5 Tips to Help Your Restaurant Weather a Recession
This is a guest article written by Susie Brown, a FastUpFront blog contributor and business author. FastUpFront offers a restaurant loan/financing alternative to business loans. You can learn more about them here.
Your average restaurant owner hears the word recession and shudders. After all, if the economy declines people have less money and tighten their budgets, which means cutting out ‘unnecessary’ expenses – like eating out. You can let your fear lead you to the dark kitchen of, ‘can’t get people to spend if they don’t have the money to spend with,’ or you can see it as an opportunity and get cooking. As my Grandma used to say, “Ask not for a lighter burden, but for broader shoulders.”
1. Know Your Strengths
While you’re struggling to keep the balance between sales and cost, there are a few changes that can help you weather tough times. There are promotional tools and menu changes you can make to attract new diners and keep loyal customers. While it’s always important to appeal to their taste buds, you need to put yourself in your clients’ shoes. What about your restaurant will make them chose to leave home, select your establishment, pay for and enjoy their dining experience?
2. Make Some Menu Adjustments
Menus that appeal to budget-conscious diners may be enough of a change to keep business moving. If there are items that are rarely ordered, replace them. King crabs may need to be dropped from the menu and replaced by something from the fresh, local catch. This will appeal to a diner’s wallet and advertising the dish as “fresh and local” will let your clientele know you’re supporting other small business owners and the community. This holds true for senior and military discounts and sponsoring a local little league. Make sure you proudly display these facts. Diners are people and letting them know that you are doing your part to help support the local community gives an additional value to what is already a great place to dine.
3. Value-based Promotions
Promotional ideas need to be value-based versus gimmick oriented. All you can eat specials, free side orders, refills or kids’ meals are a great place to start. You can consider separating menu items and pricing them for affordability. Two for one specials are always popular but if it doesn’t fit your image, try for every two entrées ordered dessert is, “compliments of the chef.”
It may be tempting to cut your advertising budget – don’t, just rethink it. Menu flyers or a take-out menu are affordable ways to get the word out about your restaurant. Put them at local hotels, chambers of commerce, popular tourist areas and other local businesses. You may even consider a co-marketing campaign with a local business. Stay at the local inn for two nights or more and get a 10% discount at your restaurant. Is there a local festival coming up? Use it! Talk to the organizers of the Rock County Pork Fest. Becoming a sponsor can get you on the back of the ticket, which can also be used as a coupon at your restaurant (which during the fest is, of course, featuring a locally grown pork chop special). Cranberry Daze every fall? Make sure you get a local vendor and get cooking. If these don’t appeal to you consider live music or display works by local artists/photographers.
4. Simple Cost-Saving Steps
In addition to innovation and creativity, there are some very real cost saving steps you can take. If there is a night of the week that is typically slow, consider scheduling less servers and letting your manager fill in for the bartender or host. Just be careful not to do anything that would reduce your customer service, which is the bread and butter that sets you apart.
There are also several small changes you may not have thought of that can add up to real savings. Take a look at your menu to make certain you have calculated food cost correctly. In general, food cost should be around 30-35%. For example, if you pay $1.00 for something, you need to charge at least $3.34. Also revisit portion control, but err on the side of too much.
Energy efficient light bulbs and keeping lights off when you don’t need them are both fiscally wise. If you don’t start serving until a certain time, keep the lights in the dining area off. Consider replacing older equipment with energy efficient models (many come with tax credits and other incentives). Turn down the thermostat a bit; 68 is just as comfortable as 72 in winter and vice versa in summer. Install low flow faucets and toilets, soak your dishes instead of rinsing food off and only run the dishwasher when full. If you use plastic or other disposables, consider replacing them with china, glass or silver – good for the environment as well as the budget.
5. Keep the Focus on Great Service
According to the National Restaurant Association, the first step to opening a restaurant that offers great customer service is hiring people who love to serve and training them with examples of great customer service. Above and beyond the servers, your staff should understand they are a team. Think of a Broadway musical; the leads may get the applause but the show would never happen without the combined effort of musicians, stage techs, lighting, costume, make-up, etc. The choreography isn’t just onstage during musical numbers, but behind the scenes as well. This is true in your restaurant as well and as Director it is your place to let your staff know this. Your servers may be your leads but they rely on a support staff of bus boys, cooks, dishwashers, etc. to deliver the show and take a bow, so to speak.
Changing economic times can be nerve-wracking for small business owners, but they are also an important time to remember that small businesses are the nation’s best job creators and help the economy recover. So take a deep breath, make some adjustments and be ready for a curtain call. It could come at any moment.
Photo from St. Louis Magazine