Category: It’s All About Service

More of: The Top Line Drives the Bottom Line

The hardest task for any restaurateur is convincing a potential customer to walk through the front door for the first time. This takes considerable effort in the form of image building, identifying target markets, use of social media, advertising, building an effective website, selecting the right physical location, etc. Convincing a customer to make that leap means that they are willing to take a risk, sit down and spend some money. After all of that effort how much time do you spend on convincing customers to buy and set the stage for a return visit?

Keep in mind that your service staff are your ambassadors and sales force. Have you taken the time to train them how to sell and have you provided them with the tools that they need to be effective in that role? Your job is not to simply make a sale, it is to build a relationship that will result in steadily increasing sales, check averages and return guests. Your service staff holds your future in their hands.

That initial customer visit will likely result in “safe” purchases until your operation is able to demonstrate trustworthiness. The server is the portal for information, the front-line expert on your menu, the friend who can make great suggestions, the connection to others in the restaurant and the gatekeeper to your profitability.

Yes, the top line drives the bottom line and the server’s primary job is to sell, however, to accomplish this they must be able to provide exceptional value for the guest. Does you service staff known the menu, the ingredients, the source of those ingredients, the methods of preparation and the flavor profile of every item on the menu? Does your service staff have a working knowledge of wine and can they make great pairing suggestions for the novice wine consumer? Is your service staff comfortable communicating with the chef about special requests and can they offer those to a guest with confidence that the property can deliver? Is your service staff willing and able to sell the bookends: appetizers and desserts? If not, the fault lies with management and ownership.

The average restaurant in America spends less than 1% of its budget on training, yet it is training that will result in greater sales, higher check averages and return guests. The top line does not happen simply because your marketing efforts have led customers to walk through the door.

Are the tools in place to allow servers to up-sell with confidence? Is the dining room comfortable, is the menu attractive and user friendly, is the wine list understandable, do you offer on-going training to keep staff informed about the menu, do you require daily pre-meal information sessions, do you have a sommelier or a manager with a strong understanding of wine and the ability to build a list that works well with food, do you have the right glassware and china to complement the wine and food, do you take advantage of customer profile systems such as Open Table so that your server can track the preferences of return guests? The answer to each of these should be YES.

The top line drives the bottom line, but the process of setting the stage is the only thing that will allow this to become a reality.

Watch for information on “Deep Dive” Seminars by Harvest America Ventures coming to a city near you. Learn about the opportunities and pitfalls associated with restaurant operation.

Visit our website at: http://www.harvestamericaventures.com

The Odds are Against Them, Yet People Continue to Open Restaurants

There are more than 965,000 free-standing restaurants in the United States. That does not include Business and Industry foodservice, Schools, Hospitals, or home-meal replacement from your local grocery store deli-counter.

Most data points to a 66% failure rate for free-standing restaurants in their first year of operation and 90% failure rate for those who manage to make it to year five.

What is most ironic is that despite these figures the number of restaurants continue to grow each and every year. When one restaurant closes, another is ready and willing to take its place.

Let’s take a moment to unscientifically evaluate why this is so:
WHY DO PEOPLE OPEN RESTAURANTS?

1. Chefs open their own restaurants (usually with another persons’ money) because it is their dream to show the world what they can do. The restaurant, to them, is a canvas waiting for the artist to paint.
2. Restaurant managers open restaurants because they believe that they have the formula for success that no one else has discovered.
3. So called – smart business people who have made their mark in other industries, open their own restaurant because: “how hard can it be”? this must be a quick and easy way to get rich – look at what they charge!
4. Family members open another restaurant because dad had his own and he was successful! It must be in their genetic make-up.
5. Some people open restaurants because they like to eat out and they really “know” food.
6. Some open restaurants because it would be great to have a place where their friends could come and have a terrific meal. (be careful of “friends” who expect something for free)
7. Some open restaurants so that they can have their own personal bar.

…and the list goes on. What many don’t realize is how hard, demanding, unpredictable and fragile this business is. To that end, here is a primer for all would be restaurateurs:

RESTAURANT REALITY:
1. Location is still everything. Make sure you are visible, close to lots of foot and vehicular traffic and flush with parking spaces.
2. You will be in the service business which means that YES – the customer is right.
3. The top line drives the bottom line. SALES, SALES, SALES.
4. Quality, interesting and flavorful food is an expectation. It is the price of admission.
5. Be aware of what is trending: local, sustainable, nutritious, healthy and fresh.
6. Value is more important that price.
7. At best, restaurants can expect to make 5% profit. That is only possible if you minimize waste, theft and spoilage and continually attract enough guests.
8. Rent will kill you! A good rule of thumb is that your annual rent should not exceed 6% of gross sales and total occupancy costs should not exceed 10%.
9. Food spoils!
10. People steal! (customers and employees)
11. Free drinks will put you out of business.
12. Family members should pay for their food and drinks like everyone else.
13. Taxes must be paid on time.
14. Dining rooms generate sales and kitchens incur cost. Make your dining rooms larger than your kitchen.
15. Chefs are frustrated artists, but unlike many famous artists you want to sell product while you are still alive. Menus should reflect what people will buy.
16. Cash flow is king. Make sure it is coming in faster than it is going out.
17. Cash may be out of style but remember it costs you money for the privilege of accepting credit cards. You must accept credit, but smile when they pay you in cash.
18. Pick your vendors wisely – they are the basis for great tasting food and can even be viewed as a bank that gives you 30 plus days to pay back the loan of supplies.
19. Guests come initially for the food but return because of your service. Select employees well, train them constantly, treat them well, support them, measure their performance and reward them when you can.

…once again, the list goes on. Do you still want to own a restaurant? If so, let Harvest America Ventures help you to minimize many of those factors that lead to failure. Contact us today!
Harvest America Ventures, LLC
Restaurant Consulting and Training
http://www.harvestamericaventures.com
psorgule@hotmail.com

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