Restaurant Long Term Strategy or Short Term Profits?

money-scale.jpgHere is a fundamental question that restaurateurs need to ask themselves: Do you have a long term strategy for your restaurant or are you just focusing on getting short-term profits?

The answer to this question can have profound implications in the way you manage and operate your business.

For example, if you are just looking for short-term profits, then you don’t have to worry about having clear policies regarding how your staff should deal with customer’s issues. If a customer has a problem, you can take the short-term profit route and just refuse to compensate them if you see that they don’t deserve it. You will get their money instead of making them happy. Who cares if they won’t come back? You don’t want those kind of customers anyway right?

Same thing with your staff; if you want to increase your short-term profits, you will try to discount every single penny that you can from them. If they break something, you will discount it from their tips. If they eat, you will also discount the food, etc.

You will also try to understaff your restaurant so that your fixed costs are minimum and you can survive in these tough economy that we are experiencing and you will cut or eliminate your marketing expenses to a minimum or even zero…

Although this short term vision looks like a good idea in these times of crisis, this is a sure way to shoot yourself in the foot in the long run…

People are very sensitive to the way they are treated. And this goes not only for your clients but also for your staff. If you treat people badly (or even not as good as they think they deserve), you are saving pennies and expending dollars. A disgruntled customer will let other 100 people (it was only ten or 12 but now with the Web, it can be hundreds) know about their bad experience in your place. Unhappy employees will do all they can to make you pay from a situation that they believe is unfair. They will be more prone to steal from you and slack as much as they can. The worst part is that your clients will notice that their food has been cooked and/or served by unhappy people.

Saving in marketing is also a sure way to funnel customers to your competitors. All things equal; people will flock to restaurants that bring them incentives to go, and provide them with the emotional experience that they are looking forward to when they go out to eat.

If, on the other hand, you have (or are implementing) a long term strategy for your restaurant, then you already know that people are your main asset. Your clients are the ones bringing you the money, and therefore you should bend backwards to please them. Above all, never ever argue with them; even if this means giving them a free meal and compensating them so that they always leave your place happy and impressed with your service.

Same thing with your staff; if you treat them fairly and even give them an occasional bonus to compensate them for the extra effort that you see they put, they will be very motivated and happy to work for you, and this means that they will transmit their happiness to your clients.

Let’s now talk briefly about your marketing. This is a great time to evaluate how you are spending your marketing dollars. You shouldn’t stop marketing your restaurant, on the contrary, you should use this opportunity to implement efficient and inexpensive marketing vehicles that could bring you repeated clients. Use the power of referrals (you may want to check my Restaurant Referral System in a Box, it’s a very inexpensive and foolproof to bring back your best clients and their friends and families). Also, you should use the power of the Web to promote your business. Online sites like Twitter, Facebook, MetaFlavor, and other can help you spread the word about your place.

Yes, this may mean less cash in hand in the short-term, but you are establishing the foundation for a prosperous business for the long term. If you want your restaurant to succeed, you must create a long term strategy and follow it religiously. Any other action means sacrificing your most valuable assets looking for a short-term solution.

Happy meals,

Jose L Riesco

©Riesco Consulting Inc.


Difficult Times for Restaurants


The NPD Group reports that the U.S. Restaurant Traffic Decline is the Steepest in 28 Years. You can read the complete article here:,896710.shtml

This is bad news indeed but probably no surprise to anybody who is in this industry since you all can see your restaurants emptier than before.

This also means than competition to attract customers is now fiercer than ever. Less people going out for dinner makes the battle to bring people to your restaurant a more daunting task. To respond to this challenge, many restaurateurs are lowering their prices or issuing discount coupons to entice money-tight customers to go to their restaurants.

Although this marketing technique may work temporarily, I don’t think that it’s really a good strategy for the long run. First, you will attract the cheapest customers looking for the most inexpensive place they can go to eat, despite the quality of their dinning experience. Also, these people won’t become loyal clients. Instead, they will go only to restaurants looking for the bargain of the day, moving to your competitors if their discount is bigger than yours.

So what can you do to attract people to your restaurant?

First, you need to be creative and position your restaurant so that it is unique and different from your competitors. Think for just a moment. Do you have something unique that your restaurant has/offers than nobody else does? This is called a Unique Selling Proposition, and you can use it as a differentiator in the marketplace. People understand that they need to pay a little more to get a unique experience, and even in these times of crisis they are willing to do so.

If you don’t have, or can’t come up with anything unique, then you need to put yourself in the minds of your customers. Why should they go to your restaurant instead of going to your competitors? What can you offer them that makes them want to go to your restaurant? These are key questions that can help you come up with your Unique Selling Proposition.

Once you attract new customers, you need to make their visit worthy. Give them the best dinning experiences that you are able to. Make sure that they receive great food and an impeccable service. Make sure that your place is very clean and inviting and that you treat them so well that they would love to come back to your place looking for those good memories that they’ve shared in your place.

Remember, people go to restaurants looking forward to have a good time. Provide them with a great experience and they will come back. Fail to do it and they will take their business elsewhere. There are plenty of restaurants that will be more than happy to comply.

Good luck and happy meals,

Jose L Riesco

©Riesco Consulting Inc.


Are You Stuck Repeating the Same Marketing Mistakes?

mistake.jpg There is a simple yet often ignored rule: “If you are doing something that it’s not working, it still won’t work if you do more of the same.”

If you are investing in marketing and yet your restaurant is not getting the clients that you are expecting, obviously your marketing is not working for you. Sometimes-marketing techniques that used to work, don’t anymore. This could be because the marketplace is changing (more people are looking for restaurants online and ignoring the old fashion ads in radio, magazines, newspapers, etc.) and because everybody ends up using the same techniques and your message gets lost in the sea of marketing bombardment that people receive.

So what can you do to stand out? How can you get your message through?

Well, to start, you must evaluate what you are doing now and track every single marketing expense to see whether they are working for you or not. If they work and they bring you more money than you spend on the marketing, great, keep on doing it. If, on the other hand, you see that your investment is not worth it (or not trackable that it’s pretty much the same), then you must eliminate it and look for an alternative marketing strategy that works for you.

Also, it won’t hurt if you come up with some new marketing ideas to separate your restaurant from your competitors instead of repeating the same marketing that everybody else is doing.

And don’t make the mistake of reducing your restaurant marketing because of the crisis. On the contrary, this is the time to promote your place like crazy. If all your competitors cut down their marketing and you increase yours, guess who will be remember by the customers? That’s right your restaurant.

I know that you are busy people, running the daily routines, and you probably don’t have much time to sit and think about great marketing strategies. I understand, I’ve been there, but then it is critical for the success of your restaurant that you plan and implement great marketing techniques that you can track and evaluate.

They will make the difference between a full restaurant or an empty one.

Now plan some time and think about your marketing strategies. Don’t procrastinate this important task.

Good luck and Happy meals,

Jose L Riesco
©Riesco Consulting Inc.


Restaurant Owners and Managers: Are You Spending Your Time Wisely?

delegating.jpgAs a busy person who needs to deal with hundreds of problems, issues and fires on a daily basis, it is easy for restaurant owners and managers to get sidetracked and lose focus on what’s really important for their restaurant.

So my question to you is this: Are you spending your time wisely? Are you using your working hours to produce the greatest strategic payoff for your restaurant, or are you just spending 80% of your time trying to do things that somebody else would do much better than you? Are you really using your skills to the maximum?

I know that restaurateurs have a hard time delegating tasks. I used to own a restaurant. I know how hard it is to delegate on somebody else when you think that you can do better than they, or that nobody else cares as much as you do. This is probably true, and yet it is not the best way to run a business.

Let’s take a quick test. Please answer YES or NO to the following questions to evaluate if you are truly doing what you are supposed to be doing:

* Are you working mainly on daily tasks that are not relevant to your restaurant vision and strategy? (If you don’t have a vision for your restaurant and a strategy to take you there, you need to sit down for a few hours and think about this one. It is key for the success of your business).
* Are you spending most of your time doing things that you particularly don’t like, or don’t care much about?
* Are you performing chores for which there are people who can do much better (and probably quicker) than you?
* Do you spend most of your time taking care of responsibilities that you are not completely passionate about?

If you answered YES to any of these questions, you should seriously consider to delegate some of these tasks to somebody else. Some things that for you are a burden, for somebody else could be a passion. Not only you will get rid of tasks that are of not interest to you, but you will also get somebody else’s who excels at that particular task doing it. This is a win/win situation since you would liberate your most precious asset: your time, and they will be happy doing something that they really are passionate about.

So think about what really tics you. What are you really good about? What are your strengths? Focus on these and find people who can help you taking care of the necessary and yet unproductive tasks. You will be surprised to see how much you can improve your business by just spending a few hours making a list of tasks that you don’t like and can delegate in some of your employees (or even finding help outside of your restaurant if necessary).

Happy meals,

Jose L Riesco
©Riesco Consulting Inc.