7 Proven Ideas to Recession-Proof Your Restaurant

by Wayne Liew

in Business Building

Since I introduced Wayne Liew Dot Com Newsletter to offer business building consultancy on this blog, I received a few requests for free consultation on a variety of entrepreneurship and business operation aspects.

Last week, a restaurant owner came to me, citing the troubles that his business is experiencing due to the tough economic conditions. No surprises because even Valentine’s Day is less sweet for restaurant owners. I provided him with a few ideas on how to attract the attention of prospects and how to retain current customers.

Restaurant

This is not merely a recession-proof your restaurant blog post. I really hope that entrepreneurs and small business owners can modify the following ideas and recession-proof your business today.


Specialized Menu and Target Market

Targeted customer base promises higher rate of return visits. By focusing, prospects tend to tag your restaurant to a particular style of cooking and will recommend your restaurant if their friends crave the type of food that you offer.

Rebrand your restaurant as the best Indian food restaurant in town or the best restaurant offering traditional Italian cuisine rather than the average restaurant that offers a wide variety of average food.

Take cuisines that are unrelated to your theme off the menu. Instead of targeting the mass community, find food evangelists, experts or people that crave the type of food that you offer the most. Know where they normally hang out and aim your marketing towards them. These people are the most likely to spread the words out about your restaurant if they like the food.

Home Delivery

Customers are warning restaurant owners that they will stop eating out due to the economy. Restaurant owners start worrying and think that this will be the end of their business. Wait, if eating out everyday or every week was already a habit for these families, do you think it is easy for them to make that change?

Of course not! Smokers can’t quit smoking in one day unless a sheer amount of determination exists. If your customers are trying to change their habits, “help” them. By offering home deliveries, you are actually promoting them into a trance of not eating out and you get to keep the revenue. :mrgreen:

Get a second-hand bike and one of your staffs to do the delivery. Broadcast to your customers that they can save more time (rounding your restaurant searching for parking lots) and money (fuel) by trying out your delivery service. Do make sure that your delivery is prompt, the food is fresh and the delivery charge is affordable.

Price Discounts

Discounts can be placed on all the food you offer or just the selected dishes. You could also do a weekly, monthly or even an hourly promotion for different types of food. Other than pulling the customers in, you also have the opportunity of showcasing other items on your menu to your customers as well.

You don’t need to make your food dirt cheap in order to attract customers. In fact, if you run a gourmet restaurant, customers may perceive the quality your food as substandard.

Place the promotional sessions during non-peak hours or days. Offer higher discounts on food that are low in demand. Food is perishable and rental will be counted even if your restaurant is empty so why not fill the seats and lower the amount of losses using price discounts?

Coupon Giveaways

Tough economic situations prompt consumers to search for deals, coupons and discount codes. A restaurant can give away coupons to generate buzz. Coupons can also direct potential new customers to your restaurant because people pass them around.

You don’t need to publicized the fact that you are giving away free coupons. Enclose one or two together with the receipt after your customers made their payment. This will not only surprise them and make them feel good, you are actually increasing the chance of them becoming a return customer.

Social Media Participation

As an active social media user myself, I cannot stress enough the importance of getting your restaurant an online social media presence. Yelp is a social media site that every restaurant owners must participate in. Food lovers and web users looking for restaurants often visit Yelp for restaurant reviews.

Learn what customers are looking for and what they are unhappy about by reading through the reviews, both positive and negative, that other restaurants get. Also, interaction with your customers are made easier with the help of social media. Pull customers closer to your business via interaction and boost their loyalty towards you.

Do read up on my blog post on social media errors as well. :)

Obtain Feedback

I don’t know whether I should stereotype all restaurant owners but this particular client that I have do not track his business down to the details. You need to obtain feedback from your own customers, generate your own statistics and start analyzing the data to search for a room to improve.

A simple question like “How was our food?” can spark a lot of response from your customers.

Scallops Ubiquitous Chip

Also, start tracking the number of orders received for each menu item. With the data collected, apart from inventory management, reasons why some items are not popular will be made known to you. It may be due to the name of the food or the food is unacceptable by your restaurant’s demographics.

Improve Your Customer Service

To recession-proof a restaurant, it is not just about cutting costs. People are more sensitive about the price you charge but there will still be people that are willing to pay for the experience of dining at your restaurant.

Make that experience special by offering good customer service. Try to fulfill their demands as much as you can and educate your staffs on how to treat customers better. Give loyal customers special privileges such as a customized menu or a special placement in your restaurant.

When faced with a difficult customer, hold your temper because they are the King with more power due to the recession and the last thing you want is to serve an authoritative blogger badly.

Your Take to Recession-Proof a Restaurant

The above will be some of my broad take on how to recession-proof a restaurant. Of course, I have not run a restaurant business myself so it is always good to hear from you about some other ways that can help a restaurant to stay up and running during the recession.

Leave a comment below if you have any inputs regarding the tips above.

Photo Credits: Gaetan Lee

{ 12 comments }

David BE KING! March 5, 2009 at 3:40 am

Great stuff man! I think it would be cool to own a restaurant someday… just for the fun of it! just order whatever i want “specially made” every time! :lol:

Wayne Liew March 5, 2009 at 4:05 am

:mrgreen: Running a profitable fun restaurant that is. It takes a lot of money to run a restaurant for fun unless you want a loss-making restaurant to set off your taxable profits from other businesses. :lol:

David BE KING! March 5, 2009 at 11:40 am

Great stuff man! I think it would be cool to own a restaurant someday… just for the fun of it! just order whatever i want “specially made” every time! :lol:

Wayne Liew March 5, 2009 at 12:05 pm

:mrgreen: Running a profitable fun restaurant that is. It takes a lot of money to run a restaurant for fun unless you want a loss-making restaurant to set off your taxable profits from other businesses. :lol:

magnetsfast (Trey Schaefer) March 6, 2009 at 3:52 am

Great post. Very informative and laid out extremely well. I learned a bunch from this even though I’m not in the restaurant business. You can apply these principles to any business.

Wayne Liew March 6, 2009 at 5:12 am

The restaurant business suffers a lot, especially those that are serving gourmet dining experience for small to medium size communities. Yup, you can modify the strategies and tactics a little so that it can be adopted by your business. The principle stays the same.

magnetsfast (Trey Schaefer) March 6, 2009 at 11:52 am

Great post. Very informative and laid out extremely well. I learned a bunch from this even though I’m not in the restaurant business. You can apply these principles to any business.

Wayne Liew March 6, 2009 at 1:12 pm

The restaurant business suffers a lot, especially those that are serving gourmet dining experience for small to medium size communities. Yup, you can modify the strategies and tactics a little so that it can be adopted by your business. The principle stays the same.

Melissa April 14, 2009 at 6:55 pm

We have had our restaurant for 2 years and have 3 years remaining on our lease. I desperately want to get out of the restaurant business. As you stated, it is very expensive operating a restaurant. People think it only costs a few cents to make a taco, but they don’t consider rent, utilities, insurance, PAYROLL and cost of supplies (those take out boxes add up!) Any advice? I am seriously ready to walk away but worry about the remaining lease term….

Wayne Liew April 15, 2009 at 12:35 pm

Hey Melissa, I totally understand your situation as a restaurant owner. Have you tried negotiating with your lessor regarding the lease term because this is totally dependent on the contract that you have signed. In fact, a lot of business owners have been complaining about the high cost of closing down a business.

On the bright side, I am sure that there are some frequent customers, right? Have you asked them about what they particularly like about your restaurant? Hope to hear back from you Melissa. ;)

Melissa April 15, 2009 at 2:55 am

We have had our restaurant for 2 years and have 3 years remaining on our lease. I desperately want to get out of the restaurant business. As you stated, it is very expensive operating a restaurant. People think it only costs a few cents to make a taco, but they don’t consider rent, utilities, insurance, PAYROLL and cost of supplies (those take out boxes add up!) Any advice? I am seriously ready to walk away but worry about the remaining lease term….

Wayne Liew April 15, 2009 at 8:35 pm

Hey Melissa, I totally understand your situation as a restaurant owner. Have you tried negotiating with your lessor regarding the lease term because this is totally dependent on the contract that you have signed. In fact, a lot of business owners have been complaining about the high cost of closing down a business.

On the bright side, I am sure that there are some frequent customers, right? Have you asked them about what they particularly like about your restaurant? Hope to hear back from you Melissa. ;)

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