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

In my previous post about consultant’s absurdly suggesting that all restaurants should invest their time and effort into mobile marketing, there is one important aspect of mobile marketing that some comments point out.

While my issue is the effective use of time and resources for existing technology, the one type of restaurant that may benefit is the high volume take out restaurant. There are mobile applications that can send quick orders directly to you. Someone in a car, at work or home can order food using their cell phone device. Restaurants such as pizza shops, deli’s and sandwich shops that have a high volume to go trade may find mobile technology a worthwhile investment.

Few of us who own restaurants have time to invest in future possibilities. Pioneering a new market for mobile technology is not our goal. Consumers drive technology and restaurateurs should have a handle on when the customers are ready for that next great step in the digital world.

I appreciate the input from the people who commented on the previous post.

While doing some research, I stumbled across the following paragraph from a restaurant marketing site:

Say you’re a restaurant.  People with these devices can now be driving home from work and open an app that shows local restaurants…choose from a list…. get ratings and reviews… click the link to your site… look at the menu and photos….see that your restaurant is what they’re looking for and tap to make a reservation… all in mere moments from their phone.

Amazing times we’re in.  Make sure your site is ready.

Now the big news in marketing for many businesses has been the use of cell phones that now have the same applications as desktop computers. The restaurant industry has a long way to go before mobile marketing should be a big part any one’s restaurant marketing plan.

Yes, the chains will rush to find ways to make mobile marketing a part of their toolbag of tricks. Most of the larger companies have an IT staff that has nothing else to do but try to find ways to create small minute markets. For the vast majority of restaurants, mobile marketing is way down the line in order of marketing importance. Why? Primarily because the customer doesn’t choose a restaurant by clicking an app on a cell phone. Some, although relatively few, do use the Internet. By far, most restaurants get the majority of their new business from personal referrals through word of mouth.

Certainly people use their computers and cell phones to make reservations and some order food to go. That is a growing trend, but not mainstream by any means. If you want a very easy way to confirm my statement, but far too simple for consultants and marketing gurus, just ask your guests as they come in for the first time. Keep your own stats. This not only opens a dialog with your customers, but shows you care about your business.

So if you have other ways to allocate marketing resources, use them. Mobile restaurant marketing isn’t taking over the world as the “experts” want us to believe in the restaurant industry. Our business is a little more personal than ordering a tie for your uncle or finding the closest gas station or WalMart. Spend your time on things that keep the guest engaged, impressed and rewarded. Being bedazzled with technology will never bring them back in your door.

New or old, restaurants generate huge amounts of trash and garbage. There are receptacles in the kitchen, dining areas and usually outside the doors. Each of the different cans usually have plastic liner bags that cover the inside areas. These thin layers hide each restaurant area’s waste that are easily distinguished if opened.

While I cal it “Dumpster Diving”, the issue is really about cutting restaurant costs. There is no better method than seeing what is thrown away. Over the years here is what I have found while performing this miserable task resulting in a shower and subsequent savings:

·         Customer waste that lead to changes of uneaten side dishes and entrees that were half eaten.

·         How about a half pan of mashed potatoes that cooks threw out from the previous evening? We could have made many things from them. Or that half of a red onion the prep guys didn’t need.

·         The celery tops, onion skins, parsley stems, green pepper centers and tomato ends would make an awesome vegetable stock.

·         While you are in the trash digging around, you might as well pick out those cocktail forks you keep replacing, the ramekins and butter knives too.

·         Seafood restaurants need those shrimp shells, fish bones and lobster heads for a soup base.

·         Oh yes, then there is that quart of tuna salad that someone let spoil.

·         What about those half dozen empty Corona bottles in the bottom of the kitchen prep bag of trash? Was someone pilfering beer and, worse yet, drinking while working?

There is no end to discoveries and assumptions that can be made. How well is your kitchen being managed? Are there far too many broken glasses, plates and smallwares? Are you serving far too much side sauces, extra sour cream and salad dressings? Is your bread coming back in it’s original unused condition that indicates customer disatisfaction or over use by the servers?

Now if I can find the rubber gloves, dishwasher’s apron and old tennis shoes ready to be thrown away, I’ll see how well we are running this retaurant and keeping costs down.

In the previous post, we outlined the problems we are having enforcing a provision in our lease concerning the adequacy of the HVAC system. Temperatures are uncomfortable in dining areas and the lease warrants that the A/C is sufficient to operate a restaurant.

In many cases, large properties are managed by management companies who represent the actual owners of the property. While the management company handles routine maintenance and operation of the property, they do not sign or obligate the actual owner. Your lease is always between you and the owner to be enforceable.

The management company has an obligation to operate the property at the lowest possible cost to the owner. Most of the time they get a percentage of the rents and other fees to maintain the facility. However management companies don’t always act in the best long term interest of the owner. For instance, if they are notoriously poor managers with sloppy properties and inconsistent maintenance, tenants may move or prospective tenants may shy away from the property.

Restaurants should always copy correspondence directly to the owners when involved with problems the management company seems to ignore or refuse to handle. Many owners are totally unaware of what transpires between tenants and the property managers. If owners continue to have issues coming from tenants, you may find service improve through regular contact. Keep in mind, once you go around the management company, your relationship will be adversarial in the future. Sometimes you have to take action when it affects the comfort and expectations of your guests.

We have tried to keep you up to date of all the problems, plans and changes that occur when buying, owning or starting a new restaurant. One of the early posts included lease negotiations and the importance of getting verbal assurances and other matters in writing. We are now faced with enforcing a lease provision the landlord is tryng to avoid.

In our lease agreement we had a provision that called for the landlord to warrant that the exisiting air conditioning was sufficient to run a restaurant. At the time I was very suspicious that there was enough capacity from my experience in other operations. The landlord had an “expert” do an engineering report that said there was enough cooling. Experts and consultants for anything don’t run restaurants! We insisted that a provision be put in the lease regardless of the engineer’s report.

Since we built the restaurant in the fall, outside temperatures here in Florida were moderate. However, now that summer is in full force, temperatures are in the low 90’s outside. The summer heat, a full restaurant and doors opening and closing find us with 80 degree inside temperatures. Customers are uncomfortable in busy times and many have expressed their displeasure.

The landlord was notified of the problem in early June and has done little to address the situation. Little, that is, until we asked our attorney to pursue the matter and enforce the clause inserted in the lease. Now they have sent HVAC people out to make “minor adjustments”. Nothing has changed. This week we will probably have to file an action in civil court to enforce the lease provision. We will post the results and on going problem resolution.

As a side note, we also had a provision in the lease that says if there is a dispute between the landlord and the tenant that requires an attorney to become involved, the winner of the action pays for the attorney fees of the other party. We are confident the owner will need to pay our attorney and costs.

The lack of quick fire posts to the blog doesn’t mean we haven’t continued with our long term objectives. Now that patterns are emerging there are assumptions that can be made about business trends. The first week of July will approach our 6 month anniversary coming on July 9,2009. There have been many surprises, which are normal in the restaurant business.

A few of the variations in our business plan that must be addressed include;

• As a breakfast and lunch restaurant, we had thought the breakfast segment would be much stronger than it has been. About 60% of our sales come between the hours of 9:30 AM and 12:30 PM. The early AM business has been sluggish.
• Sales have settled in between $11,000 to $14,000 per week, which translates into about $675,000 annually in restaurant sales. Typical wall to wall business on the weekends and moderate week days are the normal pattern we have seen. This matches similar restaurant segment chain results for places like Denny’s, IHOP and Perkins. While revenues, in general, are within our goals in the first months, we had hoped to break the pattern of similar restaurants and make the weekdays stronger.
• The recession has caused us to question consumer habits. Is the early morning coffee, pastry and quick breakfast sandwich segment being lost to the steep discounting of the quick service chains? Once the economy improves will more consumers discard the bargains for quality, service and a friendly smile?
• While we have chosen to stay away from price cutting, big offer coupons and other forms of price cutting, is this a good long term strategy?

While these nagging questions linger, we have to take pleasure in the operating results to date. Our sales are less volatile to our similar restaurant a few miles away. Tourist business causes big swings in the other location. Our ability to develop strong customer relationships in a less transient market may be somewhat more difficult, but rewarding over a long period of time.

It is time to look at other changes to keep the trends moving higher. We want to capture bigger market share. We have plenty of competition with a few blocks of us. Independents and chains like Panera Bread, McDonalds, Subway and others keep steady streams of guests coming to their highly advertised doors. We will keep finding ways to pluck a few customers each week from there lines into our seats - one customer at a time!

If I were taking a report card home to my parents a few decades ago, the grade for this new venture would be a B-. Starting a new restaurant is a subject I am glad was never a requisite in high school or college. Somehow I am sure the teachers and professors would be difficult to find for such a course!