Tips to survive and grow in 2012

Larry Hodes is a consultant to the restaurant industry. He has a wealth of experience as a restauranteur, franchisee and consultant to the contract catering industry.

He shares critical tips for restaurateurs on how to survive and grow in 2012:

“With the current global crisis, which looks set to continue well into 2012, this is impacting negatively on the restaurant industry. Food prices, labour costs, electricity are all increasing at quite a rapid pace. For quite a few restaurateurs this means that sales turnover is not keeping in line with increased expenses.

“This leads to some restaurateurs adopting a negative and pessimistic outlook, which unfortunately impacts negatively on their business. The successful restaurateur remains positive and optimistic and they see opportunity. They acknowledge the recession, yet they focus on what they have control over, i.e. they have no control over the economy, but they do have every bit of control over what takes place in their business – internal control of their business.

Points you can control:

1)      Create a budget for the year. If you do not have a budget, you will not know what targets you need to achieve. With a budget, it provides direction, focus and purpose.

2)      Service, even more so is going to be the differentiating factor. Customers demanding greater value for their money. Excellent customer service adds considerable value to the experience. Investigate ways to improve your service cycle. Your biggest competition is your customers, not the restaurant across the road. The best (free) marketing is a satisfied customer who shouts your praises.

3)      Hire the correct staff. Unfortunately restaurateurs generally do not spend enough time or lack the know-how/skills to hire the correct individuals. Hire for attitude, as skills and knowledge can be learned. Remember your waiters are your first line marketers. Very easy to hire and very difficult to “unhire” staff. The biggest stress in a restaurant is staff. Hire the correct staff and the majority of your stress disappears

4)      Management is key – get this wrong, no matter how good your line staff are, the restaurant will not succeed without good management. If your staff don’t perform, look at your managers first.

5)      Have systems and controls firmly in place. All management must be disciplined to ensure that these systems and controls are implemented and managed. Without controls and measurements, you are running your business in the dark.

6)      Only 3 ways to increase sales turnover – new customers, customers increase visits and upselling. Key method to achieve this is to train your staff. See training as an investment. Benefits of trained staff – improved service, increased sales – upselling, improved staff motivation and ????.

7)      Always continue marketing. Investigate innovative methods to market your business. Ensure you are utilising social media, such as Facebook and Twitter. Focus on community marketing. Revisit tip 3 & 6.

8)      Be brilliant at the basics. Successful restaurateurs focus on getting the basics spot on.  Some restaurateurs want to be extravagant/ have big ideas, yet they do not have the basics in place.

9)      Aggressively control your costs (tip 1 – budget). Educate your staff about all the costs incurred in your business. Sometimes, staff perceive you are making loads of money even if you aren’t.

10)   Be bold. Be prepared to make the changes that will positively affect your business, even it is a painful change. As Albert Einstein defined insanity: “doing the same thing over and over again and expecting a different result”.

Larry Hodes is a partner in The Restaurant Code, together with Mike Said. For more information go to: www.therestaurantcode.com or tel 082 805-1573. His is a full house restaurant consulting company focusing on growing restaurant’s top and bottom line.