn’t to help you find ideal marketing activities for the future.

The remaining 20% of your budget goes into implementing the effective marketing campaigns that you tried with the 10% of your budget in the past.

Your restaurant can maintain a competitive advantage by following the 70/20/10 strategy as it blends several proven restaurant marketing strategies to keep sales hot all year long.

You can think of digital advertisements for that 30% of the new media budget.

Step 4: Invest in digital paid advertisements

Opting for conventional advertising like billboards, magazines, and newspaper ads is still powerful for your restaurant business. Primarily, they help raise awareness and increase footfall.

But, they’re too expensive for a small business, and you cannot ignore the power of digital media like social media, email marketing, and digital ads. A campaign on practically any social media network may be effective; however, as a restaurant, you can start focusing on these four:

  • Instagram
  • Facebook
  • Email marketing
  • Hyperlocal ads on Google

Instagram

Instagram is your best bet if you are looking to promote your restaurant’s ambiance, cuisine, and customer experience.

Leverage the visual power of Instagram to push pictures, videos, and customer experience as a part of testimonials. Show customers what they can expect when they visit your restaurant by trying some of these Instagram marketing ideas for restaurants.

Once you set up your Instagram page, think of how to make it more engaging:

  • Promote your Instagram page by running an ad campaign targeting a particular vicinity and demographics in your city
  • Tie up with micro-influencers on Instagram at the local level, have them over to taste your meal, and review your restaurant
  • Promote stories and posts for discounts, special menus, live music, etc.

Per our previous example, if you allocate $500-$550 per month for restaurant marketing, try spending $100-$150 on Instagram ads.

Facebook

Leverage the wide reach of Facebook, which has over 2 billion monthly active members. Start with creating a business page for your restaurant on Facebook. Once done, upload high-quality photos of your cuisine, restaurant, and recipes to encourage your followers to visit.

On Facebook, you can add a ‘Start Order’ button that enables your page’s visitors to place an online order at your restaurant. Here’s how you can add an ordering link to your Facebook page.

If you are operating in a highly competitive market, think of leveraging Facebook advertisements on a Cost-Per-Click basis.

Facebook helps promote your business from your own page. You can use its ad manager to reach a wide number of diners. In all, you can plan a budget for $100-$120 to acquire a decently big local audience and create a brand recall value.

Email marketing

A HubSpot report suggests the following powerful stats regarding multiple generations and how much they prefer receiving emails from businesses:

  • 74% of Baby Boomers
  • 72% of Gen X
  • 64% of Millennials
  • 60% of Gen Z

Chances are, your customers will become more loyal when they see your restaurant’s logo more often and get your event announcements, menu discounts, coupons, and so on. This makes them feel like they’re part of an exclusive community simply by signing up for your email list.

Your restaurant business can use personalization and segmentation for your email lists. It enables targeting your promotions to your subscribers, which drives campaign effectiveness.

Think of using your customer data for retargeting existing customers and sending them personalized emails.

Bring back existing customers and attract new ones with Autopilot Set your email campaigns and let them run in the background

For example, consider a segment of female customers between the age of 25-35 within a radius of 10 miles who frequently order salads and soups. They will be more inclined to know about your new healthy recipes and discounts. Promoting the “Healthy Combo” offer over an email can increase conversion.

Here, you need to allocate a budget for email spending, including email automation costs. Drive customer affinity by targeting emails to your frequent users based on the number of visits, spending amount, past food delivery records, birthday/anniversary records, etc.

Use your 10% of the budget for email experimentation and see how it adds value to your business.

Check out the video below to see how our Autopilot service can help you send automated email marketing campaigns without you having to lift a finger:

Google Ads

This is where having a website for your restaurant helps. You can run CPC (cost-per-click) ads on search engines to acquire new customers. The campaign cost largely varies depending on whether it is a Search or a Display ad.

A search ad will show your restaurant and nearby ones for users to choose from. A display ad will dominate the entire screen, getting all the attention of a user.

Therefore, the budget for each CPC ranges from $0.35 to around $8 per click for restaurants.

Display advertising may generate traffic at substantially cheaper cost-per-click (CPC) rates. It is common for small, local businesses to remarket their banner campaigns with CPCs under $1.00.

Consider price fluctuations when allocating the budget for Adwords, as you may pay a different price for each term in a search campaign. Some keywords will be more lucrative than others regarding their financial value. It is because two factors affect the cost of search campaigns’ CPC.

  1. Competition: Are you bidding on a highly competitive search term? This is defined by the number of other restaurants bidding on similar keywords.
  2. Relevance: Are your ads and your restaurant website relevant to searchers? For instance, you may be bidding on the term ‘Pasta near me,’ but your ad does not mention it, nor can the searcher find it on your website. Then, your ad will score low on relevance.

Over to you

In a nutshell, restaurant marketing expenditures should remain as diverse as your restaurant itself. If your restaurant competes with local, mid-sized restaurants, you are most likely battling in-house marketing efforts.

On the other hand, a chain of restaurants can afford to hire marketing specialists and spend several thousand dollars on marketing each month.

So as a small business, find your niche, double down on the proper marketing channels where your audience hangs out, and create a realistic marketing budget plan for restaurant success that is a bang for your buck.

Author bio:

Hazel Raoult is a freelance marketing writer and works with PRmention. She has 6+ years of experience in writing about business, entrepreneurship, marketing, and all things SaaS. Hazel loves to split her time between writing, editing, and hanging out with her family.

photo of GloriaFood blog writer Laura-Andreea Voicu
Laura-Andreea Voicu

Laura-Andreea Voicu is an experienced content writer with a knack for marketing and SEO. She delivers business-optimized content to help restaurants boost sales and grow their brand.