Posts Tagged ‘Revenue’

15 Ways to Lower Costs (Not Quality) in Your Restaurant

June 3rd, 2016

Would You Lower Costs If You Could Do It without Sacrificing Quality?

Restaurant owners and managers want need to lower costs. But they don’t want to damage their quality or turn customer off. Sound like an impossible task? As the saying goes, it’s simple but it isn’t easy.

Here’s The Plan of Attack (5 x 3 = 15)

  • 5 Big Expenses
  • 3 Tips to Reduce Each Expense
  • 15 Total Cost Cutting Ideas

We’ll look at 5 of the biggest costs restaurants face. We’ll give you 3 ideas to lower these costs. That’s 15 cost savings ideas you may be able to use in your restaurant.

Your Restaurant Will Live or Die by This Equation

Reducing costs is important because of the following equation:

Net Profit = Revenue – Expenses

Net profit is what you, the restaurateur, get to keep after you pay all your bills. Yay! In general, the higher this number, the healthier your business.

Reducing restaurant costs all reduce to one equation. Revenue minus expenses equals net profit.

Reducing restaurant costs all reduce to one equation. Revenue minus expenses equals net profit.

Of course, there’s always more to the story than the numbers alone reveal. But if your net profit is positive, you can operate your restaurant from a position of strength.

Before we look at way to lower costs, let’s define three terms with help from Investopedia.

Revenue: The total amount of income generated by the sale of goods or services related to the company’s primary operations.

Expenses: The economic costs that a business incurs through its operations to earn revenue.

Net Profit: The amount of income that remains after accounting for all expenses, debts, additional income streams and operating costs.

We won’t be looking at ways to increase your revenue in this article. Although we have written about ways to market your family restaurant before. Our focus in this week’s article: reducing expenses. This is one of the best ways to increase net income.

Before we jump into specifics, here’s a broad overview of a typical restaurant’s expenses. Keep in mind, these percentages vary based on numerous factors. One of the biggest differences is between full-service vs. table-service restaurants.

Typical Restaurant Expenses Pie Chart

Prime Costs and Ways Restaurants Can Lower Them

Prime costs (sometimes called expenses) are the combination of food and labor costs. Since these two costs compose 62–68% of the expenses for a restaurant, we’ll consider them first.

Reducing Food and Beverage Costs

Food costs are one of the biggest expenses most restaurants have. The exact percentage will vary based on the type of restaurant you have, but 33% is a safe place to start.

This means that if your restaurant brings in $10,000 in a week, your food costs will be about $3,300.

Factors effecting food costs:

  • Type: The types of dishes you serve (steaks vs. burgers) will play the biggest role in your food costs.
  • Season and Weather: Ingredients change price every season and according to the weather. A drought in Brazil means higher coffee prices.
  • Quality: Do you buy fresh vegetables every day or are you refrigerating them for a week ahead of time?
  • Order Quantity: How much you buy at a time (small quantities vs. large quantities)
  • Waste: Poorly prepared dishes, accidents, food that dies in the window, incorrect portioning, etc.
  • Spoilage: Food spoils when it isn’t used in time or because it wasn’t stored correctly.
  • Theft: It’s sad but true that your employees will steal from you.
  • Over Pouring: It’s easy to do and easy to not do. Train your bar staff on the right way to pour alcohol.

Types of Food

The kind of food you serve is based on the kind of restaurant you are. If you’re a steakhouse, people expect good steaks. If you’re a breakfast concept, people expect pancakes and eggs.

If you’ve already started a steakhouse? It may be difficult to change it to a burger joint. But if you want to lower your food costs long-term, this may be a viable option.

You should also try to find less expensive vendors for your the ingredients you use all the time. With everything on your plate, this may seem like like a waste of time. But if you find a cheaper vendor for the food items you use every day, you’ll reap the rewards over and over.

Bonus: Don’t just focus on food cost. If a steak costs you twice as much as a burger, but you can sell it for twice as much, you’re coming out ahead.

Quality of Raw Ingredients

Most people have a poor palette. McDonald’s is the number one restaurant in the United States. Enough said. Replacing high-cost, low-margin ingredients with cheaper alternatives, will drastically improve your net profit.

Order Quantities

In general, the more you order, the more you save. If you order a higher quantity, your price per unit will be lower.

But what if you’re a small family restaurant and your order size isn’t big enough to get a price cut?

Work with your vendors to secure a lower price per unit anyway. Commit to buy a larger quantity of food over time. They win because they sell more product to you. You win because you get your food at a lower price point without having to put out a lot of cash upfront.

Bonus: If you keep a lot of food on hand your staff may not be as careful with serving sizes, refills, spillage, etc. Be sure that buying large quantities to save money doesn’t end up costing more than you bargained for.

Reducing Labor Costs

Finding and hiring good workers is the hardest part of the restaurant business. Get it wrong, and there’s not much that will save you. But with the right people in place, you can survive a lot.

A restaurant that’s only 80% there, but with good people, can survive until you figure out the other 20%.

Labor costs are the single largest expense most restaurants have. A large part of your labor costs are dictated by local, state, and federal regulations.

Of course you could chose not to hire anyone, but robot powered restaurants are still a thing of the future.

Bonus: When it comes to labor costs start with your kitchen staff. Servers make just 25–35% of what a back-of-house position does. Getting the right people in place in the kitchen will have the highest impact on your labor costs. The same goes for concerns about:

  • Clocking in and out on time
  • Employees taking each other’s shifts
  • Socializing or other time wasters
  • Getting the right people in place in your kitchen will have a big impact on labor costs.

Schedule Hours Based on Hard Numbers

There’s a balancing act to scheduling employee hours. Look at the hard numbers on your POS and listen to the feedback from servers, managers, and hostesses. Sometimes this information seems like it conflicts.

For example, your servers may say that there aren’t enough people scheduled Friday nights. But when you look at the POS you can see that you’re trending down on Friday nights. Since it’s early October, you know that football season has started. That Beer & Wing joint down the street is probably picking up some of your business. You decide to go with the POS data and keep staffing levels where they are. You may even remove some hours since you know that Friday’s will be slower until Super Bowl.

You don’t want to pay employees for standing around when your restaurant is slow. On the flip side, employees don’t want to keep their schedules open just in case you call them in. They also don’t like getting dropped halfway through a shift. This is sometimes called flexible-staffing or flex-hours.

So keep an eye on your sales data. Base the hours on the numbers. It may be tempting to try to be the nice guy, but it rarely works. Remember, this is a business, not a charity. If your business fails, all your employees, customers, and investors suffer.

Many POS systems look like they were designed in the 80’s. But if you dig around under the hood, you can find features and reports to help reduce labor costs. Don’t feel like doing the digging yourself? Ask one of your tech savvy team members to learn the system and then train you.

Give More Hours to Fewer People (Prerequisite: Hire the Right People)

There’s no denying that many of the folks working in food services are transitory. They’re on their way from one job to another. Food service is just a stop in-between. This isn’t a bad thing per se. But it does make finding experienced and dedicated staff a challenge.

There are a variety of ways to keep good people around, but the bottom line is still the bottom line. The more you pay people, the better odds you have of keeping them.

Guaranteeing more hours to fewer people is one way to make sure your best team members stay with you.

Bonus: This tip is dependent on having the right people on your team. If you’re stricter about who you hire you’ll end up with a better team. A better team means fewer complaints, more satisfied customers, and a more efficient operation.

Will other staff like this arrangement? Actually, they might. You’ll inevitably hire a few folks who just aren’t cut out for the restaurant business. They’ll probably try to give away their shifts because they partied too late the night before. These shifts will gravitate to those who are willing to work the extra hours. But you’ll still want to make sure any shift changes go through you or one of your managers. This will help ensure you don’t end up paying overtime.

Here are some of the benefits to scheduling key team players with more hours:

  • Better Pay: The more hours employees work, the more they make. This includes hourly wages and tips.
    Increased Focus: The more hours they work the less likely they’ll have to work another job. This reduces stress leading to a better work experience overall.
  • Lower Fixed Costs: Fewer employees means lower fixed costs. These expenses include things like uniforms, insurance, and training.
  • More Experienced Staff: The more hours one employee gets the more experienced they’ll become. More experience means better service for your customers. Full-time employees become more experienced faster than part-time employees. So if you can figure out how to maximize your full-time employees you’ll be able to reduce your labor costs.

Be A Stickler for Clocking-In and Clocking-Out

Every industry that uses clocking-in and clocking-out has to deal with the same problems:

  • Employees clocking-in before their shift is supposed to start.
  • Employees clocking-out after their shift is supposed to end.

You need to be a stickler when it comes to clock management.

It’s not that people are trying to be bad (okay some of them might be). And most folks will realize that it’s best to mind the clock. Time is money.

This issue is not unique to the restaurant industry either. There’s entire online industry that match freelancers to employees. To ensure that time that’s billed is actually productive, they use screen recording technology. This also works in the employee’s favor as it guarantees that they get paid for their work.

Employees want to feel well compensated, respected, and praised for their work. Reward good work. Penalize poor work. The good people will stick around and the bad people… well, they’ll figure it out.

Non-Prime Expenses and Ways Restaurants Can Lower Them

All the other expenses in your restaurant are non-prime expenses or costs. This is where will find the next three targets of attack.

Reducing Gas/Energy/Utility Costs

Restaurants use a lot of energy. Here are just a few of the energy intensive aspect of restaurant operation:

  • Heating and AC
  • Cooking (Ovens and Ranges)
  • Cleaning (Dishwashing Equipment)
  • Lighting (Interior and Exterior)
  • Water Heaters

Utilities account for 5% of the typical restaurant’s expenses. It will pay to keep an eye on your numbers from month-to-month. In the summer you’ll spend more on AC. In the winter it’s be heating.

Call Your Utility Providers for Help

Utility companies are in the business of selling energy. The more energy you use the more valuable of a customer you are to them.

Call your utility providers and ask for help.

Ask if they have any promotions or deals going on.

Ask if they’ll do an analysis of your restaurant to look for ways you can save money. They’ll look for things like:

  • Better insulation
  • New caulking around windows and doors (maybe new windows altogether)
  • Better duct work
  • New air filters
  • Energy efficient light bulbs
  • Off-hour pre-heating and pre-cooling

There are companies that will examine your entire building and fine-tune its energy performance. These services can reduce your energy consumption 10–15%. That could make the difference between making a profitable year or not.

The list is long and they’re the experts so give them a call and ask them for help.

Upgrade Your Equipment to More Efficient Models

You get the same magazines we do. They’re full of ads for the latest and greatest appliances. Everything from ranges, ovens, and dishwashers, to deep fryers, refrigeration units, and vent hoods. There’s no end to the new and improved models.

New equipment can be a big investment so you’ll want to do a little math before jumping in with both feet.

Will the lower energy, water, or gas, costs compensate for the price of the new equipment? Will it do so within a reasonable amount of time?

A new walk-in that gives a 5% improvement in efficiency may not pay for itself for many years.

It may be cheaper to put better insulation on the one you’ve already got. Insulation is cheap and can result in the same amount of savings for a fraction of the price.

Train Staff to Reduce Utility Costs

In the summer, my dad told us to close the front door (I’m not paying the air condition the whole neighborhood).

In the winter his lyrics changed (I’m not paying to heat the whole neighborhood). He trained us to turn off lights when we left rooms, and he practiced what he preached.

You can work with your staff to lower utility costs by training them.

For example, when things are slow turn off any appliances you only need during rush. Got two ovens revved up? Turn one off.

If you can, close off unused rooms to avoid heating and cooling more than you have to. Again, train your staff to do the same.

Bonus: Some restaurants use sensors to turn lights on and off in the restrooms. These may save power (good) but they could also lead to a worse customer experience (bad). Nobody wants to fumble around a dark restroom looking for a light switch.

Reducing Insurance Costs

Insurance? Who wants to talk about insurance? Insurance can cost a lot of money. And if you don’t have the right kind you can be paying for insurance you don’t need. Also, the law may require you to have certain types of insurance you don’t think you need.

I worked in the insurance market for over seven years. Insurance plans, pricing, and even whole insurance companies rise and fall every year.

What was a great deal a year or two ago when you first opened your doors may be way behind the times.

Of course government regulations are always changing. Make sure you’re abiding by all the latest rules. There may be exceptions, grandfathered business, and subsidies available for family and small businesses. So don’t give up without a through search.

Shop Your Business Around to Multiple Insurance Agencies

When launching a restaurant calling several insurance agencies may be way down your list. And once you have an insurance plan in place there’s a lot of inertia to just stick with what you have. After all, plans are so complex and you have so many fire to put out.

The insurance field is vicious. It’s dog-eat-dog. And while actual dog fights are illegal, they’re completely legal in the insurance business.

Take notes when you’re talking to an insurance agent. Make sure to ask lots of questions. Don’t be afraid to call back later if you think of a question you didn’t ask. You can even use those notes when you talk to the next agent to remind you of what to ask about.

One insurance salesman will help demystify the sales language of another. One will insist you need Hired and Non-Owned Vehicles Liability Insurance. The next one will point out that you only need that if you make deliveries.

And the list goes on. Taking to multiple insurance agents and shopping your business around can save you a lot of money.

Ask About Paying Annually Rather than Month-To-Month (and Bundling)

There are often fees associated with paying monthly that disappear if you pay annually. These may just be administrative fees. But you might also get a break by paying for everything up front.

You should also ask if they’ll give you buy al your insurance through them. Bundling is a very common practice. And if the salesman is worth his salt he’ll bring it up himself.

Restaurants may need multiple insurance policies:

  • Umbrella Liability Insurance
  • Liquor Liability Insurance
  • Property Insurance
  • Workers’ Compensation Insurance
  • Off-Premises Insurance
  • Business Owner’s Insurance
  • Hired and Non-Owned Vehicles Liability Insurance (if you offer delivery)

Find Out if There Are Changes You Can Make to Reduce Your Liabilities

When an insurance company issues a homeowners policy they send out an agent to assess the risks. They look for increased risks to the home (e.g. branches hanging out over the roof)

If you don’t fix these issues you’ll end up paying a lot more for your insurance. In fact, you may not be able to get a policy at all.

If you’re locked into a contract, call your agent and ask if there are things you can do reduce your costs. A phone call doesn’t cost you anything, but the savings every month will make you smile.

Reducing Rent Costs

Rent is often one of the larger bills a restaurant has to deal with every month. Not paying rent is rarely an option. If you don’t pay you could come to work to find that they’ve changed the locks. Assets may even be seized.

So let’s look at some ways you can lower your rent costs.

Location, Location, Location… Move Your Restaurant

Did you know that McDonald’s sees itself as being in the real estate business? They buy prime, high-traffic, easy-access real estate all over the world. They understand that location can make the difference between failure and success.

Okay, so maybe you’re not McDonald’s and you don’t see yourself as a real estate mogul. But you know just as well as I do that if you’ve got a good location you’ve won half the battle.

If you can change your location to a better one, do it. Yes, your customers may not realize you’ve moved. But are they really the customers who are keeping your business afloat? If they were you wouldn’t be considering moving.

For example, my wife and I moved to get a better price on our housing. I was dreading the work involved in the move. But I also knew that the pain would be temporary but the benefits permanent.

Bonus: If you’re moving anyway you might think about smaller physical spaces or even a food truck. Maybe you don’t think your concept would work for a food truck but just imagine the savings!

Negotiate with Your Landlord

If you extend your lease you may be able to negotiate a better lease.

Your landlord may knock a little off your rent if you make improvements to the space.
The business world is full of opportunities. You just have to be creative enough to come up with them and gutsy enough to try them.

Share Your Location with Other Business or Groups

Sharing your location with another business or group may not always be an option. But with a little creativity there may be a way to share your location with other business or groups.

When I worked at a coffee shop we rented out the shop every weekend to a church. They got a great deal on rent and we got to pay our rent with someone else’s money. In fact, they paid over 25% of our rent monthly to use our location when we weren’t even open. Now that’s a win-win!

For years, restaurants have had private dining rooms and party rooms. Maybe you’re restaurant doesn’t have private rooms like this. You can still take advantage of this tactic by renting out your entire restaurant after hours.

The types of groups interested in your space is probably endless but here are some ideas to get you started:

  • Fraternal Groups
  • Charities
  • Toastmasters
  • Chamber of Commerce Meetings
  • Private Parties, Birthdays, Anniversaries, etc
  • Small Food Businesses Looking for Commercial Kitchen Space (e.g. Caterers, Cooking Schools, and Farmer’s Market vendors)

The demand for commercial kitchen space is not insignificant. In fact, companies are starting up just to fulfill this demand.

Conclusion (TL;DR)

  1. Reduce Food and Beverage Costs: Food costs are on of your prime costs. Some factors affecting food costs are outside your control (like the weather). But many of them you do control. (1) Talk to your vendors about getting a better deal. They may have too many carrots they’ll sell to you cheap. (2) Why buy Filet mignon if your customers are just as happy with ground chuck? (3) Commit to larger order sizes to lock in savings.
  2. Reduce Labor Costs: People are your biggest resource. They’re also the biggest expense for most restaurants. You can lower costs for this category by (1) Scheduling hours based off hard numbers in your POS system. (2) Give more hours to fewer people to help them gain experience. (3) Making sure your team clocks-in and out on time. Start with the kitchen.
  3. Reduce Utility Costs: Utility costs can add up fast in a restaurant. All those high-energy devices can make your meter spin. (1) Call your utility company and ask for help reducing your bill. (2) Do the math on new appliances to see if they’ll pay for themselves by the energy they save. (3) Train your staff to be energy conscious by turning off unused equipment. This includes, lights, ranges, ovens, and dishwashers, etc.
  4. Reduce Insurance Costs: Insurance plans and policies are always shifting. (1) Call your insurance agent and find out if there are new plans that have come out that could save you money. (2) Shop your business around to a variety of insurance agencies. See if they’ll give you a deal to win your business. (3) Ask your agent what you can do to reduce your liability.
  5. Reduce Rent Costs: Rent costs should account for no more than 7% of total sales. (1) It may seem drastic but moving your restaurant can have a significant positive effect on rent. (2) Try negotiating better terms with your landlord. (3) Think about ways you can share your location with other businesses or groups after hours.

What Is the Best Way to Market a Restaurant? (Infographic)

May 24th, 2016

After a long day spent helping customers and working with employees, many restaurant owners are exhausted. They simply don’t have the energy left to think about how to market a restaurant, their restaurant, or prepare a plan to do.

Well, the team at Family Hospitality Group is here to help. We’re hyped up and excited about the opportunities for your restaurant. Once you know how much revenue you could make by using the marketing tips and tricks in this article, you might be even more excited than we are.
Today we’ll look at 3 ways to market a restuarant. Why 3? Why not just look at the one marketing method to rule them all?
I’m glad you asked. Marketing is like dieting. A lot of diets will work, if you work the diet. Don’t wait until you’ve found the perfect one. And so it is with marketing. Pick a tactic that fits your restaurant and target market, and start working on it today.

Three Ways to Market a Restaurant

  • Traditional
  • Guerrilla
  • Digital

We’ll also give you three ideas for each kind of marketing. You can put these into practice in your own restaurant right away.

Traditional Marketing

Traditional doesn’t mean boring.

Mad Men by A&E was a huge success and was anything but boring. The show was set in the 1960’s and was a showcase of classic marketing strategies.

Traditional Marketing Examples

What do Uncle Sam, The U.S. School of Music, and VW have in common?

Some companies still do business like it’s 1960. But for the small family restaurant, this isn’t an option. Your marketing budget is small, and you need to squeeze every penny until it screams.

Examples of Traditional Marketing

  • Signs
  • Slogans
  • Holiday Hijacking
  • Billboards
  • Business Cards
  • Coupons in the Newspaper or Local Circular
  • Punch-Style Incentive Cards
  • Flyers

How to Use Traditional Marketing for Your Family Restaurant

Traditional marketing ideas are alive and well. They may not seem sexy or glitzy, but they’ve survived because they work. You may not be able to do business like Mad Men, but you can still make traditional marketing methods work for you.

Enforce Consistent Design Themes

All of your signage, menus, logos, and graphics should use consistent colors, fonts, and styles. Consistent design themes help you establish a brand. Example: Anything written in the Coca-Cola font will remind you of the brand.

Competition is fierce and reinvention expensive. Every time you reinvent yourself, you’re throwing away your previous marketing efforts.

Make Money: People do more business with folks they trust, and consistency breeds trust. Even if your customers don’t realize it, they’ll trust you more, and reward you with more of their business.

Save Money: Anytime you can reuse established design assets like colors, fonts, and even pictures, you’re saving money. You don’t have to spend money or time (which is just money in another form) coming up with a new design. And if you found something that worked, why change it?

Mail Coupons to Your Customers

Yes, you heard that correctly. Snail mail isn’t back from the dead. It was never dead to begin with.

I get coupons from restaurants in the mail all the time. And I use them! Tens of billions of dollars are spent every year on direct mail marketing. Why? Because it works!

Caution: Be smart about the way you word your coupons. Mistakes can add up fast and really hurt your bottom line in the long run.

Make Money: When a customer comes to your restaurant because of a coupon you mailed them, it’s likely they’ll buy more than just what the coupon advertises. Or they may return another time without a coupon and make a full price purchase.

By gifting them a coupon, you’re valuing the relationship. You’d be surprised how quickly word can spread about a great deal. And as they say, it’s more blessed to give than to receive.

Save Money: Direct mail marketing campaigns can be hyper-local. You can chose to have it sent only to the zip code your restaurant is in. Or you may chose a zip code with the wealthy clientele you’re targeting. This allows you to skip the flashy but overly broad TV commercial or radio ad spot approach.

Invite Your Local Food Critics Over

Keep your friends close and your enemies closer.

Okay that’s not a fair comparison, even if it might feel that way. If you think food critics are your enemy, you’re wrong. In fact, food critics can be your best friend if you’re willing to listen and learn.

Even if you don’t see yourself as the sort of restaurant that has to worry about food critics, you can still learn a lot from their feedback. If they’re good at their job, they can clue you in on what your competition is up to. They can give you an honest review of your chef’s performance, and remind you that the décor needs a little sprucing up.

Now, food critics are generally supposed to review a restaurant’s food anonymously. So you may have to do a little work persuading one to come by.

With the advent of online review sites, everyone has become a food critic, but we’ll come back to that later.

Make Money: Knowledge is power. And in the family restaurant industry, that one gem of an idea (even if it comes from a critic) can make the difference between a ho-hum year and a runaway success.

Save Money: You may think people love the flowers you put on every table. But your food critic can let you know that silk flowers are dated and turn what otherwise would be a good experience into a poor one.

Anecdote: My wife and I visited a restaurant in southeastern Ohio. Their signature dish was called a Camel Back Sandwich. I should have known better, especially after the server (who was a member of the family who owned the restaurant) told us that the dish was invented decades ago. It turned our not to be a sandwich at all. This was warning number two. The name of the dish probably should have been enough to ward me off, but I persisted. It was bland and would have been forgettable if it hadn’t been so bad. I won’t go into detail about the plastic menus that were peeling, the stained drop ceiling tiles, or the hand-off from one staff member to the next (we saw three or four by the time we were seated). Suffice to say, it was a bad experience.

If you’re worried this may be you, you might want to ask that friend (the one who’s super blunt about everything) to come by first and give you their unvarnished opinion. It could hurt. But if it does, that just means it’s working.

Guerrilla Marketing

In 1984, Jay Conrad published a book called, Guerrilla Advertising. Conrad’s idea was to use marketing tactics that were cheap, effective, and creative.

Guerrilla Marketing Examples

Guerrilla marketing if often “sticky” and entertaining.

On the face of it, this isn’t particularly remarkable. After all, who’s going to say, “No thanks. I’d rather have expensive and boring marketing that doesn’t bring in sales.” Nobody, of course.

But Conrad’s point struck home at a time when traditional marketing methods we’re growing stale.

Here are fun examples of guerrilla marketing:

These efforts may seem silly, but you can bet that if Coca-Cola and Oreo are using them it’s because they work.

How to Use Guerrilla Marketing for Your Family Restaurant

Here are three unusual, creative, and cheap ways you can market your business:

Work with Charities

There are thousands of charities and small causes looking for ways to make money. Pizza Hut, Denny’s, and Ruby Tuesday already work with charities to sponsor events in their restaurants.

As the restaurant owner or manager, you supply the location and food. The charities supply the people power. You earn the appreciation of the folks who work for the charities and get to do some good along the way. In addition, the servers who work for the charities will encourage their friends to come in resulting in more business.

This is a tactic you can be active with. Call some of the charities near you, and let them know that you’d love to help them raise money with your restaurant. Even if some of them don’t take you up on the offer, you’ll have built up a lot of good will with them.

Make Money: You’ll make more money because of the good will you’re building up with the charity and the customers who see you more favorably because you’re helping out the charity. One restaurant I know of lets charities give out coupons tied to that charity. When someone uses that coupon the charity gets a percentage of the sale.

Save Money: This is where this tactic really shines. You’ll save money on labor. After all, the charity workers will be providing the labor for free. You’ll also save money on marketing because the charity will be letting their supporters know about their fundraising event for you! They are doing your marketing for you! You’ll also save money because customers will be more forgiving about mistakes because it’s all for a good cause.

Do the Unexpected

We’ve all seen the sign-spinners and people dressed up like mascots hawking everything from pedicures to tax preparation services. These ideas worked better when everyone wasn’t doing them, but they’re still rare enough that you might consider them.

I used to work at a coffee shop. One day while trying to think of ways to market the business, we came up with the idea of the $100 iced-coffee drink. No one’s ever heard of a $100 drink at a coffee shop.

We had the advantage of being a non-profit ministry, so we might have actually sold a few of these things. But guess what. Even if we hadn’t, just being able to advertise ourselves as the home of the hundred-dollar frap would be enough.

Make Money: One of the advantages of thinking like a “guerrilla” is that it forces you to reject the normal way of doing things and focus on something new. Doing the unusual or unexpected has a way of getting folks talking about you. Remember the first time you saw a sign-spinner? You probably told a few folks about it. Your restaurant can be what folks are talking about next if you come up with a creative way to advertise it.

Save Money: Just like the $100 iced-coffee concept, your idea doesn’t actually have to cost anything (other than the time it takes you to come up with it). And if you can get folks talking about you and spending money at your restaurant without spending your marketing budget, those dollars go straight to your bottom line.

Learn to Day-Trade Attention

Gary Vaynerchuk is arguably the leading voice in marketing and customer service as of 2016. Recently, he’s been talking a lot about how marketing is just a matter of “day trading attention.”

Attention is one of the most valuable commodities a person has. It’s limited and can only be spent on one thing at a time. In fact, much of marketing is based on the idea that before you can do anything else, you have to get someone’s attention.

So how do you get someone’s attention? You don’t. You go where their attention already is. If your target customer base gets their restaurant recommendations from the newspaper, be in the newspaper. If they’re online, you have to be online. If they’re retired, you have to be in the retirement communities, Foreign Legions, and nursing homes.

Why fight for their attention when you can get it just be being where they already are?

Digital Marketing

Digital marketing isn’t the wave of the future. It’s the tidal wave of the future. But to take advantage of it, your boat has to be in the water. Yes, that was me trying to be pithy.

Digital Marketing Examples

Digital marketing doesn’t mean it all happens on a computer. For example, the ALS Ice Bucket Challenge.

Examples of Digital Marketing:

  • Website
  • Social Media (Twitter, Facebook, YouTube, SnapChat, Instagram, etc)
  • Digital Coupons
  • Review Sites
  • Email
  • Blogging

I’m going to share with you the three digital marketing ideas I’ve personally found to be the most effective.

How to Use Digital Marketing for Your Family Restaurant

Email

Email marketing has the highest ROI of any digital marketing methods. According to MarketingSherpa.com, the ROI for email is 2X higher than cold calling, networking, or trade shows.

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Now maybe you aren’t comfortable with emailing your customers. Or you hate spam and don’t want to annoy your customers. Perfect! You’re just the kind of person who should be using email. Keep that fear healthy. It will keep you from sounding “salesy” when you write.

Aside: The opposite of spam is… ham. Who knew?

A client I did marketing work for maintained a very small list of under 1,000 email contacts. They had a small website and no physical location. And they did over $100,000 a year in sales. And the company consisted of two (that’s right, just two) part-timers. I was one of them.

There are a lot of email services out there. Start with something simple like ConvertKit.com or MailcChimp.com. These services are very user friendly and very responsive to customers.

Make Money: Let’s say you had an email list of 500 customers. You could email all of them and say something as cheesy as, “Hey we miss you. We haven’t seen you in a while and were wondering if it was something we said? Please come see us soon. We’ll keep a table open for you.”

It’ll take you maybe 15 minutes to send. Think you’ll get some smiles out of it. I bet people will mention it to their friends.

Chipotle did something interesting enough, it’s worth repeating. I told my wife about their fine print. Yep, the fine print was memorable. It told me to “stop reading the fine-print and go get something to eat.” An email like this will get folks to give you their business. I bet you won’t complain about that.

Save Money: Thinking about snail-mailing your customers a coupon? Why not email it instead? It’ll be way cheaper, it’ll probably show up right on their smartphone You can even track how many of them open the email and click on the coupon (your email service provider should provide you with these details). How cool is that? Just keep in mind the warning we gave earlier about being careful about the way you word your coupons.

Social Media

Who can keep up with all the social media networks these days? It seems like there’s a new one coming out every five minutes (ever heard of WooWoo?).

The tried and true social media sites like Facebook, Twitter, and YouTube aren’t going anywhere anytime soon.

Sites like Facebook allow marketers (that’s you and me) to cater our advertising to potential customers using very specific criteria. For example, you can create an ad for your family restaurant that is only shown to users who have kids and who list “Denny’s” as one of their favorites. Or if you’re an IHOP franchise owner, targeting your ad to someone who already likes restaurants that serve breakfast is an obvious choice.

Make Money: Wouldn’t you love to get your message in front of your ideal customer? This isn’t a pipe dream anymore. With Facebook ads, it’s possible to identify your audience by location, employment, buying habits, and interests. It’s pretty obvious that by targeting your ideal customers with a compelling offer, you’ll be able to make more money.

Save Money: Facebook allows you to run several ads side-by-side. It will even tell you which ad is performing the best. You can then turn off the lower performing ad and leave the best performer running. This saves you money, and the results can be traced in ways direct mail and TV commercial can’t.

Blogging

Blogging is huge. It’s also a longer term play than some of the other tactics we’ve talked about but the payoff is huge. Like, Donald Trump huge. I know what you’re thinking. “But what do I write about?” Write about what your customers are going to find interesting. What will they find interesting? Well, if they like your restaurant, you can write about your restaurant. You can also use services like BuzzSumo to generate ideas.

Here are some ideas you can write about on your restaurant’s blog:

  • Your latest dish
  • Upcoming holiday specials
  • Photos you or your customers took and posted on social media
  • The latest food craze (e.g. raw food, organic food, etc.)
  • How you helped a parent with an energetic child enjoy their meal
  • The last community event you participated in
  • How to prepare Chicken safely (make sure to include a disclaimer)

Once you get the ideas flowing, you’ll find that they come pretty easily.

Make Money: Blogging is a way your customers get to know who you are. You can add value to their life and build your brand all at the same time. You can become the restaurant that provides great food and service and also makes meal time at home more enjoyable because you share food prep tips. When people are Googling, Binging, and Yahoo-ing (do people still use Yahoo?) you want to be the one they find. You want to be the one they come to trust.

Save Money: Blogging is a one-to-many proposition. Think about it like this, if you were able to have a great conversation with a customer in your restaurant, would you do it? Of course. But you can only do that one customer at a time. But if you can multiply your time, energy, and attention by blogging, why wouldn’t you?

Conclusion

Pick one of the ideas in the article, and give it a try.

Just pick one. If it doesn’t work for you, you’ve learned one thing you don’t have to worry about anymore.

But what if it works?

What if you can boost sales 5% by sharing daily pictures from your restaurant on Twitter or Instagram and another 5% by blogging once a week? What if your local food critic gives you a rave review and your business from travelers skyrockets because you’re top of the list on food review sites? What if you increase employee retention because you’re not just their boss, you’re also helping their favorite charity?

Even if it takes you a week or a month (or two) to get comfortable with it, imagine the value these ideas could add to your bottom line.

Time will pass either way. You might as well be improving your restaurant.

Three Ways to Market a Restaurant: Traditional, Guerrilla, and Digital

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