Starting, Owning and Marketing A Restaurant Blog|Starting and Owning a Restaurant - Construction, Planning, Marketing, Opening and Managing a New Restaurant

For those reading the blog for the first time, this has been an eight month process of opening a new restaurant. I have shared the pains, pleasures, trials and tribulations that all restaurateurs go through after deciding to become restaurant owners. My only advantage is that this is the fourth time I have done it.

This post installment is after about seven weeks of operating history and in response to the previous post below with respect to trends that can be discerned from the results so far. The reliability of making assumptions this early is questionable. However, nothing can be lost by addressing those potential trends now. Waiting is the new restaurateur’s way of doing nothing. It would be the easiest thing to do, particularly when, overall, we have met our expectations in the early stages. The goal is to put butts in seats all day every day!

Below is the trend we are addressing and the marketing plan adjustment;

• Lower Than Expected Early Breakfast Sales - We will create an “Early Riser” short group of specials for people dining between 6:30 AM to 8:30 AM. These items will be palced on the tables in a POS format each day and removed at 8:30 AM.
• Less Take Out Sales Than Expected - We will concentrate our personal visits to local offices that are more likely to order take out food than others. Examples include doctors’ offices, retail shops, banks and other medical facilities who have a difficult time getting away from their offices due to the demands of their customers. Each of these groups will be given take out menu’s and full laminated copy of both the breakfast and lunch menu’s in addition to the small take out reprints.
• Early Morning and Take Out Sales Program - We will develop a flyer (handout) or promotional device that promotes “call ahead” program for people on their way to work. Features will include no lines, no drive thru’s and value ideas for there morning coffee, juice or food. The promotional flyer and/or tool will be given to the huge weekend crowd and lunch guests.
• Targeted Sales Effort for All Market Segments - Not necessarily connected to any specific trend, we will target beauty shops, barbers, cleaners, hardware stores and similar non-competing entities that deal with the local general population that have high traffic. We will offer the owner/manager of the establishment a free breakfast or lunch if they allow us to put our takeout menu’s in their retail facility.
• General Media Advertising -We will find a different source for broad distribution of our message other than the two local publications we used in the first thirty days. Possibilities include direct mail, small postal bulk mail booklets or fliers. The content of the media ad will feature some of the programs developed above.

Marketing is not a knee jerk response to low sales used as an occasional tool. It is an ongoing part of operating a successful and growing restaurant. As usual, staff will be involved with the process by asking for their input and educating them on the plan.

All of these tools are spelled out and come from the book called The Restaurant Ebook, A Guide to Keeping Your Restaurant Off the Chopping Block.

Opening a new restaurant is never easy. If you are fortunate, as we have been, sales start strong as you settle into a an operations pattern. Your assumptions about the demographics, consumer habits and menu choices for your area of influence are either confirmed or confused.

The economy adds additional question marks about the long term mission of the operation. Being a new restaurant operation in a “normal” economy means some stable factors can be used to adjust your marketing efforts, menu, pricing and consumer demands. In a recession, you just learn as you go and keep a close watch on historical data from previous experiences, if you have any.

The new restaurant has seen a pleasant steady increase of sales from week to week, even though there is a plateau forming in certain day parts (10 AM to 1 PM). Here are issues we are watching as, perhaps, early warning signs of either incorrect assumptions about consumers in our demographic or ineffective planning to reach certain segments of the market:

• If there is any disappointment, it is in our take out sales. The numbers are flat and well below our projections.
• On the other hand, lunch sales have been exceptional.
• Early morning sales are less than expected which leads to these questions:
  • Have we over projected the early morning crowd?
  • Are we over priced in this segment?
  • Is our location traffic pattern hindering ease of ingress and egress?
  • Have we missed the mark for what the early riser wants?
• Why do sales patterns differ from our other location less than 5 miles away?

After just six weeks, is it too early to even worry about these questions? Some may say yes, but if not now, when do you start looking at trends that begin to develop? After it is too late to easily correct any mis-cues in your restaurant marketing plan? My response is an easy one - React now! It can’t hurt your business and can only help. Waiting is the inexperienced restaurant owner’s nemesis.

For those following our path, sales this week for our 70 seat breakfast and lunch operation will be about $16,000. Fortunate, pleasing, rewarding and pleasantly surprised are all terms that come to mind - satisfied doesn’t come to mind!

The actions and plan to address the issues raised above will be discussed in the next post.

With four weeks of operations, it is time to look at the numbers, product mix, efficiency and the pennies, nickels and dimes that account for profits in the breakfast and lunch business. Weekend sales were good and operations were smoother than previous peak periods. The minor procedural and time-saving line changes appear to help the kitchen keep ticket times in check.

This week will be a week of doing some work with the front of the house to eliminate areas where servers seem to bog down with customer service issues. Getting behind on coffee service, setting up properly for a big day and spending time looking for utensils cost valuable time away from customers and lower table turns.

As the new restaurant moves forward, another task is added to the job(s) management has to focus on - THE NUMBERS. In the first thirty days of most new restaurants, there is a concentration on food and customer service - at any cost. It is difficult to even determine food costs in the initial stages due to changes in preparation, extra caution about portions and the waste caused by training and trial and error in the kitchen. In the next thirty days of operation you begin to look at food costs, hitting your targets in your business plan and waste.

Our target is 27 to 28 percent of sales for cost of goods sold. That includes only food and beverages. Any retail items such as t-shirts, point of sale items and miscellaneous sales may have a different target that is generally higher.

Another target of scrutiny will be employee hours. While training is an ongoing function, the rush to cross train in the initial stages leads to overtime and schedules that are padded to make sure there is sufficient staff to handle the sales and pamper customers with constant attention. As business levels fall into a pattern, you can adjust employee schedules to match needs as a pattern develops.

For much more detail on cost control, waste and money saving ideas visit On a Wait. This site offers tips on a wide range of management issues that can help new restaurants and seasoned operations become more efficient.

For those who have been following our sales progress, our numbers for the past week have been acceptable, but we see somewhat of a plateau. That means that we have had two successive weeks of about the same revenue ($13,000). It is time to remodel our marketing plan, now that the “newness” factor has run it’s course and there are still segments of the demographic that haven’t heard about us yet. That calls for in-depth targeting. More on this in future posts.

Sunday, February 2, 2009 brought us another record day with revenues exceeding $3000. This week we have focused on:

• More efficiency in the kitchen. We have added shelving in critical locations, changed duties for different positions and moved ready to cook items in easier locations. The wole goal is to reduce time to produce various menu items, even if it is just a few seconds.
• Eliminated crossover paths for any reason on the line.
• Spent a considerable aount of time working with servers individually and as a group to reduce entry errors and more consistency in adding and removing components to menu items.
• Will have a soup and sandwich daily special that will reduce kitchen time to produce orders.

So far the changes have improved ticket times and less confusion in the preparation. All of these procedural matters are tested on weekdays when volume and staff is less. The weekend will tell be the real test of the changes. Getting tables in and out is still the goal.

Opening a new restaurant is one way to become creative with policies and procedures. Occasionally you stumble upon ideas that may help the other restaurants to improve their service and production. One such change will be the carification of modifiers that allow a server to furhter explain the customer’s wish on a ticket. When the order is sent to the ktchen, the extra detail eliminates mistakes and improves the delivery system to the guest.

It’s 5 AM on February first. A Sunday - Super Bowl Sunday, in fact. Yesterday we set a new restaurant sales record for a single day since opening of almost $2800. That’s great news, but getting a handle on how our sales each day keep growing is just as important for continued growth.

Based on initial customer conversations, the vast majority of our guests are coming for the first time as the result of referrals to the restaurant. Someone visits us and tells their neighbors, family and friends. You can’t buy advertising, run promotions or offer coupons that would be this productive.

Studies have shown that people react sooner and more often to a word of mouth recommendation of a restaurant than any other single motivating factor. Customers take the assurances of someone they know before relying on the hype in an ad, coupon or promotional device, no matter how attractive.

The fact that we are getting personal recommendations tells me several things:

• Our message of quality food is getting out. Our prices are 20% higher than our competitors, but we sell our ingredients and quality to each guest.
• We must be meeting and/or exceeding what the customer expected when they walked in the door.
• Our consistency must be better than I expected in these early stages (three weeks).
• Our location is as good as we expected with plenty of parking, road exposure and good ingress and egress.

While pleased with the initial sales and response, we still have a lot of work to do. Our break-even number is about $1500 per day and we need $10,500 per week (without owner compensation). This will be our second straight week of hitting those numbers, but other costs are involved as we buy more smallwares, small equipment and other items to support the growth. Break-even is great, but profits are why we are ultimately in business.

On the very positive side, we are meeting our sales goals. On the other hand, we clearly need to work on staff training, kitchen routines and turning tables. On the proverbial ten scale, we are an eight and very pleased.