Hunker Down or Market Your Restaurant – Surviving a Recession
In 1981 the interest rates on home loans ballooned to 15 to 18%. Savings and loans were going under and it was common for an apparent healthy financial stalwart of the community to suddenly announce they had been acquired or in some cases, were closing their doors. Virtually every home sold, if any, was financed by the sellers. It wasn’t a matter of tight credit; it was a matter of credit that people could not afford. You could qualify for a loan, but the payments were so high, you couldn’t buy anything you wanted to live in.
Here we are, almost thirty years later with economic conditions that mirror our history. The conditions may be slightly different, but the bottom line is that people lost jobs, restaurants closed, the housing industry crashed and people stayed home more. They ate out less, spent fewer dollars and changed their habits.
As a restaurateur you have some choices. You can hunker down, layoff people, cut every possible cost, increase prices with inflation, change your menu to higher margin items and weather the economic storm – if you can.
There is an alternative. People don’t quit eating out. They choose less extravagant food. A restaurant visit becomes a form of entertainment as well as a meal. Even well healed big spenders go into a conservative mind set as supposed pillars of the financial world crash around them. For some restaurant owners it becomes a time of opportunity.
Now is a time to build market share. You may not be able to achieve the profitability or sales level of recent previous years, but you can build a base of clients that will see your business flourish quicker when conditions start to improve. Your regular customers won’t totally abandon you, just visit fewer times and spend less money. The challenge is to build more regular customers.
In The Restaurant Ebook, we give you over 100 ways to market your restaurant that work in good and bad times. Many, if not most, cost very little to do.
Here are a few ideas to get you started:
- You and your staff have more time. Use it to develop clients by sampling. Pick five businesses per day. Deliver an appetizer or sampler platter of food to the five chosen for the day. Take menus, contact information and weekly events at your restaurant.
- Partner with the cleaners, hardware store, car wash, gift shop, clothing store or other businesses around your restaurant. Exchange coupons or special offers with them. They too are looking for ways to build their business.
- Building customers is more than just serving food. Now is the time to get your staff involved. Teach them about establishing rapport with your guests. A little friendlier, more attentive, and genuine interest in the customer. Conversation is key and entertaining by bright cheerful smiles, more detail about your food, and options for less costly, but budget pleasing alternatives.
- Think margins. For instance, in one of my restaurants I know our biggest profit center is the bar business. We implemented a bar snack program that included things like Twin Blue Cheese Sliders and Chips for $5. They keep patrons around a little longer and keep patrons from have a couple of cocktails and stopping at McDonalds on the way home.
- Existing customers are your best source of new business. As they leave, give them a coupon for a free appetizer when they bring a new guest back with them on their next visit. Your guests know it’s slow, they are happy to help you develop business.
If you haven’t had to market your restaurant in the past or don’t know how or where to start, invest a few dollars learning more about marketing and running a successful restaurant in good times and bad. I personally offer a money back guarantee on The Restaurant Ebook. It will teach you how to build a marketing plan, think margins and profits, train employees and get you embedded in the community. Don’t forget those 100 ways to market your business like those above.
Larry Edger
Author and Restaurateur
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