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

Clearly there is a national “fad” with hamburgers. It seems the fascination with big, juicy hunks of fried ground beef topped with some kind of cheese is trendy. Celebrity chefs are capitalizing on the phenomenon with burger boutiques and the big chains are bucking the health police by offering larger more complex burgers.

Question - Is this bovine craze more about the consumer’s limited pocketbook rather than some new taste? I think so.

The recession has definitely changed the way people are spending their hard earned dollars for eating out in restaurants. Everyone knows there is a limitation on the cost of a hamburger, no matter how big or how good it is. So walking into a trendy burger joint doesn’t mean you will have to shell out $20 to have something you really like that is satisfying. The customer knows they won’t have to search the menu to find a reasonably priced entree and they don’t feel like they are missing the overall restaurant experience by waiting in a drive through line under the golden arches.

Since my childhood days in the sixties, hamburgers have been a staple in the American diet. Good for you or not, few people haven’t longed for that greasy ground concoction topped with anything that tickles your taste buds. Hamburgers aren’t new, but consumer restaurant discretionary spending limitations are new. The combination of the burger and spending conservatively has fueled the biggest restaurant growth segment in history that is totally focused on one simple sandwich.

The lessons for restaurant owners in this economy are simple. Rich or poor, old or young, people want comfort, satisfaction and simplicity in their food choices. They are taking less risks and their willingness to venture a few extra bucks on an unknown is very limited. Where does your menu stack up based on these observations?

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!

Nothing has challenged the restaurant industry like the past 18 months. Rising prices, lower discretionary spending by consumers and chains offering junk food at or near cost. The battlefront starts with getting return visits from guests who want value. Rich or poor, everyone is looking for the value in every dollar they spend.

One conerstone of the total value experience is what’s on the plate. Is the coverage good and is it exceptional for the dollars spent? In the breakfast and lunch business we have had to make sure the diner perceives every menu item as a good way to spend a few dollars as compared to the competition. Creative garnishes and fillers keep meeting the guests expectations in terms of quantity.

To find that creative inspiration look to your inventory list. What are the items have a low cost and high margin, but offer good plate coverage? Here are a few we use:

• Eggs - last year this time we were paying double what we pay now for eggs. An egg costs under ten cents each. Gives good color and coverage in a variety of ways.
• Grits - low cost and easy to hold, prepare and cook. They also can be used in a number of ways from polenta to baked cheese grits. The same applies to oats, barley and other grains.
• Flour - wheat has almost doubled in price, but the overall value of this ingredient is limitless. Used for flatbreads, easy cakes, pastries and dough can produce some inexpensive plate fillers that can offer something extra that enhances the customers experience. Pancakes, of course, lead the way in the breakfast business. Adding a couple of savory silver dollar pancakes or Johnnie cakes to a lunch item will get the guest’s attention.
• Vegetables - prices across the board are much higher for fruits and vegetables. However, there are still some relative bargains like potatoes, various other roots like yucca and carrots. One of the biggest fruit bargains continues to be bananas which can be made into various components like filler for cakes, sauteed like bananas foster and filler for pancakes and crepes.

Start your creative thinking with an inventory list and a few Google searches. Ideas may be a click away.

While testing and tweaking the menu for the new restaurant we built, several interesting concepts have been explored. Three issues were considered for the long term success of a particular dish. What makes it sell for an extended period of time?

Some would argue that in this economy, for a casual restaurant, the key is the price. That is certainly partially true - only to the extent there is also value. You can offer a 99 cent hamburger and sell it, but will the guest order it again? Only if the other two components are present - eye appeal and taste. There are many chains out there dragging customers in with very cheap specials. Will the customer return and buy the product again? In most cases the answer is no if it is not perceived as a value.

While testing, we stumbled on one dish that featured a low cost, extremely good eye appeal and great taste since it was a smaller combination of items already on the menu. The combo’s sales built for the week long promotion. Customers came back several times during the week. Sales grew daily of that item. When that happens, you have the “perfect storm” of menu item creation.

The best part was that we were able to produce the item within our food cost parameters (25%). Let the creative juices flow and keep your inventory and food costs close at hand.

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 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.

As i mentioned in a previous post, the most frustrating part of building a restaurant is waiting on permits and regulators to do their job. Even though we are in a terrible economic slump for building, the time frames for the issuance of permits has remained the same (4 to 5 weeks). It is sad, costly and common.

We have kept busy with projects since the completion of demolition and the filing of the restaurant plans.  In some cases, we have done some construction that was not permitted, but we took the chance of not getting caught. We have now laid tile in the front half of the building, leaving only the kitchen and bathrooms when we get started. Double french doors replaced the old glass commercial door. The plumber has even made cement floor cuts, ready to begin underground drainage as soon as the permits are issued.

Tomorrow will be the beginning of the week. On Friday we were told the “trades” reviewers should be done with the revised plans. It didn’t happen. Hopefully Monday will be the day.

We have also;

• Drafted our restaurant opening marketing plan and will finalize (and post) as soon as we can plug in dates.
• Ordered many of our small equipment when found on sale or a bargain.
• Booths are being built and awaiting an installation date.
• The kitchen hood is ready to be placed when the permit is issued.
• Built an outside enclosure around the back door and walk-in refrigerator/freezer.
• Assembled many of the forms we use in the other two restaurants.
• Tested several products for possible inclusion on the menu.
• Picked wall coverings and beginning to buy some cosmetic decorations.

We are ready to build the restaurant!

For those of you following the adventure to open a new restaurant, there are many roadblocks, frustrations and wasted time. However, one of the fun things is developing food items, ideas and testing for menu items. While this new restaurant will be a second location of an existing concept, there will be differences. Our demographic is slightly different and we want to have signature items at each location.

To develop your menu, it starts with ideas and, of course, your theme. The new restaurant is a slightly upscale breakfast and lunch operation (as a side note, we call lunch “Blunch”, since we serve breakfast entrees all day).

The steps are:

1. Start wilth ideas that you accumulate. Some may be stored in your head for years. Others you will come across as you move forward. Write them down. We have chosen to share the thoughts with a page dedicated to menu ideas. Click here to see some of the beginning thoughts.
2. Each menu item has to be tested and re-tested to create a recipe that will work in the volume of a restaurant kitchen. Just because you can produce a dish at home doesn’t mean it can be efficiently produced in a large volume.
3. Make sure suppliers can furnish the ingredients and your inventory and equipment can support the item.
4. Ask for opinions from someone who will share the honest thoughts with you. Family and friends don’t always give the best test results.
5. Don’t wait until two weeks before your opening to begin the process. You will have even more pressures just prior to opening. In this case we have at least 6 to 8 weeks.

Remember, your job is to meet or exceed the guest’s expectations. Don’t let your ego build recipes that only you may like. You can visit this link on a regular basis to view the ideas as we add to the list.