So, you have dreams of opening the best restaurant in town… or perhaps you already have your name above the door somewhere but are failing to turn it into the restaurant you envisioned at the beginning of your business venture.
If you are hoping to take your restaurant business to the next level, this article will help you understand what is required to make those improvements.
Owning a restaurant is not as simple as many might think, and restaurateurs often learn this the hard way. A love of food is certainly never enough to get anyone through the difficult early days of owning a restaurant, but determination, a carefully devised business plan and the right resources will definitely increase your chances of beating the odds and succeeding.
The team at Nucleus Commercial Finance understand how challenging it can be to run any business, but SMEs have a particularly difficult uphill struggle when they are trying to establish themselves amongst their competitors. We have put together a list of the 8 top tips for restaurants wanting to get a head start on their competition.
1. Scrutinise Your Menu
We have already talked about this in our ‘Cash flow challenges and how to solve them: Restaurants’ blog, but it is certainly worth remembering and as a result, it is at the top of our list.
Ensuring that your restaurant has the right menu in place is vital if you want your business to have a good profit margin. Having the wrong menu on offer may end up negatively impacting the cash flow of your restaurant business.
Choose dishes which you know will appeal to your customers, showcase your restaurants USP’s and find suppliers with both great quality products and excellent prices. Additionally, sometimes less is more – avoid the temptation to overwhelm your customers with too much choice as this will make monitoring stock difficult and will likely end up producing a lot of unnecessary waste.
The majority of people just cannot resist a good deal and that is especially the case when it comes to food. This is often how restaurants get customers flocking through their doors during the week.
Attracting regular customers during the week is one of the most difficult parts of running a restaurant, which is why many choose to close their doors for a large chunk of the day.
Establish yourselves as a restaurant who is generous and who likes to give back to its customers– try offering free starters with certain main meals, or a 3-course set- menu that is fairly priced.
3.To Test is Always Best
If you are planning on introducing a new item to the menu, the best approach is to offer free taster tests to your customers when they come in. The best approach is to get three or four similar items and see which one they prefer the most. You might be surprised with the dish that makes the final cut.
This is a great idea because it means that you can gauge whether a new drink or dish will be as popular as you think, before you go and spend a lot of cash stocking up – only for the item to go stale on the shelf.
Another approach to test whether a new menu addition is going to be popular is to offer it as a seasonal special. Similarly, to McDonalds with their in-demand Big Tasty product, your restaurant can offer items at certain times of the year to retain interest in it.
4.Make Use of the Technology Available
Whilst there are many who are opposed to the idea of incorporating technology too much into their everyday lives, smart business owners have realised that using it to their advantage is the smarter way to stay ahead of the competition and add another asset to the wider customer experience.
There are numerous technology solutions out there that restaurant owners can utilise. From having a website that has a booking system online (therefore saving members of staff the need to be on the phone), to head pieces worn by table staff and front of house to improve communication throughout your restaurant, there is a solution for most challenges faced by restaurants.
A lack of finance should not be the obstacle that is preventing your restaurant from making the necessary improvements to stand out from the competition. There are products that have been tailored specifically to help SMEs get access to the things they need to advance their business, such as Business Cash Advance (BCA).
5.Access Funding at the Right Time
Getting funding from the bank or alternative finance providers should not be a last-ditch effort to save a business, but unfortunately, a large number of business owners have not quite realised this yet.
There is still such a taboo surrounding loans and there are plenty of SMEs out there that are put off the idea of seeking a small business loan because of this.
The key to funding is to access it when your business is in a strong position, rather than when it is in desperate need of being saved. Negotiating terms with a strong hand is always best and using funding to achieve the growth targets of your restaurant is actually a very smart idea. It is possibly what will set you aside from your competitors.
6.Be More Energy Efficient
Running a restaurant can soon become an expensive operation. There are some things that cannot be avoided, such as rent for the premises, staff salaries and stock costs, but there are ways to save money to improve the cash flow of your business.
Installing motion sensor lighting into areas of your restaurant is a fantastic way to be more energy efficient, which as a result will save your restaurant money. Reducing your energy bill will free up cash that can be spent elsewhere in your business.
7.Get to Know Your Customers
If you want your restaurant to be the talk of town, then one sure-fire way to get people talking is by speaking to your customers yourself. Having the restaurant owner come in and mingle with the rest of the staff and customers is quite a charming addition and it always goes down well with guests.
Try to talk with customers regularly and ask them for feedback on what your restaurant is doing right – and what it can improve on. This is the perfect opportunity to solve problems that may arise before it is too late.
8.Get Social Online Too
Businesses that are not properly utilising social media will eventually be the ones to fall behind, if they have not done so already. Most companies have an online presence – so much so that those who do not embrace social media often miss out on custom, as people go elsewhere to competitors that are available on digital platforms and use them to promote their services effectively.
Having a presence online is massively important for any business these days. Not only can it be a fantastic marketing tool for your restaurant, but it is also an opportunity to improve your customer service as well.
Your restaurant can reach out to customers for feedback and keep them in the loop regarding special offers. Some of the most popular brands out there are the ones who are engaging with their customers online.
Dominos have ‘DOM the Pizza Bot’ strategy. It keeps customers up to date with their order and notifies them when their food is being prepared, put in the oven and when it is out for delivery or ready for collection.
If you have the manpower to do it, offering delivery services from your restaurant is another fantastic extra that your customers will appreciate.
Denny’s Diner have also made a name for themselves as being one of the wackiest, yet entertaining food brands out there. They know their market audience and realise that their social media feed should not resemble that of an upmarket brand such as Rolex. Their Instagram feed is packed full of humorous and quirky posts – and with 283,000 followers, it is safe to say they are killing it.
The restaurant industry is one that is constantly evolving, and restaurant owners need to consistently strive to do better than their competitors to impress their customers. It is vital that restaurateurs constantly remain focused on delivering the best service and products, all whilst maintaining a healthy cash flow that helps the business itself succeed.