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

Prior to the recession, restaurant guests seemed to be a happy lot. They ventured into just about any food purveyor that opened their doors partly for exploration, curiosity and culinary adventure. In the last two years wallets closed up like the strings on a beggar’s purse. Consumers with less discretionary dollars to spend wanted value and “comfort”.

If you look the word comfort up in the dictionary, the common definitions include to “soothe, console, reassure, support, encourage and make physically comfortable”. That seems to sum up the average diner who walks into a full service restaurant in today’s new world. The term comfort has to be your goal for the purposes of restaurant marketing.

In the restaurant world we have bantered around the word comfort primarily to describe a particular type of food that made people feel good or brought back memories from earlier days. In fact most restaurants who changed their menu philosophy in the last year or two will tell you that “comfort” foods sell better than they ever have. That is one blessing this financial hurricane has made clear - you can be creative using lower center of the plate proteins and give the guest what they want at the same time.

However, comfort must extend beyond the plate to get more frequent visits from your guests and keep the buzz about your restaurant going. To extend your comfort factor consider these tips;

• Are you offering a comfortable atmosphere that matches your concept and guest’s expectations? Is your restaurant too loud, too quiet, too bright, too dark, too fancy, too casual?
• Physical comforts are just as important. Are your chairs too hard, too high, too soft? Is the temperature too cold, too warm? Do you smell of pleasant food odors or stale carpets and bleach cleaned floors?
• There is comforting service standards to consider. The old days of hard hitting up-selling professed by out of work “consultants” is over. You and your servers need to be less formal and more personal with the guest. Names are important. Smiles are like gold. Haste is unforgiving. Manager visits are expected. Greetings on entering and exiting should be part of every staff member’s vocabulary. The days of the pompous waiter in the tux are over.
• Value IS comfort. People want to know they are making good buying decisions. That applies to buying a car or a meal. Highlight the things that make the guest’s experience at your restaurant a value. Can you rattle those things off right now - this minute? Is it portions, prices, entertainment, friendly servers, exceptional chef, fun, easy to park and enter, quick service? Embed those comforting aspects of your restaurant in your server’s mind, your POS materials and advertising as part of your marketing plan.

Who hasn’t been to a mall? On a recent day with my grandchildren, a much dreaded trip to get something for one of them, I again found myself not only in the mall, but drawn to the food court by two things. The first thing was the tugs on my hand by my grandson and the second was the smell of cinnamon buns that was the motivation for the younger generation.

While sitting in the mall, there was another memory. The young Chinese lady who was passing out bite size pieces of bourbon chicken. The flavors were immediately recalled into my memory. Sweet, charred and savory bites of chopped chicken pieces. My real interest was the people who were in line to order food at the Chinese eatery’s location at 11 AM in the morning. The other booths were serving stragglers as they wandered through the colorful area, while the bourbon chicken samples were doing the trick for the Asian inspired venue. Too early for lunch and too late for breakfast, but they were doing business.

Over the years I recalled the number of changes that had occurred for mall food court vendors, but the Chinese eatery had prospered. Taking a slow time and building sales for the future. You may not be hungry now or be in enough of a hurry not to be able to stop, but that lingering taste will be remembered for a long time to come.

When a restaurant has a couple of servers faking trying to stay busy and a kitchen just biding their time until lunch or dinner service begins, what are you passing out? A quick restaurant marketing lesson for the future - like tomorrow!

In a recent article the NPD Group, a statistical research company of restaurant trends, said that total restaurants in the US declined in 2009. In general, the only segments seemingly holding their own were the quick service and fast casual chains. Hardest hit was fine dining and independents in all segments. The stats should not surprise anyone.

It should be easy to figure out that chains have more resources than independents. Many of them are feeding on themselves by selling company owned stores to franchisees and building sales by loss leader promotions at the franchisee’s expense. The arrogance of the fine dining segment, who failed to recognize early in the recession the customer’s reluctance to pay exorbitant prices, have just begun to realize dining habits may have changed for many years to come. Even the celebrity driven, curiously named restaurants of famous chefs like Gordon Ramsay and many other media made restaurant “stars” have shuttered their doors.

While most of the chains will survive, although several smaller ones have filed for bankruptcy, the real disaster is the loss of the independent restaurants across the country. These are places that have seen the proprietors put their heart and soul between the walls of memento filled structures dedicated to serving their guests the best they could. Unfortunately, the guests had to endure the same economic impact as the restaurants that wanted to serve them.

Many people, even wealthy people, have been clutching their bank statements as mutual funds declined, the security of jobs were in question and the financial structure of the country was threatened with total failure. In the main stream, millions of people are out of work and many more are losing their homes to excesses of the past. Eating out has become less of a habit and more of a thoughtful experience mitigated by relative financial condition. Big spenders moved down a notch, the secure middle class went to more fast casual and the unemployed or lower income segment moved quickly to QSR’s.

For independent restaurants, many have closed. Others are digging deep in their pockets to survive and still more are hovering daily between solvency and bankruptcy. The end of the recession is not at hand. There are no quick fixes that will magically transform the world overnight.

There are the exceptions to the gloom and doom word picture. Many restaurants made the adjustments early. The owners, management and chefs came out of the kitchen and recognized their patrons were disappearing. Management listened to concerns of other customers, new and old, who were still visiting, watched their ordering habits change and reacted. Most of these restaurants are doing well and many have grown or “beat the street” meaning doing better than most.

If you are an independent, keep connected to your guests. Listen to the customer and not to media. Forget the “restaurant consultants” who believe coupons, discounts and promotions will solve all your problems. Don’t believe the the remarkable stories about social media and the instant successes - it doesn’t happen that way. If you are struggling and can make it for a few months more financially, here are a few steps that may salvage your dream:

1. If you haven’t done it, make the toughest financial cuts you have ever had to make. That may include the loss of long term employees, reducing salaries, wages and/or hours. Every expenditure should be questioned, no matter how big or how small.
2. Today, not tomorrow, talk to your suppliers. Find out what IS selling. Even more important find out what is NOT selling. The larger purveyors can help you with refreshing new ideas for your restaurant. Use them - most are looking for new business also.
3. Creatively change your menu. Look for value from a customer’s perspective, while maintaining a reasonable margin. If $25 steaks have been turning grey on your line, try the alternative grades and cuts. Let the customer know you are searching for alternative proteins to offer some relief to their pocketbook crunch. Make that menu change today and let the customer know it. In the past, restaurateurs have always focused on higher priced items. Now your focus should be better value items. If you don’t offer them, guests will migrate elsewhere.
4. If you haven’t used inexpensive marketing tools like email marketing, viral marketing, networking, word of mouth campaigns, community involvement and dozens more, start today - all of these take time to produce long term results.

Finally, if you are lost, and feel you can make it with some direction, send me a private note through the comment section of the blog. Tell me your circumstances. All comments are first directed to me before they go public. None will go public that deal with any individual restaurant. That keeps the “consultants”, spam and sellers of products and services from ruining this restaurant blog designed for the independent restaurateur. If nothing else, I will send you a copy of The Restaurant Ebook for free or at least the section titled One Hundred Ways to Market Your Restaurant. All 100 ways cost little or nothing. Maybe all you need is a restaurant cheerleader. I can be that also. One thing I can assure of - I know what you have been dealing with! My three restaurants are in the same economy as yours.

 Note: No identifiable information will ever be published!

It is sad to see independents close their doors. Let’s re-connect with the guest and keep the dreams alive.

As a general statement, social marketing using sites like Facebook, MySpace and Twitter are more time consuming for the return than most independent restaurants can afford. These sites have their dark sides as reported and discussed in previous posts. However, there are niche exceptions.

Recently I was asked to help a bar owner who felt his advertising and entertainment costs were bringing in sales, but the bottom line was suffering as entertainers demanded more money and media costs continue to rise. His venue was a popular spot in a major metropolitan area with a capacity of about 300 people. His success was evident with waiting throngs of people on Friday, Saturday and Sunday nights.

The owner was hesitant to raise prices during this economic storm, but wanted to find a way to cut costs. Social marketing using multiple sites like Facebook and others is a perfect application. By building a presence and followers, he can ween himself away from costly print media. Patrons can find out who the bands and entertainers will be on any given day - at little cost to the owner. The bonus is that he has immediate response to the type and popularity of any band or DJ he may want to feature.

To build a presence on social marketing sites was the owner’s next challenge. He could hire a marketing company to do the work for him, but the cost may equal his adverting costs he is trying to reduce. The owner’s lack of Internet savvy precluded him from becoming an immediate leader for the marketing effort. The solution - pay one or more staff members to become the bar’s emissary online. Most of his staff was in an age group equal to his client base and he was surprised to find out that several spent a lot of time on the top sites he wanted to target.

Recognizing that the transition from print media to digital would take some time, the owner created a six month plan to build his following. The goal is to eliminate 80% of print media costs (about $1300 per week) and employ staff members to create the “buzz” he needed to get started (about $200 per week). The added benefit was also his ability to hire entertainers that were popular.

The plan will work. The case is an exceptional use for an over hyped marketing tool.

Word of mouth is unequaled in the power to get new customers through your doors. Word of mouth marketing is also one of the most universally misunderstood. Just because Aunt Violet made a comment to a neighbor that she visited your operation and the food was “good”, that is not word of mouth restaurant marketing. While it was a positive sign that Aunt Violet made the comment, having “good” food applies to 75% of the independent restaurants in the country.

True word of mouth restaurant marketing includes customer training. That’s right, training the guest to be your ambassador to friends, family and acquaintances. When a customer knows what to say and how to describe your restaurant, the effectiveness of the communication is of far more value. You wouldn’t think of sending a server to a table without training — why would you send your guests into the world without the right things to say?

For instance, if Aunt Violet had told her neighbor, “ Joe’s Restaurant had great food because they used “all local citrus” from farms in the area that reminded her of what “fresh really is”. Where do you think a phrases like that came from? What if Aunt Violet had stated, “Joe’s had rustic bread that tasted like it came from a monastery in France”. Where do you think that description would come from? How about bacon that was “apple cured and thick cut”.

Restaurants communicate with guests in many ways. The common methods are through menus, servers, table POS, signs and advertising. Repetitive phrases that describe your food, your differences and the things that make the dining experience unique can be embedded in your guests mind. I call them “talking points” much like speakers and politicians use in preparation for speeches. Do your servers, menus and signs contain talking points your guests can use when describing their visits to your establishment?

As 2009 comes to an end, 2010 begins with hope and positive signs for the restaurant industry. The economy appears to show some trends that indicate the recession is loosening it’s grip. While stocks have recovered to levels of a year ago, they still show some volatility. Retail sales, consumer spending and the housing market each have some growth signals beginning to appear. The real recovery for restaurants will begin when unemployment begins to drop and disposable income is again available for restaurant visits.

While the industry hopes to crawl out of the doldrums late in 2010, restaurateurs cannot afford to wait or rely on shimmering signs of hope. The business has changed and will continue to face challenges for the year to come. That caveat begins our list of resolutions for restaurants in the new year;

• Resolve to not rely on a potential recovery to improve your sales, service and marketing. What if we have a “double-dip” recession?
• Resolve to face the new year with a solid marketing plan the fits your restaurant and demographics.
• Resolve to learn more about your guests and their eating habits that may have permanently changed for the foreseeable future.
• Resolve not to listen to “quick-fix” consultants who tout the imaginary overnight sales boost from mobile marketing, social Internet marketing and other time eating market magic that doesn’t fit the average restaurant.
• Resolve to keep butts in seats by good old customer communications through face to face contact, local network marketing and customer loyalty programs with time versus results rewards.
• Resolve to avoid big discounts that may bring short term returns, but harm your brand forever. Rely on value, creativity and resourcefulness to offer better values to guests.
• Resolve not to be drawn into the loss-leading habits of the big chains who are feeding on their assets and franchisees to keep sales and earnings positive for shareholders.
• Finally, resolve not to ruin your life by feeding a dead restaurant until your family, your friends and customers have long ago abandoned the dream. Live to fight another day, maybe a new dream down the road.

2009 will be remembered as the year that changed the restaurant industry and dining consumer perhaps forever, but at least for the decade to come. Change with the times and build your business with what exists today, not what was in the past or hopeful predictions of the future.

When the Tampa Bay Buccaneers hosted the Green Bay Packers for many years, one of our restaurants always had a banner welcoming the Green Bay fans for the game. Many of them stayed nearby at hotels also advertising their welcoming hospitality to the traveling Packer fans. Over the years the game became a friendly rivalry that brought annual guests that enjoyed the verbal exchange about who would win the game.

If major event promoters get their way, this form of so called “ambush” marketing will be prohibited in any form of advertising - unless they pay for the rights. Sound crazy? Do a little research online and you will find that by 2010 the NBA, NCAA and Olympic games are starting to negotiate with the host cities to require a ban on using the event name within a preset distance from the event. That means if you have a bar, restaurant or any other business, you could be fined for using the event name in your advertising!

Besides the fact that the expression of hospitality is warming to visitors, our tax dollars are used to provide support in many different ways for these events. Some tax dollars even build the venues where the events are played. Now you may have to pay for the right to advertise your support for the event - what’s missing in this picture? The “hoopla” and excitement that keeps fans coming back would be gone.

Ambush marketing is a term probably created by promoters who want a bigger slice of revenues generated from taxpayers support. Could these sporting events be done without the support and investment of tax dollars? If not, then the public, including businesses should have the right to advertise and encourage visitors to utilize there service or product as part of the event attendee’s experience.

The independent restaurateur has been at the point of a big economic shotgun for almost a year and a half. One wrong move and the deadly blast of pellets pummels the body and soul of the restaurant. Food costs, labor costs, lower consumer spending, increased industry regulation and changing guest eating habits have faced the independent restaurants across the country.

While there are signs of an improving economy, restaurants cannot plan on the consumer returning to pre-recession habits for a long time to come. Many diners have changed their eating habits and others continue to face an uncertain jobless recovery that will keep restaurants at the tail end of the recessionary curve.

What should the independent be doing? Here is a list that may help your planning for 2010:

• Don’t wait for the economy to rebound and bring customers crashing to your doors. Long term marketing efforts shouldn’t be ignored, but short term results need to be your focus.
• If you are struggling now, it isn’t going to get better tomorrow by doing the same old thing. Change is difficult, but failure is worse. You may have to do things you have never done. Coupons, discounting and lower prices may be the difference between saving jobs and generating enough cash flow to pay bills. Most “experts” think discounting may hurt your brand, but not as much as closed doors.
• Stop any impulse you have to listen to restaurant marketing gurus who have the answer to sales results overnight. It ain’t gonna happen. Mobile marketing, social marketing and other tools are aguably useful over a long period of time, but for the average restaurant they don’t deserve the long hours and cost to implement when the battle for survival is imminent.
• You must become mentally in tune with your guests. Who are they? Where are they? What do they want? How have they changed? What drives them to your door or your competitor’s door? Will they increase their restaurant visits if you …..? You finish the line!
• Even if you could afford the cost of big newspaper and TV advertising, don’t be so sure it will produce for you. Consumers are turning to the Internet for news and entertainment. Newspaper sales are declining. TV audiences are declining. Grass roots, personal marketing may be the least costly and most productive form of getting your message out.

There are no quick fixes, but there are ways to build your business the way it has been done for decades. Provide a consistent product at a value to the guest. Get that message out and capture new guests one at a time.

If you are starting a restaurant now, there are big potholes in a long road. In a “normal” year like 2007, there were about 72,000 restaurants that opened and 60,000 that closed. While statistics for subsequent periods are difficult to produce, everyone agrees that there are more closings than openings. In fact, bankruptcy records may give some idea of the numbers. There were 43,500 business bankruptcies in 2008. Through June of 2009, there have been over 30,000 cases filed already.

Is it all doom and gloom? Absolutely not. If you are paying your bills, seeing some head count growth year over year and finding ways to keep costs going down, you can easily survive with a smart reaction to ongoing economic woes. Even a few new restaurants will make the grade if they have done their homework, planned properly and have sufficient resources to withstand any planning mistakes.

2010 will be just as challenging as 2009, but at least we know what to expect and how to react to the recession imposed environment.

The majority of money invested in the stock market looks at the long term rather than overnight profits. Yes, there are day traders that try to bet on trends that impact some stocks on a short term basis. They get in and out quickly, but the big investors, mutual funds, pension funds, institutional investors and most wealth accumulators look at years and months rather than days or weeks.

Restaurant marketing is an investment that can return short term returns and long term results. You have to choose what motivators you use according to the results you want to achieve. There are extremes that are common in both short and long term investments. For instance, if you look at Denny’s breakfast giveaway program in the first part of this year, they gave away their food and had lines around their operations waiting for a free meal. Traffic was driven to their stores, but long term results haven’t stopped their same store sales from declining.

On the other extreme,  long term marketing programs take months and/or years to effectively get results. An example of a long term strategy may be email marketing. As your email list grows, so do the customer responses to simple programs. If you offer a birthday dinner as a motivator, your guest will bring in his birthday party of four or more people to celebrate, but the real return takes constant list building that creates loyalty to your brand.

Somewhere in between the long growth approach and the quick freebie schemes are marketing programs like community involvement, direct mail, special events and social marketing through Internet sites.

When developing your marketing plan for a new restaurant, you should try to look at all the options, but remember there is a price to pay in real dollars and time to implement many strategies. Restaurateurs generally wear so many management and time eating hats that time becomes as precious as any other asset.

In the case of our new restaurant, we can see our long term strategies just now beginning to pay big rewards as the industry has struggled in this recession. Couponing and discounting has had a very low priority for us. Building quality and customer service along with guest loyalty has been our restaurant marketing program from our January opening. We are on target to meet our goal of $650,000 in sales by year end.

A welcome reward was received on Wednesday this week when we were informed we were chosen as runner-up for the Best Breakfast in Tampa Bay in a local reader’s poll. The magazine has an annual Best of the Bay for all different types of restaurants and entertainment venues. First place went to a chain competitor called First Watch which operates in about 11 states with numerous locations in the area.

While the competition had the usual nominees like IHOP, Denny’s and other big guys, we were most pleased that we had made an impact by being ranked over many local independents that have a great product and long history.

If there is a message here, it shows that in our 9 month operating history, you can compete and make an impact. The second lesson is that email marketing helped us achieve this award. It is a powerful tool to communicate with your guests. In our case, we merely made our email subscribers aware of our nomination and asked them to vote for us. We didn’t really believe that we could beat out all the chains in such a broad market, but we did!

If you are starting a restaurant now or next week or next year, start your email list now. Restaurant marketing is a challenge that is rarely planned on a long term basis, but here is an opportunity for your marketing to begin now. If you are a seasoned veteran of the business and struggling through this economy, how is your email restaurant marketing plan working? Don’t have one - begin it today.