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

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.

A new restaurant operation is like bringing a puppy home from the dog pound. Everybody loves it, but you are the one who is up all night with the crying and yelping, cleaning up the messes until trained, picking up the chewed new pair of shoes and tripping over the ball of fur with every step.

From the outside, the puppy is cute and cuddly - just like a new restaurant. No one sees that you are scrambling to train staff, get the food out of the kitchen perfect, adjusting schedules, paying unforeseen invoices and hoping there is enough cash flow to make at least your break-even point. It’s a nightmare.

The first 30 days of any restaurant operation cannot be evaluated. Sales are driven in many cases by the curious who just visit because you are new. Costs are escalated due to extra staff, over ordering of product and the usual smallwares you need that were not in the plans. Throw the first thirty days out. Don’t try to judge your future based on your first month.

The days that count are the 100 days that follow the opening month. These are the days when reliable and predictable trends begin to develop. The “Big 100″ (100 days following your first month) are the days that can tell you what you need to do and set the tone for further growth and profitable enhancement. Here are some things that should emerge with your analysis;

• You should be able to accurately discover what your exact daily break-even number is.
• You should see a trend of lower operating costs that should be going down due to tweaks you make as you age. Food costs should be concise as compared to sales.
• There should be a clear picture of what your marketing has done and the demographic draw of existing business.
• The Big 100 should have produced the numbers that allow you to go back and compare to your plan. Are there adjustments necessary to the plan or your operation? What were the biggest surprises? What were the biggest disappointments? What new goals do you need to establish? Is your menu where it should be?

The Big 100 is the platform for you next 6 months of planning. What marketing changes do you need to make? What food trends do you want to expand? What internal changes need to be made to reduce costs or waste? Staffing changes? Hours of operations? Does the seating, lighting, decor and customer areas need adjustment? All of these questions and many more become the basis for your new business plan.

After a little more than 60 days of business, it’s time to start looking at tighter cost control. In the initial stages we focused on the food, customer service and marketing. We costed out our menu and knew that projected costs were in line at the time we opened. Since that time we haven’t done much to look at operating costs.

We will look at these areas:

• Scheduling and better management of time in the kitchen and front of the house.
• Food costs as the market continues to fluctuate (up and down) for commodities like meats, eggs, dairy, cheeses and wheat based products.
• Elimination of services, menu items, fixed costs, maintenance, and general administrative costs that may not be needed.

While sales are holding up well, we can focus on the cost to do business as a long term operational basis.

As the new restaurant enters its third month of operations we see that sales during the week are much different than anticipated. Carry out business is less than expected and highly unpredictable. We may do $25 dollars worth of take out sales one day and $200 the next day.

To promote carry out sales we created a program with the following:

• Set a goal to reach 100 business within our area and double our take out business.
• Create a fax order form that has our most popular breakfast and lunch items.
• Put together 100 file folders that have a label on the outside, fax forms and our complete menu inside.
• Assign staff (Manager, servers) to personally distribute the folders during the coming week.

The total cost to implement this program is under $75 (not including labor). The results??? We will report the numbers in a couple of weeks.

The first full month of operating the new restaurant was February, 2009. A reader of the blog has requested we post the first month’s statement. By following the link above you will see the Profit and Loss Statement generated before our accountant audits our entries. The only known missing item is an entry for depreciation, which is a non-cash item.

While the numbers are accurate, the early stages of any operation can be misleading on a long term basis. You have costs such as extra staff, training, items you purchase that were forgotten or changed since opening and similar adjustments that may not reflect long term results.

The Profit and Loss Statement may help someone who is trying to prepare a business plan for a new restaurant. As you can see, we tend to detail expenditures in our restaurants and have period to period ability to recall and compare the data. We use Quickbooks Online for our data entry. Our accountant has access to the accounting data through this service.

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.

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.

With a soft opening behind us and confidence in the kitchen and service staff, it is time to extend our marketing to our radius of influence to get new guests into the new restaurant. As we implement the plan, our focus will be on all the elements of marketing - not just advertising.

Marketing has three components:

1. Getting your message to the prospective guest.
2. Selling your product once your customer responds by coming in the restaurant.
3. Delivering the product in a manner that meets or exceeds the guest’s expectations.

The first step in creating our plan was to evaluate our demographics. Our two mile radius is heavily populated with residences and businesses along the main street. During the week we want to develop the lunch trade and take out business from local offices. Weekends will be busy with residents who eat out on Saturdays and Sundays, but may skip breakfast during the week.

A small part of the business development will include the traffic zipping by on the way to work.

Each segment of the plan is designed to meet the demographic parts listed above.

1. Getting Our Message to the Prospective Guest

The message during the first initial contact will be that a) we are open and b) we serve a country/southern style cuisine like our childhood memories. This theme will be carried in our advertising and customer communications. Below are the plans.

Steps Used to Communicate our Message:

1. Select print media to advertise for the next 30 days. We chose two local weekly newspapers that cover residences and some businesses within our 3 mile radius.
2. Send an email message to a database from our other restaurants to let those customers know of our new location. That list has over 1300 names on it, but may not include our entire radius and very few businesses. Two weeks after the first communication, a second email will highlight a “Grand Opening Weekend” or feature some of our unique menu selections for breakfast and lunch.
3. Prepare and distribute a small flyer to businesses that we have developed a relationship with during construction. Ask them to place on their counter (sample in earlier post).
4. Make personal visits to area businesses with take out menu’s and food samples on a daily basis. Our goal will be to see 5 businesses a day during the week.
5. Purchase an advertising contract with a company that supplies direct communication to every new household in the radius of the restaurant.
6. Added the new location announcement and menu to the existing website for the restaurants.

2. Selling Our Product

Our product is different than competitors in the area. We need to distinguish ourselves because we are slightly more expensive and the concept is a little more upscale.

The steps to selling our differences started with server training before we opened and continue with ongoing reminders of quality. Ingredients we use are exceptional in the breakfast business and we highlight brand names.

Steps to Selling:

1. Server training, server testing and daily reminders explain our food, ingredients and cooking methods. Bulletin board notes and Manager working with servers on weaknesses is a continuous process
2. Table POS stating the differences.
3. Menu’s reflect individual items highlighted by our original creations and special brands and/or products that our competitors can’t duplicate.
4. When possible, samples of various items are sent to tables that may have questions about our menu selections.
5. Our product is more than food. We take a slightly light-hearted approach to the atmosphere of the restaurant. We want it to be fun and funky kind of neighborhood place. The servers, décor and surroundings need to emulate our concept.

3. Delivering Our Product

The marketing process is not complete unless you deliver what you are selling. Many restaurants are experts at advertising and get many customers through their doors, but fail to deliver what they promise. The last step is the way you get customers to return.

Guests become loyal repeat customers one at a time. That means every facet of the delivery process must achieve the overall goal of meeting or exceeding the customer’s expectations. To accomplish the goal;

Steps to Delivering Our Product to Meet the Guest’s Expectations;

1. When the guest walks in the door, they must be greeted by a cheerful staff and a bright dining room with other satisfied guests.
2. The guest must be sat and offered a beverage and menu immediately.
3. Servers must have the knowledge and confidence to explain each menu item, the preparation and ingredients.
4. Little time is spent waiting between server contacts from beverage service to ordering.
5. Food is prepared in a reasonable amount of time and delivered hot and fresh.
6. Each plate must be neat, garnished properly and colorful.
7. Each order is checked as it leaves the kitchen and the server must check the order before delivery to insure accuracy.
8. After delivery of the guest’s order, the server must re-visit the table within two minutes to see if there are condiments or other needs the guest may have.
9. A Manager should visit each table to inquire about their satisfaction.
10. Checks are always in the server’s possession and ready to be delivered to the guest as soon as they seem ready. Tables are never left for the customer to stare at dirty plates.

If for ANY reason a guest appears to be unsatisfied, a Manager must visit the table and see what is necessary to turn a bad experience to a good experience.

Plan Summary

Will the steps we have chosen to take in the initial weeks be enough? Only time can answer that question. Certainly the plan must be managed, modified and expanded as we look for measurable results in the coming days and weeks. The key, for now, is execution. A daily recap of sales, glitches and customer comments will keep us focused.

The entire staff must be involved to make this Marketing Plan a success. Prospective customers become loyal guests one at a time. If we can give each customer the experience they bargained for when they walked in the door, we can win our share of the breakfast and lunch dining crowd in our radius of potential guests.

When you open a new restaurant with a relatively soft opening, you hope sales grow through word of mouth. This is the strongest form of marketing you can do. If your product and value is acceptable to the customer, plus you meet service expectations, increasing sales will be the reward.

As I indicated in the previous post, the weekend would tell the story if our message was spreading throghout the community. On Saturday we reached a new plateau with $2000 in sales, despite the season’s coldest weather and no seating outside. Happy we are, but the work isn’t done.

As sales increase, both good and problematic things occur. The good outweighs the bad in our case. Here is a list of things we will continue to work on:

• At several points during the day, we were on a wait. We have to subtlely find ways to turn tables a little quicker. Things like pre-bussing, slower coffee refills after guest has finished eating and quicker table setup will help.
• Notably the new servers are having a few problems ringing correct descriptions of the food they want. Better menu knowledge and consistent input into the kitchen will help ticket times.
• Any restaurant strives for consistency. Servers need more direction on the items they prepare at their station. Salads, topping waffles and plate garnish was inconsistent.

The good part of the day was the kitchen’s ability to meet reasonable ticket times, even at the peak of business. While we have potentially another 25 seats outside during pleasant weather, it appears we have the capacity in the kitchen. Another busy day will confirm that.

Another positive was relatively few problems with any returned food, customer complaints or server errors. That means training and diligence in policing each ticket is paying dividends.

As business increases, so does the need for inventory. We have been trying to keep our Inventory Form up to date as product came in the door. The link above shows an Excel spreadsheet that is color coded based on various items we want to note. One color may be for a particular supplier. Price highlighting means a date when last price confirmation was made. Your form can be modified according to your needs.

Your ability to maintain inventory levels is important because:

• Your restaurant cannot  be out of menu items on a regular basis to avoid customer disappointment.
• Over ordering can lead to waste and spoilage.
• Ordering the proper quantities negotiated with suppliers will keep costs in check. Make sure your supplier has a copy of your inventory sheet for their records when placing an order. It will simplify the process and reduce order mistakes.

Overall, the first eight days of operations have been very gratifying and helps to alleviate some of the reservations we have had about opening a restaurant in this economy. We still have a lot of work to do, but we feel we are on the right track.

The opening of Maggie Mae’s on the Bluffs in Belleair Bluffs, Florida has been a six month rocky road. The many posts on this blog have detailed the problems, hurdles and emotions of trying to open a new restaurant. The last thirty days have been intense in terms of time committed and concentration of resources to accomplish flipping on the ”OPEN” sign.

The new facility officially opened on Friday, January 9, 2009, more than six weeks beyond our projected opening date when the project was started.

Below is a day by day recap of the first four days of operations.

• Day One —  We turned on the open sign at 6:30 AM on a Friday. Our first customer didn’t come through the door until about 7:30 AM. It was a long hour with the entire staff waiting and wondering if we were ready and if anyone would come in at all. By the end of the day we had managed $550 in sales. However, it was clear the new servers had to do more training on the menu and the kitchen needed some procedural changes. The breakfast and lunch business parts were about equal in the number of customers.
• Day Two — Saturdays are the second biggest day of the week for breakfast guests. We had spent the overnight hours adding some enhancements to the kitchen such as shelves, moving the order printer and getting some utensils that escaped our initial inventory. The photo in this post is the kitchen line. Barely shown is a double oven followed bt the stove and salamander combination, the griddle and fryer. You can see a portion of the server window in the middle right of the photo. Second day sales were a respectful $850. The procedural and kitchen modifications clearly helped food delivery. However, the servers were still not trained well enough on the menu despite our request to study it closely overnight.
• Day Three — As usual, Sundays start lowly. People get up later and eat breakfast as a treat they may not enjoy during the week. Overnight we had compiled a new server menu test to force familiarity with the menu. The questions were based on what had been experienced in the last couple of days. The servers each took the open menu test before starting their shift. By the time customers finally showed up, the apprehension about the day was shown by servers, staff and management. I had been confident that we would have a good day, but the minutes between orders were starting to wear on me. Watch what you wish for! When guests started coming in after 8:30 they didn’t stop. At one point we filled every seat and ended the day with good sales of $1650. The kitchen, servers and procedures went extremely well. Ticket times were good with only minor anticipated problems.
• Day Four — A Monday. This day would tell the story. If our word of mouth opening had been successful, we would have a decent day. Of course, we didn’t expect a repeat of Sunday, but customers did respond and we ended the day with $900 in sales. A a business day as opposed to a weekend, we had a good business lunch crowd that exceeded breakfast.

Overall, we are extremely pleased with the results of our very “soft” opening. Part Two of this post will recap how we got this far from a marketing perspective. Marketing for a new restaurant is always a challenge, but our plan was in place and working so far.