Restaurant Promotions: Four Simple Steps To Catapult Your Sales Through Fast Food Lunch Service

There are things you need to give up when the country goes into a recession.

As a restaurant operator, you need to figure out what this thing is for your customers because, believe it or not, it is going to hurt your business. But I’ll save you the trouble and just tell it to you straight. This thing that restaurant customers are going to cut back on is their lunch time.

People no longer have as much time for eating lunch as they once did. Time is money, both for you, the restaurant operator, and your customers.

Now do you get why fast food chains like McDonald’s seem to get by just fine even during these economic downtimes? McDonald’s maintains a knock-out combination of affordability and convenience as its flagship restaurant promotion, making it the restaurant of choice during a recession.

But wait! There’s more!

Fast food chains turning tables quickly during lunch hour doesn’t mean fine dining restaurants can’t do the same. There’s also this growing trend of healthy eating among diners. I have no doubts that restaurants still have the upper hand—that is, if you’re okay with tweaking your restaurant promotions to focus on what customers need at the moment.

Here are some tips that’ll help you implement speed lunch as your new restaurant promotion:

1.    Cut down the menu.
Anything that is complex and superfluous creates unnecessary complications. So cut down the menu and stick to your core offerings, meals that have good margins and easy to prepare.

Take Houlihan’s for example. This establishment requires servers to enter orders within two minutes of taking them, another two minutes to get the prepared meals on the tables as soon as they leave the kitchen. I suggest you develop similar benchmarks in your restaurant.

2.    Leverage POS technology.
Putting up speed lunch as your new restaurant promotion means you are ready to invest in more POS terminals for your restaurant. It should be noted that a POS system is vital to this promo because it increases efficiency of relaying orders from the servers to the kitchen by a long mile.

Already have a POS system in place? Consider adding more terminals. Don’t have one yet? It’s time you think about getting one.

3.    Leverage restaurant equipment.
A POS system is essential, sure, but don’t get me wrong. The kitchen has more to do with the success of a quick meal and service operation than any other aspect of your restaurant.

Make sure your kitchen staff could consistently keep up with your food preparation standards under a given time limit. Cooking equipment like microwaves, broilers and steamers are indispensable in this process. Other equipment like vegetable cutters and food processors should speak for themselves once you have them in the kitchen.

4.    Make sure the staff is ready.
Teamwork is harmony.

You might want to add some extra staff during speed lunch days, especially during the first couple weeks of your new restaurant promotion. Then make some staff evaluations. Put people that work well together, train those that aren’t doing so hot, etc. You know what to do from here.

Chain restaurants like Houlihan’s and Applebee’s seem to have got it down with this simple formula.

Value – time = more customers…

…where “value minus time” means the more value you serve in the shortest amount of time, the more customers you are going to see walk through those doors during lunch hour. It’s a simple and effective concept that definitely warrants its own restaurant promotion.

The Truth About Restaurant Start-Up Costs

I recently read an article that goes like this,

“New restaurant ventures have a notoriously high failure rate, a fact of which financial institutions are well aware.”

This is some scary news alright. So I’ve decided that, for the time being, I’ll be talking about the first critical steps as well as the restaurant start-up costs of opening a new business.

The question: how much do you need to spend in restaurant start-up costs and ongoing expenses?

The answer rides on a lot of things. First and foremost you need to decide, as a future restaurant operator, whether you’re starting from scratch or fixing up an existing restaurant. Both sides have pros and cons.

It depends on how fancy your new place is. I’d say a blank slate should set you back around $130,000 to $330,000, more or less, for things like refrigerators, bar stools, tables, shelving, industrial cooking equipment, etc. Renovating an existing restaurant is much easier, but expect the rent to be higher since the value of the previous business is already baked in.

A reliable POS (point-of-sale) system is also necessary, unless your restaurant is going to run on the pen-to-notebook system. You’ll need it to collect payment and manage the floor and kitchen as well.

The POS will also allow you to accept credit cards. But to obtain the money from American Express or Visa, you must set up an account with a third party service. For example, Heartland Payment Systems. These services act on commission. That’s another 1.8% to 2.5% cut off your profit sales.

Finally don’t forget the small things like printing of the menus, good quality glasses and china, etc. These materials as restaurant start-up items are important too, and shouldn’t be undercapitalized. But even so, always monitor how much you spend on these items.

“People should ask themselves, ‘Do I really need this now to open, or could I wait three months?…”

…says John Vyhnanek, a professor and consultant at the Boston University’s Culinary Arts program.

About the ongoing expenses, the cost of ingredients is the main worm that’s going to slowly gnaw away at your revenue, around 25% to 40% of it. The payroll will take another 20% to 25%, just about. Then minus 8% for the rent. After all that plus taxes, if you end up with 5% of the profit margins, give yourself a good pat on the back. You deserve it for making it this far.

Anyone can see that opening a new restaurant is no walk in the park. I suggest you turn these numbers over and over again in your head and really give it some serious thought. Being a restaurant operator is a passion that requires you, when business is slow, to sometimes shell out your own money even after a few months of operating just to keep things going, hoping for the best, and not just during the restaurant start-up phase.

Learn How To Explode Your Restaurant’s Sales Using Twitter

They say learning is a never-ending process.

For restaurant operators, here’s the opportunity to learn something very important: Twitter might just be the killer application that could turn your restaurant brand into a household name. It’s social, it’s easy, and most importantly, it’s cheap.

Let’s learn something from the success of Naked Pizza.

Naked Pizza is a small pizza joint in New Orleans, described by AdAge as a “healthful” pizza shop. Its co-founder Jeff Leach wanted to build an online following. So he decided to market the brand using Twitter. He created an account, tracked people within a three-mile radius, and then started conversations with folks he felt might be interested in what his store has to offer.

Guess what? The idea clicked. On April 23, 2009, sales from Twitter accounted for 15% of the day’s earning. Not a bad number, if you ask me.

Here are five tips on how to market your restaurant effectively using Twitter:

1.    Track every sale
Build a simple point-of-sale system that will allow you to distinguish the origin of the sale. This way you’ll know if your efforts on Twitter are paying off and by how much.

2.    Twitter isn’t Facebook
Twitter is simpler than MySpace or Facebook, says Greg Sterling, principal of Sterling Market Intelligence. Twitter is also more immediate, more social, than Facebook.

3.    Stir up a conversation
This is self-explanatory, and I have already gone over this a couple times before.

Don’t bombard your followers with product placements, etc. Start a friendly conversation. Then slowly stir the talk towards what you’re trying to sell. The secret is for everything to appear natural.

4.    Sell last-minute inventory
Twitter’s ability to produce last-minute sales is its biggest strength. Zack Steven himself, co-founder of LocalTweeps, caught some discounted tickets at Guthrie Theater simply by founding out about it on Twitter at the last minute.

5.    Alert followers about your plans
Here I’ll be making another reference to KogiBBQ, a rolling Korean taco store that drives around LA, which uses Twitter to alert some 20,000 followers where it’s headed next.

Twitter gives you, the restaurant operator, the power to not just reach out, but also target people within your geographic location.

In many ways restaurant marketing on Twitter is similar to setting something on fire. You gather the materials (your promotions) that would start the flame, making sure they are highly combustible (effective promotions), pile them up together in one location (your target area), drench it in gasoline (start a friendly conversation), and finally flick a lit match onto it. Then step back and enjoy the show.

Four More Tips To Increase Revenue With Proper Food Merchandising

In the last article, we talked about five effective ways to improve sales through proper food merchandising, a restaurant marketing strategy advocated by foodservice specialist Diane Chiasson. But the list doesn’t end there. Here are four more tips from the expert.

1. Use merchandising and cross-merchandising to boost sales
Here’s a good question to get you going. Did you know that food sampling and cross-merchandising increases the average consumer’s transaction by more than 75%? Make sure your products are visible from every possible angle. Pair relevant food items together, such as sandwiches and potato chips and soups together, or cheese and yoghurt and fresh fruits.

Diane says,

Customers often enter an eating area with no clear choice of what they want to eat, so by selling paired add-on items, you stimulate the appetite, increase impulse sales, and boost sales, as well as enhance your diner’s experience.

2. Use signage and point-of-sale materials to reinforce your brand
So you finished designing your display areas. Now you need to create the appropriate POS materials and signage to complement your theme and promotion. Simply put, restaurants with proper merchandising and POS materials have higher sales and perform better overall than those without.

3. Stimulate the customer’s appetite with good lighting
Diane says about good lighting,

Lights are not used to just illuminate a space, but must also be used to focus on food items, displays and merchandising areas, and used to create a specific mood or theme within your space

Anyone will tell you that the eyes have as much to do with stimulating the appetite as the tongue. Which is why lighting is right up there as one of the most essential elements of designing the interiors of a restaurant. More than anything, the food should always dominate the displays in and around the restaurant.

4. Be consistent with branding
The last thing to remember is that you need to be consistent with your branding, and one way to do that is by understanding your brand and the message you want to put out there. Think long term. Refrain from making sudden changes to your messages and brands. If you do this, you might even get the chance to start your own private label line.

These tips should put you in the right path to being a successful restaurant entrepreneur. I’ll end the article with a final quote from Diane,

I really believe that you, as a restaurant operator, can create the opportunity to add or sell something extra to your customers not only in the eating area, but for customers to take home such as homemade specialty desserts, sauces, etc.