Restaurant Archives - GUJRAT INDIA

The Only Way Left for the Little Guy to get Rich in the Restaurant Business

To make money in the restaurant business, restaurant owners have to have a competitive advantage. If hard work alone would do it, most restaurant owners would already be rich.

There are only two real and sustainable competitive advantages anyone can have in the restaurant business.

Restaurant owners can’t have the best chef or the best location or the best menu or the cheapest prices — at least, not for very long. Chef’s can get a better offer, road construction, building projects and population shifts turn great locations into so-so locations. Great recipes can be swiped and even improved upon. And of course, trying to have the lowest prices is not the way to go.

The only two real and lasting competitive advantages any restaurant owner can have are — Innovation and Marketing.

Ray Kroc knew the importance of innovation when he said, “McDonald’s can innovate faster than the competition can copy.

Peter Drucker (the greatest management author and guru of all times) said, “Innovation is the only lasting competitive advantage anyone can ever have in any business.”

e’s right — “Marketing” is just a sub-part of “Innovation.”

Applying unique marketing techniques is a major part of innovation because —

Marketing is the only thing that generates profit for a restaurant. Everything else is an expense.

Marketing (when done right) is the best investment any restaurant owner can ever make. In the stock market or in real estate someone may hope for a 5% or maybe even a 20% return on their investment. But in marketing, a $100 investment in promotion (ads, direct mail, press releases, etc.) could bring in $1,000 in profit and sometimes much more.

For example, changing only a few words in a headline can bring in two to 10 times more profit from the same ad. And the only cost to make the change would be the time it took the restaurant owner to learn how to write headlines. What kind of return on investment is that?

The average restaurant owner thinks his job is to “run his restaurant.” He doesn’t have time to market his restaurant — or even to learn how to market a restaurant. Maybe that’s why he’s average.

A restaurant owner can’t make $100,000 a year doing $10 and hour work. A restaurant owner’s job should be to market, innovate and promote his/her restaurant.

The restaurant marketing plan for many restaurants is based on whatever the latest ad salesperson was promoting. When it comes to marketing, many restaurant owners just copy what the big boys are doing. That could spell disaster for almost any independent restaurant.

Most restaurant owners work long hours, but it doesn’t take long hours to market, innovate and promote a restaurant.

Look at it this way. A restaurant owner who masters innovation and marketing could swap restaurants with any restaurant owner in town. Let him have the location, the menu, the chef and staff and a year from now the restaurant owner who knows how to market and innovate would have the most profitable restaurant.

Learn to stop chasing the so-called competitive advantages that are short-lived and non-sustainable. Concentrate on Innovation and Marketing and watch your restaurant profits skyrocket.

Jerry Minchey, editor

http://www.MarketingYourRestaurant.com

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Permission is hereby granted to reprint this article as long as proper credit is given including a link back to the website shown in the “Author Bio below.

How Restaurant News Can Help Build Your Restaurant Marketing Plan

How often do you check out the latest restaurant news online? Don’t worry if the answer is ‘never’ – if you’re like most people you are probably focusing on your own business all the time instead of looking at what other people are doing.

But here’s the thing – following online restaurant news can actually help you in your own restaurant business as well. When it comes to generating ideas for marketing efforts, it can be difficult to come up with something worthwhile. But by looking at what other people are doing you can create some great ideas to really push your own business forward.

Why do I need a marketing plan in the first place?

A marketing plan helps you to push your business forward. If you don’t market your business to other people, a lot of them won’t even know you’re there. That’s not the best way to conduct your business, I’m sure you’ll agree.

So you have to think about how to pull in more guests. How can you tell more people about your restaurant and what it offers? How can you entice them in to try out your service? A marketing plan will help you with these questions and it will help you build a strong business for the future. This is where restaurant news about other establishments will help.

Okay, so how can I build my own plan through looking at what other people are doing?

The trick is to see what’s going on elsewhere. You can do this easily by looking at the news releases for restaurants online. For example, I read a report recently about a fish restaurant that had introduced brand new dishes that were focused on being healthy and good for the heart. It was tied into a notable date on the calendar, but the dishes were also going to be available all year round.

Another good example came from a famous ice cream brand. They were introducing a new yogurt section to some of their stores. As you can see this is another positive piece of information – remember that positive news should always be your number one aim.

The idea is to use some of these actual events to help formulate your own marketing plans. Think about the kind of restaurant you have and how you might create new dishes, new promotions and various other things you can promote as part of your marketing plan. What would enhance your own offering to the people who might come to try out your restaurant?

So I should keep looking at what other people are doing?

Definitely – not only will it give you ideas about how to create a marketing plan, it will also inspire you to come up with your own promotions and thoughts on how to promote your restaurant business.

You might look for topical angles too by searching for Restaurant News, and that will also make it easier for you to build a successful business that keeps on pulling in new customers.

Two Ways to Make Your Restaurant Start-Up Profitable

No one goes into business just to see it fail, more so if it is a restaurant business. If you have just started up or are planning to start up a restaurant business, you have to get your business plan polished to make sure that your profits will be rolling within a few months after you have opened your establishment.

To make your restaurant a success, you have to make sure that the food you serve tastes great and is made of high-quality ingredients, that the service you provide is impeccable, and that the ambiance of your establishment is warm and inviting. But the formula for a successful dining establishment does not end there. You need to have a good marketing strategy going on for your dining establishment. Also, you need to have a clear idea of how your sales should compare with your expenditures months down the road.

Marketing Your Restaurant Business

No matter how good your dishes are or how superb your brand of service is, you will not make any profit if no one knows about your restaurant. Thus, you need to get the word out that your dining establishment exists, preferably before your opening date.

How do you get the word out about your business? There are many strategies that you can explore to market your establishment, but word-of-mouth is still the best. Word-of-mouth advertising is a classic because many people still would rather believe the word of a friend of a friend. Other strategies you can use include building a website or posting an advert in your local paper.

Regardless of the strategies you use, the important thing is that you get the word out about your dining establishment and that the word should be good. If people are talking about your restaurant, they will go and try you out.

Having a Clear Forecast of Your Restaurant Business

Another thing that you need to do to ensure the profitability of your business is to have a clear sight of how much you are earning per meal you sell. It is suggested that you do your computations per meal instead of adding up your gross monthly sales because unit sales are easier to count. You should have an idea of how much sales you can make based on the number of tables that you have, on the approximate number of customers you can have on a Friday night or at any peak time that your restaurant is full, on the number of drinks and desserts that can go with a meal, and other such factors.

You also need to be concerned with how much you are spending per meal that you serve. Naturally, you would deduct from this amount the fixed costs of running your business, such as employee salaries, rents, power bills, gas bills and other fixed costs. Being constantly aware of such things will help you gain more profitability from your business in the long run.

Of course, these forecasts are never to be considered as iron-clad. A lot of factors that can affect your restaurant business can change, such as the price of ingredients, manpower costs and other such things. It is a good thing to have a solid business plan for your restaurant business, but make it a point to be flexible enough to make room for possible changes.

Restaurant Success Factors – Questions to Ask Yourself Before Opening a Restaurant

When it comes to starting a restaurant, many entrepreneurs jump in and risk their time and startup capital without giving the idea proper consideration. Like other business models, restaurants have a high failure rate and owners quickly realize that being in the restaurant trade is not as glamorous or enjoyable as they first imagined.

That said though, for the right type of people who have done the right preparation, restaurants offer some excellent business opportunities. Many end up thriving and enjoying the lifestyle that goes with owning a business in this industry.

Before deciding to take the plunge and open a restaurant take some time to consider the following restaurant success factors. These are set out as a series of questions to ask yourself to see if you have what it takes to open and manage a restaurant business.

1) Do you Need Experience and Qualifications?

It is still possible for someone with no formal training or experience to open a restaurant and succeed. However, you will increase your chances of success dramatically if you have had some kind of formal training, experience or both. There are numerous culinary schools throughout the United States offering a variety of courses of various durations.

If you are able to get some experience working in a restaurant then this is also a great way to learn about how things are done and to get ideas for running your own business. Start off doing one role and persuade the owner to let you work a variety of roles so that you can understand the whole operation.

2) Do you have General Business Management Skills?

Having good money management skills will be useful when it comes to handling cash and budgeting for expenses. While not absolutely necessary, restaurant owners that understand all the cash flows coming into and flowing out of their business are more likely to feel in control and turn a profit. Doing a course in small business administration or bookkeeping would be extremely useful if you don’t possess these skills already.

3) Do you have Creative Talent?

While you can rely on the creative talents of others, such as chefs and interior decorators it will be helpful if you are a creative person. You can then have considerable input into creating a unique and workable restaurant concept, menu design and dining room decoration among other things.

4) Can you Face Long Working Hours?

Running a restaurant business will require you to spend a good deal of time away from your family if you have one. When your children are home from school in the afternoons and evenings it is likely that you will be working as most restaurant business models follow these hours (unless you focus on breakfasts and lunches). Weekends are the busiest days of the week for most restaurants so it is likely that you won’t see your family much on Saturday and Sunday as well.

5) Do you have Full Support from your Family?

Clearly you have to have the support of your spouse, at least in the early days until you are able to step back and have managers run your operation in a way that allows you to have some time off. And if you will be working with your spouse then you must make sure that your relationship is strong before going into business together.

6) Do you have enough Startup Capital?

You will need to make sure that you have access to the funds required to get your business up and running as well as to cover operating costs in the early stages. You will also require funds for your personal living costs over the first few months of your businesses life while you are getting established and revenues are still low. Unexpected expenses will undoubtedly arise as well so make sure that you don’t get caught short.

7) Are you a People Person?

As a restaurant owner or manager you will have to relate well and communicate effectively with all kinds of people.

With your staff you will have to show strong leadership skills and communicate clearly to them in order to maximize productivity and maintain good relations with them.

Restaurant owners that have strong personalities and get to know many of their guests often become the face of the brand. Sometimes the owner even ends up being part of the attraction that draws customers to dine at specific restaurants. As a restaurant owner you should be prepared to get out on the dining floor and mingle with your patrons whenever possible. Be sure to do it in a way that doesn’t interrupt their dining experience.

With your suppliers, city officials, inspectors and other parties you will also have to have the ability to communicate with them in a way that allows you to get what you want and to build strong relationships.

8) Are you Hard-Working and Organized?

As a self-employed restaurant owner you must be motivated and disciplined if you are to get everything done and achieve your goals. Being organized is the key to managing your time and the time of your employees effectively.

9) Can you Keep Cool in a Crisis?

In the day to day running of your restaurant you will encounter lots of small and large problems, especially in the early days. To keep things running smoothly you must be able to take control in a crisis situation, calm your employees and offer quick, practical solutions that avoid stressing everyone out. As the owner and manager you then have to work on eliminating problems so that they don’t occur again.

There are many assets, personality traits and other attributes that the ideal restaurant owner should have. To some extent these restaurant success factors can be acquired, learnt or developed before you open your doors for business.

While you should always keep financial rewards in mind when you start up in the restaurant trade it is also important to have other reasons for going into this business. If you have a love for people, food and hospitality then there is nothing that you can’t pick up along the way to turn yourself into the perfect restaurant manager.

How Much Does it Cost to Start a Restaurant? – 5 Major Points to Consider

Obviously you have to know how much does it cost to start a restaurant if you want to get into this kind of business. You can calculate the estimates but starting up a restaurant depends on some factors. These factors can also depend on where you choose to open your restaurant.

Restaurant Size – It would cost you an average of $100 per seat if you’re going for a small restaurant that will have around 30 customers. While a bigger setting of around 250 people might spend an average of $300 per seat. Of course the cost would be higher if you want some custom made tables and chairs.

The smaller restaurant might be good with 900 square feet of space and the bigger ones might need around 11,000 square feet to meet their goals. Generally you have to consider 30% of that space is allocated for your kitchen, storage and other needs.

Location – There is a very big difference when it comes to the cost of the lease in different parts of the country. In one area you may be paying $15 per square foot, while in the downtown city you can end up paying $40 per square foot. Many landlords will ask fees for basic maintenance, insurance, land taxes on top of the basic lease cost which can have you spending $5 to $16 more per square foot.

One that’s common in this industry is that the cost of the lease should be about 9% – 11% of the yearly sales. If you think that you would be spending a little more than the average, then you should be very careful because the restaurant business run on small profit margins.

Cuisine – What meals are you going to provide? If you’re planning in opening up a fine dining steak or a seafood house then your meals would be expensive and you’re also going to need an expensive equipment to prepare and store them. On the other hand, you only need some basic equipment if you’re going to setup a small coffee shop.

Equipment – A high temperature charbroiler for beef and pork costs around $2,000 to $5,000. A small scale charbroiler for chicken starts from $1,600, while the cost for a convection oven is $4,000 to $6,500. You can also go for second hand equipment but you have to take a close look if they’re still in good working condition.

Regulatory Permits – Most of the time new owners don’t pay too much attention on the costs of permits and making sure that their restaurant is in accordance with health and safety codes. Getting your health and safety permits can cost you around $790 to $1,900 and this will depend on the needs to improve your restaurant.