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

It never fails. Every time I travel for a brief vacation, I can’t get away from the restaurant business. You have to eat. My mind, eyes and ears tend to observe the events related to the restaurant business unfolding as you eat and drink.

In this case we were in Key west for a few days with a group of friends. While making some general observations like the lack of crowds due to the BP disaster in the northern Gulf, my perusal of the many menus we encountered were, as a general statement, very much the same. Little creativity. Fried shrimp, nachos, tacos and local fish prepared as you like were all ok. The high end restaurants like the old A & B Lobster House, Virgilios (La Trattoria) and Louie’s Backyard are all still great restaurants, but the casual dining restaurants who come and go have a strong element of sameness that you cannot escape.

The thing that stood out the most, however, was the lack of service standards found in this tourist dependent area. Here they have a perception that the customers will only be around for a day or two, so exceptional guest experiences are hard to find. For those of us that have to perform for the same people potentially three or four times a week, the bar is raised for acceptable customer care.

It is a lesson to watch the staff of dozens of restaurants go about their business with little guest attention and universally poor attitudes. In many places sales suffer from lack of attention and indifference. Each year we visit the keys there are dozens of restaurants that are closed, have changed hands and clearly in decline. I always wonder if they could survive by focusing more attention to their service. Would guests come back more than once during their stay? Would guests recommend their experience to other travelers? Could they build a LONG TERM marketing strategy by being one of the small minority of hospitality establishments that pay more attention to the individual guests rather than just the high volume of visitors who just wander in their doors.

Service IS part of marketing. I think captive markets like hotels, tourist centers and high volume walk-in locations can be a reminder for those of us who build customers one at a time through the formation of relationships.

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?

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!

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.

We are in the midst of building our social marketing blog for the new restaurant. The basic structure can be viewed at Maggie’s City Center. While the design, colors and other aesthetics may be slowly tweaked, the elements are pretty much static.

Now is when the marketing begins along with the real value of maintaining the blog. Our plan will include;

• Getting content for the site by discussing it with individual customers as they come in. We want to get business people listed in the reference sections of the blog. The communication builds loyalty and establishes long term connections.
• The second step is to visit the municipal offices of each community listed to get the accurate contact names and numbers of key officials. We also want emergency numbers for services. Each of these visits will include dropping off some of our menus and encouraging the city staffs to join us for lunch or breakfast.
• Next we will target each of the social groups such as Rotary, Sertoma, Optimists and various other business associations to encourage them to get us their event and charitable activities posted to advertise their community efforts. Again, it gives us an opportunity to invite groups of people to our restaurant.
• Concurrent with the steps above we will invite public cultural centers and their members and/or staffs to participate. That includes art centers, marine preserves, wildlife societies and similar facilities to keep their activities in public view by giving us releases on their activities.
• Finally, we will visit individual businesses to encourage them to list their names, addresses and services in our “Yellow Pages” of local business people.

After we have started to collect enough content for the site to have value to our guests, we will begin an advertising campaign to drive traffic to the site. This will include flyers and handouts for each guest and an email to our marketing list of over 1600 opt-in email customers.

This is our answer to the social marketing initiative. It gives us the ability to reach a greater percentage of our customers and prospective customers. We are trying to build long term personal relationships, not just a brand.

In a previous post (April 3, 2009 - Restaurant Social Networking), I wrote about sites like Twitter, Facebook and Yelp. These social networking tools allow you to build personal relationships with people who share your interests and want to talk about the same subjects - hopefully, your restaurant.

The key point I was trying to develop was that a restaurant owner only has a relatively small amount of time to devote to social marketing (and/or networking). Running a restaurant consumes a huge part of your day, leaving only small inconsistent amounts of “free” time to work on marketing projects. Large restaurant chains embrace social networking sites as a method to build their brand. The chains have staff they can assign to this part of their marketing plan. Independent restaurants rarely can afford such a luxury.

In the case of our new restaurant, we want to use Internet social networking, but achieve these goals:

• Reach as many of our customers and potetial customers as possible.
• Use as little time as possible to commit to the long term project.
• Get the community involved including groups, charities and municipalities.
• Interact with all segments of our demographic.

The location of the restaurant is in a small suburban town adjacent to one of the largest commercial markets in Florida (Tampa Bay area). The location happens to be within several blocks of the intersection of several other communities, which all have their own identities. This crossroads location can be a networking nightmare or we can use it to our advantage.

We are going to research the development of a blog to tie the whole area together as one marketing community for us and our other business networking users. Sound complicated? Not really. A blog could;

• Keep track of events in all of the surrounding small communities.
• Allow our business customers to offer their services online.
• Become a focal point for charities to advertise their events and fund raising projects.
• Become a focal point for new residents to find information about the multi-community area.
• Allow our guests to have interactive comments about our food, service and dining experience.

Remember that all of the businesses, charitable groups, social clubs and similar organizations have employees, members, sponsors and participants that we want to reach. That allows us to have a broad communication approach to a large part of the potential customers and existing guests located in a wide radius of the restaurant.

The downside to our plan is the time commitment initially is significant, but in the long run, customers, business partners and community social groups will supply fresh content on a routine basis. It takes only minutes to update a blog, leaving more time to other operations of the restaurant.

More about our research, plan and progress coming in future posts.

As the 90 day mark approaches from the day we opened the new restaurant, it is time to focus on more marketing tools to get communication deeper into our demographic. One of the options is Internet social marketing. Essentially that involves establishing a presence on sites like MySpace, Yelp, Twitter and Facebook.

The publicity in hospitality magazines offers glowing reports about how useful these sites are for retaining customers and networking to gain new ones. I decided to do a little research on these sites and their potential. My research was limited to:

• visiting the sites named above.
• looking at the options, uses and types of postings.
• talking to a few restaurant owners that I knew were using these sites.
• reading the latest information from industry publications.

On the positive side, restaurants can easily and quickly get involved. Most have a quick form to fill outanswering questions either about you or your business. This is your “profile” that is displayed and returned from a searchable database. People who share your similar interests, location and contacts become your personal network. You can chat with the members of your network and comment on any subject you want to search - including your restaurant. As other people join in, they become part of your network.

Almost all of the social networking sites work about the same way. Most have cute names and phrases that go along with things you do on the site. On Twitter, the height of cutesy, a post is called a “tweet”. Very clever. Each site can become addictive and amusing, but the issue is value as a marketing tool.

On the negative side of entering the Internet social networking arena, consider these issues:

• Relatively few of your customers and prospects are being reached. While these sites are very popular and gaining strength, the reality is that your demographic should be 18 to 32 to maximize the value.
• As you get more involved, time becomes an issue. Are these sites worth the amount of time it takes to maintain a presence and communicate with your network members? Can you spend your time in a more productive manner?
• Are you willing to respond to negative and positive reports on your restaurant regardless of their truthfulness, validity or importance?

After considering all the options, for us, the time versus reward isn’t there. I am a firm believer in email marketing and feel that many of the same things can be accomplished using email, surveys and direct contact with a lot less time committed. If your prospects cover a whole spectrum of age groups, income levels, locations and ethnicity’s, many are not part of the digital communication revolution. You have to continue to communicate your message to all customer groups.

The restaurant owners that I talked to who have gotten involved with social networking websites offered a mixed bag of comments. Some were sorry they started because the time expands as your contacts expand. Each takes personal response and attention. One owner told me he had a disgruntled employee write several bad reviews of his operation on Yelp. This caused the owner to refute the dismal reports and forced daily monitoring. You can write whatever you want on the Internet. That is the price of digital freedom!

The bottom line is that we will monitor the value equation of Internet social marketing and ignore the rantings of restaurant marketing “consultants” who say this is a great tool. We will plan our next email and media campaign with the time we would have been “tweeting” on Twitter.

For more restaurant marketing ideas, visit On a Wait, a marketing blog.

In the March 5th post, we wrote about the sales numbers being up and down. With overall revenue generally good, there were trends we didn’t like and decided to address those with some additional marketing programs that may fill in some of the valleys.

Some of the things we did were:

• Highlighted “Early Riser” specials to try to get more early morning traffic.
• Ran a new add in the two local neighborhood papers.
• Started to make calls on local businesses to increase take out sales.
• Used email to feature St. Patrick’s Day Specials (sent two days in advance).

The sales numbers are encouraging in the early stages. Our biggest Tuesday since opening was yesterday. Our second biggest Monday was the day before. Saturday and Sunday’s numbers were better than the previous week.

Are the restaurant’s new marketing programs working? Maybe!

Sometimes you don’t have conclusive answers to all the questions. We know some customers saw the ads. We sold out of our St. Patrick’s corned beef specials. Was that the emails? We have seen a couple of people from the personal visits.

Restaurant marketing programs generally take hold over a longer period of time that create measurable data trends. The results we are seeing seem a little quick, but we will be satisfied with the respectable sales numbers, even if it is an early coincidence or just the combination of things that are just starting to come together.

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.