Restaurant Business Strategy: New Owner FAQs
Straight Talk on FAQs
Target: Restaurant Start-ups and restaurants that want to reboot their operation.
Focus: The middle ground of restaurant business strategy that focuses on the fundamentals of long-term growth and profitability.
I’ve heard a lot about social media like Twitter, Facebook, and Foursquare: should I start using it to build sales?
The key point to understand about social media is that social media are tools that must be carefully managed to be productive.
I suggest that you learn about social media but refrain from using it extensively until you can answer these two questions:
1. How much time, money, and effort must I put into it before it will make a difference in my business?
2. What will I have to give up or replace to invest in social media?
The middle ground of restaurant strategy suggests that you guard against investing in something that may not produce significant results, and to avoid being distracted from your core business.
Social media cannot be ignored, however. I suggest that you personally follow 2 or 3 social media for yourself before you follow it for your restaurant business (start with Twitter and Facebook). Engage your staff in conversations about social media (this will energize your daily meetings). Invite your staff to recommend how social media can be used to promote your restaurant and challenge them to gather relevant success stories to serve as models. Then set specific objectives and test.
It bears repeating: social media are tools that must be carefully managed to be productive.
Should I hire an ad agency?
This question has many facets to it. Many people and small organizations call themselves ad agencies, and what they deliver varies widely. To start, it’s important that you know exactly what you need. For example:
• If you want to create awareness in traditional ways-use an ad agency
• If you want to create awareness on the web and establish an online presence-use a web agency
• If you want help on an overall marketing strategy- use a marketing agency
• If all you want is new merchandising pieces-use a graphics designer
Many organizations combine multiple functions and claim to be expert at all of them. Beware of overpaying for what you do not need, and be willing to pay for the expertise that will really drive your business.
The best way to answer this question is to be specific about your business goals, to educate yourself about different agency capabilities, and to have an agency or individual explain how their specific capabilities will satisfy your specific business goals.
How much should I spend on marketing?
The quick answer to this question is to spend what it takes to achieve your goals, within budget, and within your profitability guidelines that include acceptable margins.
Determining this level of spending is another, complicated issue. Reduce complexity by following these suggestions:
• Use restaurant segment spending guidelines as a base. These guidelines exist because they have been validated over time.
• Don’t spend without having some form of performance measurement.
• Use customer count as your main indicator of performance.
• Have realistic expectations: spending small sums to achieve large results is unrealistic, while spending large sums (e.g. merchandising design and graphics, website redesign, etc.) may never yield a return.
• Become smarter and reduce risk by setting objectives, measuring results, and testing even in modest ways.
More restaurant business FAQs here, like "All my competitors are discounting? What should I do?"
Mission: To help small and mid-size businesses capture the power of big-picture marketing.