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

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!

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.

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.

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.

On Friday, January 23, 2009, we established a high sales number for a weekday. Sales reached over $1500 as weather improved in Florida, we got to seat outside. Customers enjoy our patio seating.

On Saturday, one of the busiest days of the week in the breakfast business, sales reached almost $2500. This business level tested our kitchen, the wait staff and all of the procedures we hoped we had in place. Several customers mentioned an ad we started on Friday and will continue in a weekly newspaper for 30 days. That is one of the steps in our marketing plan.

Today will be busy again, but all of us need to focus on improving small details that take time and reduce the time in front of the customer and focusing on faster, more efficient service. Servers will be briefed on our objectives to eliminate bottlenecks. Some of those include;

• Improving knowledge of the menu, so there are less questions.
• Consistency in entering orders in the POS system so the kitchen clearly understands what the guest wants and there are no mistakes.
• Location of kitchen ingredients, take out supplies and things that cause crossover paths on the line.

The switchover from breakfast to lunch was a little disorganized at a very busy time of the day. Take out orders are problematic, but should be fewer on a Sunday.

The weekends look very good for the future. Next week we begin building our weekday sales through marketing plans we are ready to implement.

Our first $10,000 week is on the horizon. Today we should easily achieve that milestone for a new restaurant in the breakfast and lunch business.

Opening a new restaurant cannot successfully happen without a plan. It can be elaborate or on the back of an old envelope, but you must keep your goals in perspective. There are many ways to open. You can do an advertising blitz and open after long testing and confidence that you have the major issues in meeting your guests expectations procedurally complete.

In the case of Maggie Mae’s on the Bluffs, we chose a very soft approach. Even after we selected a target opening date, it was kept very quiet. We didn’t even tell servers and staff until the day before. The process was:

1. Upon getting our license to operate, we ordered food and supplies. Training for kitchen staff and servers began about four days prior to opening.
2. Two days prior to opening we asked about 15 friends and relatives to come in between 9 AM and 11 AM to order from our menu. The menu was a paper format in a draft form. We wanted the flexibility to change before the official opening. The pre-opening seating pointed out additional needs in inventory, smallwares and training.
3. One day before opening we again invited friends and relatives for a pre-opening run through. The complimentary meals required them to give us honest feedback on every aspect of their experience. This time we told the approximately 25 guests they could come between 9 AM and 11 AM for breakfast or 11 AM and 1 PM for lunch. Experience from the previous day allowed us to have a smooth service at both breakfast and lunch. A meeting at the end of each day allowed staff to discuss weak areas and make corrections. The next day we would flip on the sign and serve during our normal hours of 6:30 AM to 2:30 PM. There was no publicity, advance advertising or anything but word of mouth.
4. On Friday, January 9th, we flipped the sign on and served whoever came in. By the end of the day we discovered many people had been following our construction progress and were waiting to test our new restaurant. The soft opening approach lead to $550 in sales. Enough to gain more confidence in the planning, training and changes we had made to open.

Until today, which will be our fifth day of operations, we have done no advertising, no news releases, announcements or other form of marketing except word of mouth as it spread through the community.

Confident of our growing customer service strength, the second phase of our plan will go into effect. We will:

• Send an email out to 1300 contacts from our email database from the other two restaurants.
• Take flyers to local businesses we have used and encouraged us throughout the construction (seen in the graphic on this post). Hopefully they will place on their counters.
• Start the process of visiting five businesses per day with take out menus and a sample of some item from our menu.
• An ad will be place in two local community papers for publication next week.
• Above all, ask satisfied customers to tell other people about us. Word of mouth is still the strongest form of marketing.

All of the events above will be strung out over the next week. We still don’t want a blast of business that would detract from the food, service or guest experience until staff is fully prepared to handle a volume of business. We may think we are ready for anything now, but we must know we are!

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.