When it comes to the restaurant business, focus on looking at the challenges and taking advantage of opportunities to grow and improve. With a proper shift in mindset and well-implemented changes, success in the restaurant business is attainable.
If you’ve been keeping an eye on the news, the buzz is that many restaurants are tanking quickly. Major chains like TGIFriday’s, Applebee’s and fast food franchises are struggling to maintain relevancy in a constantly-changing marketplace where Millennials fickle tastes can change as often as the season.
While there are many people who love to dine out and enjoy the experience of eating in a restaurant, convenience is also a factor in consumer decision making. Companies like GrubHub, Instacart and Amazon are transforming the way people buy food.
Abraham Zaiderman is the head of a strategic advisory and restaurant business consulting firm based in Potomac, Maryland.
“In spite of some of the challenges faced by major restaurant chains and franchises, people still have to eat somewhere,” says Zaiderman, “and there’s money to be made in the restaurant business.” Here are some recent statistics you need to know now:
- $799 billion restaurant industry sales
- 1 million+ restaurant locations in the United States
- 14.7 million restaurant industry employees
- 1.6 million new restaurant jobs will be created by the year 2027
- The restaurant workforce represents 10% of the overall U.S. workforce
- 9 in 10 restaurant managers who started at entry level
- 8 in 10 restaurant owners started their industry careers in entry-level positions
- 9 in 10 restaurants with fewer than 50 employees
- 7 in 10 restaurants are single-unit operations
Zaiderman’s firm focuses on a few key areas to strengthen and make food businesses more efficient and successful. Some of those areas include the specifics below:
It’s important for a restaurant owner to take a close look at how the day-to-day operations run. Is it efficient? If not, how can you improve? An Italian restaurant might pride itself on serving hand-rolled meatballs. However, if hand-rolled meatballs are taking way too much time to make, it’s more efficient to use a machine. The final product tastes exactly the same, but now a significant amount of time gets freed up. The restauranteur shouldn’t be in the kitchen with the recipes. It’s very important to work on building a scalable business. The lack of delegation is oftentimes the downfall of many businesses.
Promotion can be challenging for anyone, but it’s a hurdle anyone can overcome. First, it’s important to remember that an excellent product can do its own marketing. When people like a particular dish, they’ll tell their friends about it. Word-of-mouth marketing is one of the best types of marketing. Successful companies have been built on word-of-mouth marketing. Take a look at Yelp.com and YouTube.com. Both sites are filled with opinions and word-of-mouth experiences. Focus on reviews. “By cultivating as many positive reviews as you can on a wide range of review sites—especially sites where a business can have greater influence—you can reduce the impact of any negative reviews,” says Todd William, founder and CEO of Reputation Rhino. Many people go to review sites and will purchase a product based on the recommendaitons of someone else. For the best results, it’s wise to strike a balance between offline and online marketing efforts.
A restaurant strategy is a mix of art and science. It’s the balance of knowing when to post content to get the most engagement and how to develop the right hiring process to attract the best employees. While all of these components can benefit from the expertise of an experienced professional, the strategy is also a mix of experience and gut feeling of a visionary owner. Implementing the right strategy is crucial because your strategy must be specifically tailored to what your restaurant needs. The needs of a food truck owner are completely different from the needs of an owner of a five-star restaurant. When you sit down to develop a strategy, these factors must be taken into consideration. A well-planned strategy also considers the vision. What are the goals for growth and sustainability over the next few years? It’s best to articulate a clear vision to know what the goals are. Next, it’s time to get all the data and information to create a realistic strategic plan to hit those business markers and achieve success.
From kitchen equipment to the front register, technology plays a role in how efficient and successful a restaurant can be. In this digital age, technology makes tasks a hundred times faster. People are looking for convenience when they dine. It’s best to figure out ways to make that process easier. Restaurants like Red Robin allow customers to pay for the meal through touchscreens at their tables. They don’t have to wait for a server to bring the check to their table and they can easily leave once they’re finished paying. Look for innovative ways to raise the standard of customer care and make the dining experience memorable. Find ways to make carryout/delivery service available (if it’s not offered) and streamlined for peak efficiency.
When it comes to the restaurant business, focus on looking at the challenges as opportunities to grow and improve. With a shift in mindset and the well-implemented changes, you can have a successful restaurant business – even in this highly competitive industry.