Growing a restaurant on a tight budget in a tough economy is a challenging business. Margins are tight; plain and simple.
There's a good chance you may be left scratching your head wondering how you can grow your restaurant without making a significant dent to your bank account. It can be done, it just starts with a smart mindset.
Thinking smart and being smart are important when it comes to growing your restaurant during financial difficulties. Every dollar spent on growth, in particular, should be spent with a SMART mindset.
Using the SMART theory will help your restaurant continue to grow, all you have to do is spell it out: Specific, Measurable, Attainable, Realistic, and Timely. Below are a variety of SMART methods to prepare your restaurant for growth all with minimal spending.
What can you do within the four walls of your restaurant first, to position yourself for growth?
To create positive emotions and deliver on your promise for memorable customer experiences, you must think through the concepts of processes, maximizing communication, and creating surprises through a multitude of ‘touch points’.
This includes maximizing on:
A smooth operating restaurant requires fluent communication from and between not only the entire team but also the customer. How are these everyday touch points affecting your customer emotions?
For example, walk through the process of placing a phone call, placing an online order, making a reservation, or leaving a comment on social media. Are there areas you can improve to deliver a quick, positive emotion while completing these tasks?
There should also be a strong communication strategy in-house. As soon as a customer walks into your restaurant your in-house communication needs to be on point.
Your in-house communication strategy should include:
Once all of these in-house touch points are in place, you will have positioned your restaurant for effective word-of-mouth opportunities, the most cost-effective means of growth.
Word-of-mouth only goes so far and shouldn’t be solely relied upon. It should be a part of an overall strategy that pairs with a multitude of other cost-effective community driven ‘programs’.
Here are a few to get you started:
How much do all of the above efforts truly cost you each month? You will notice none of the above mentioned use heavy discounts or coupons to grow your restaurant on a tight budget, which is often the ‘go-to’ strategy for restaurants.
Test all of your touch points through implementing a monthly or quarterly secret shopper program to receive unbiased reviews while holding your entire team accountable. By creating positive emotions through design, systems, communication, and training, you will undoubtedly increase spending and return visits, which is, of course, your end goal for growth!
By strategically monitoring and controlling your core (primary) costs, you should be positioning yourself to have an ongoing budget in place for growth (marketing and advertising), which should be an average of 3%-5% each month.
To some independent restaurants, there may not be a lot of funding available each month, but there are ways to maximize the potential for growth with minimal funding availability.
You don’t have to be an accountant to monitor and control costs or to determine your monthly growth budget, but you do need to understand how to track your revenue and expenses and be able to determine which growth-focused activities are profitable and which ones aren’t.
You also need to be able to forecast your cash flow. Unexpected events and expenses may arrive without much notice within your restaurant. Without sufficient capital, you can look successful to the outside world and still go out of business.
The more you know about your restaurant, the more control you’ll have. In summary, when it comes to growing your restaurant, don't spend a single dollar without thinking about how that dollar is going to protect your cash-flow.
As the Founder & President of KRG Hospitality Inc. in addition to being the author of the book ‘Bar Hacks’, Doug Radkey’s impressive career spans more than two decades and includes all aspects of food, beverage, and hospitality development. This storied brand has proven success since 2009, throughout a variety of markets found within Canada, The United States, and abroad by being a creative agency with a focus on planning, development, and support for independent restaurants, bars, hotels, and other hospitality related properties. |
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