How do I turn this restaurant around?

Dear Ken Keller,

I’ve owned a restaurant for a long time. I thought things would get easier, but the business is getting more difficult.

Summer is the worst. Once school lets out, everyone heads out for vacation, and they don’t come back until August.

The city is also approving more restaurants; many of these are franchises or chains. The city needs the tax revenue. When a new place opens, people flock to it until the “newness” wears off and then folks drift back to us.

Due to the drought, the cost of the food we buy has gone through the roof. I don’t expect those prices to drop anytime soon.

I am feeling pressured by all of these arrows being slung at me by forces out of my control.

I’ve always loved this business and I hate that it has come down to a constant struggle.

My wife is tired of my complaining. What do you recommend?

Doug A.


Answer

Dear Doug;

The first place to start is in your own mind. You must be able to separate what you can control from what you can’t control. Your attitude, altitude and approach is something that only you can alter but only if you chose. The question is: do you really want to quit complaining or has it become your default position?

I am assuming you have a desire to change because you wrote me. Let me address how you “go to war” to get people to visit and spend money at your restaurant.

You start by deciding who is your ideal customer and learning why they choose to be your guess.

Find people who fit your description and ask them to come over to your place and give you their candid opinion of your “offering.” You don’t need to hear “everything is great.” You need to hear the unvarnished truth.

You might need new signage, a thorough top to bottom cleaning, fresh paint, windows washed, bathrooms spiffed up, menu revamping, cooking lessons, staff training; maybe all of the above and more.

This input is given for improvement; don’t push back, take it and start working on implementing the changes.

Start visiting other restaurants that are doing the kind of volume you want. Take notes, ask questions; go at different times of the day and different days of the week. Analyze what works and what doesn’t and what you can apply.

Pay careful attention to food preparation and how it is displayed and to the wait staff. This is where the war is won for the customer dollar in the restaurant business.

You need to be able to create a system to change your prices frequently. Start negotiating with suppliers, find new ones if necessary and trim your menu of seldom sold items, unprofitable items or those that take too long to prepare.

I would increase prices on beverages immediately. Someone paying $8 for a glass of wine is not likely to balk at paying an extra dollar. Coffee and tea are literally gold mines for restaurants.

Analyze day parts when you do the most business and close early or open later when it makes economic sense to do so. If no one comes in after 8pm, why stay open until 10pm?

Near the top of your list should be the gathering of email addresses and other client information (birthdays, anniversaries; frequently ordered items) that you can use to entice visits.

You should have some type of customer loyalty program to increase frequency of customer visits. You can learn about those from visits to your competition.

I would recommend you also take the time to visit the Small Business Administration website. One of the best programs they offer is free advice from consultants at the Small Business Development Centers and through SCORE (Senior Core of Retired Executives).


Ken Keller is a syndicated business columnist focused on the leadership needs of small and midsize closely held companies. Contact him at KenKeller@SBCglobal.net. Keller’s column reflects his own views and not necessarily those of this media outlet.

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