Three Crucial Steps to Building Sales

We’ve seen an acceleration of restaurants going out of business within the last year. Why? Possibly because they are not embracing an active, predictive approach to marketing. We believe that restaurants that have been in business for a while need to look at what they are doing and see if it fits into today’s market demands. Clients of ours that have done so are increasing their sales in varying degrees. We’ve seen as high as 30% and as low as 1%. So here is a brief overview of the formula:

Step I: Gather Data to Evaluate your Operation.

What kind of place are you running? Does it still do as good a job of attracting and satisfying guests? If not, what is the problem? Do a through check-up on your service & management, food & beverage and cleanliness & repair. Develop a checklist that lists all the items in each category and grade them. You, as the owner, need to do this. Also it is a good idea for both management and staff to do so. Be sure to leave room on the form for comments because there will be plenty of them. You might ask the question, “If you owned this restaurant what would you do to improve its position in the marketplace?” You will get some very interesting responses. You might develop a secondary questionnaire that addresses food and beverage as well as cleanliness and repair for key guests, family members, friends, etc. Get enough responses so that the data received is sufficient. If you need help developing a list please email us at [email protected]. We can be of assistance.

Step II: Evaluate your operating costs. 

Are you set up to make money? As a rule of thumb we suggest you run a 60%-65% prime cost, which includes the cost of goods sold, labor, and taxes & benefits. Operating costs before rent should be in the 12%-17% range and the rent including triple net charges would be in the 6%-7% range. This leaves 11%-20% available for debt payment, owner’s draw, etc. Your financial model must fit into these parameters. If it isn’t fitting then contact us to evaluate what could be done to get it to fit into these parameters.

Step III: Evaluate your Marketing and Merchandising Plan.

Do you have a written marketing plan? It would include objectives, goals, strategy, tactics, timeline and budget. It should be an annual plan. It should include the components of advertising, public relations, local store marketing and in-store merchandising. Assign tasks to willing individuals within your company. Work with them closely. This plan can be worth at least a 5% increase in sales. More than likely it will be closer to a 10% increase.

These three Steps should get you started into improving your business, growing sales and reducing costs. For assistance in any or all of these areas, Contact us today.

Request Consultation

Request Consultation