Special Report.
While working with literally hundreds of independent restaurants over the past 25-plus years, one of the most profound things I've learned is that there are very few absolutes in this business. By that I mean there always seem to be exceptions to the conventional wisdom of what it takes to create and then sustain a successful restaurant business.
Loyalty
Customer loyalty programs improve business, report finds. Customer loyalty is a key driver of restaurant business, according to research from National Restaurant Association.
Specialty Report
10 Common Practices of Highly Successful Independent Restaurants
Marketing Success
Operators Reveal How They Grow Sales & Profit In Their Restaurants
While working with literally hundreds of independent restaurants over the past 25-plus years, one of the most profound things I've learned is that there are very few absolutes in this business. By that I mean there always seem to be exceptions to the conventional wisdom of what it takes to create and then sustain a successful restaurant business.
For example, I've seen restaurants thrive with much less than a prime location, no marketing, undercapitalization, using what I would call poor management practices and more. However, particularly in the past five years or so, I've observed definite patterns in what highly successful restaurants and their operators do in the areas of marketing, operations and business management. It's almost as if their operations have a genetic predisposition toward success.
The following is a brief description of those common practices and characteristics. The goal of this article is not to give you a checklist of things you must do to create a thriving restaurant business, but rather provide you with some real-world practices that many operators use to achieve impressive results. We hope this list gets you thinking and moves you to do a few things differently to realize more sales, profit and success.
1. Successful Independents... Work 'ON', Not 'IN' their Business
Almost without exception, highly successful independent restaurants today are owned by people who spend most of their time managing their business versus running the restaurant.
One of the most successful operators I've met lately told me "I don't cook. It's my job to work on the systems." By this statement it's obvious he has a very specific view of his role as the owner and what he should and should not be doing in his restaurant. It's not his job to be working in the restaurant but rather it's his job to create and refine the systems that will enable his employees to create the results he wants.
Without good systems, restaurants are unorganized, produce inconsistent results and the owner functions most of the time as another employee, not an owner. Examples of restaurant systems include the use of checklists for opening, closing and cleaning, written steps for selecting and hiring new employees, using standard recipes in the kitchen and having procedures for handling guest complaints, ordering products and doing a physical inventory.
There are several reasons why systems are so important in a restaurant. First and foremost, systems give you a much better shot at providing consistent dining experiences to your guests. Why do people come back to any restaurant? It's usually because they liked what they had the last time they visited. When they return and either the food or service isn't as good, they notice, and with so many other dining choices available, they often don't return.
Having good systems in place dramatically increases the odds for a restaurant to function the way it should without the owner having to be there working in the restaurant all the time. When owners are free from the day-in, day-out operational duties, they have the time and presence of mind to think and act more strategically and do things that pave the way to move the business to the next level of success.
Strategies of many successful owners include developing new marketing initiatives, creating new lines of business (like catering or delivery) and adapting to constantly changing local market conditions. When owners are totally involved in operations there isn't time for strategic activities, and restaurants tend to stagnate, lose their edge and eventually decline.
2. Successful Independents... Revolve Their Marketing Around a Customer Database
Today, friendly service, good food and a pleasant atmosphere aren't always enough. There's just too much competition. Restaurants nowadays, even ones with outstanding food and service, must actively market their restaurants to be successful. Many highly successful restaurants don't employ traditional advertising to keep their restaurants full. Instead they focus their marketing efforts on the people most likely to pay them a visit, the folks who have already been there.
The first step to employing a customer database is to obtain the names, addresses and other information from existing customers. This can be collected on customer comment cards and through invitations to join a birthday or VIP club. Some restaurants conduct sign-up contests among servers to build their customer databases quickly.
Although many operators use their customer database to promote many different types of events and offers to their guests, a particularly valuable application of this and a good place to begin is with a simple birthday club. According to consumer surveys, birthdays are the No. 1 occasion that people celebrate in restaurants, and many independents have reported that a birthday club is a very effective way to increase sales and profit year-round.
According to numerous threads in our "Discussion Forum," it's common for operators to see response rates of 40 percent to 60 percent on their customer database birthday mailings. Popular offers range from a free dessert or appetizer to a free entrée for the person being honored. Many provide a free dinner up to a certain dollar amount.
One huge advantage of marketing to a customer database is that it's possible to track the relative success of each promotion or marketing activity. For example, it's easy to track responses by calculating redemption rates and even calculating an individual promotion's ROI (return on investment) by accounting for its incremental sales and costs.
Restaurant Startup & Growth Special Report: The 10 Common Practices of Highly Successful Independent Resaurants By Jim Laube To read the entire article go to www.restaurantowner.com your resources to turn your good restaurant into a great business.