I’ve decided to start a new category of posts for the O’Dell Restaurant Consulting blog that I think will be very beneficial to restaurant owners everywhere. I am going to review restaurants that I have been to. These are not reviews from strictly a patron’s standpoint, but from the standpoint of an experienced food service professional and consultant. I will attempt to identify strengths and weaknesses in the operations of a restaurant and make suggestions on how the particular restaurant could maximize these strengths or overcome the weaknesses. Please read the following disclaimer:
Disclaimer: This review should not be read as an endorsement or warning for or against patronizing the described restaurant. It is intended strictly as a study of the restaurant’s operation, perceived weaknesses and strengths, and suggestions on how to improve the operation. As this review is not sanctioned or paid for by the owner, it is not meant to be a comprehensive review such as one O’Dell Restaurant Consulting provides to it’s clients. It is strictly superficial. There has been no discussion with the restaurant owner about these observations and no back of house or office visit has taken place to gain perspective as to the cause of the problems. My assumptions are based on my experience and may not necessarily reflect the actual cause or source of an issue.
Now that the disclaimer is out of the way, let’s get to my review. I will break this review down into three sections that describe different key parts of the operation; reception, service and food. Future reviews may contain other parts of the operation I have also been exposed to, such as marketing.
Waxy O’Shea’s Irish Pub – Mother’s Day 2010
Mother’s Day or Easter are traditionally the busiest days of the year in a restaurant. Many restaurant, like Waxy O’Shea’s, offer a brunch buffet. The intent of offering a buffet is to serve as many patrons as possible in as short a time as possible. On a day like Mother’s Day, it is especially important for a restaurant to process customers quickly. There are many customers to be served and the more customers served, the more sales dollars to be made.
Quick service for a buffet starts with the reservation (or no reservation) of tables and seating of customers. In order to process the most customers possible, a restaurant must have a good system in place to get customers from the door to the floor. Our first observation about Waxy O’Shea’s came when calling to make a reservation. Waxy O’Shea’s does not take reservations on regular business days and did not take them for Mother’s Day. Not taking reservations normally serves two purposes for a restaurant:
- No reservations means no empty tables being held open while the restaurant is waiting on the reservation to arrive. When there is a steady stream of customers, not having tables sitting empty for reservations means the restaurant can serve the maximum amount of customers their staff can handle during their rush. This normally means maximized sales.
- No reservations also eliminates the work of processing phone calls, tracking reservations and setting up a dining room to accommodate those reservations.
Not taking reservations sounds like a good idea, doesn’t it? In theory, it is, and it works for many operations. However, on the busiest days of the year, not taking reservations eliminates some advantages that can be gained through better planning.
- Taking reservations means being able to adjust hostess, bar and service staff to make sure your customers are best served.
- Taking reservations means being able to adjust food production to reduce waste, or more importantly, to make sure there is enough food to serve everyone.
- Taking reservations allows you to plan ahead for large tables and reservations that require you to separate or put together tables in your dining room.
- Taking reservations means having some control over the flow of customers in and out of your restaurant, allowing you more direct effect on their dining experience.
Whether or not taking reservations is a good idea for your restaurant depends on your ability to handle lines of people, clean and reset tables and give proper service.
Here is my observation on how Waxy O’Shea’s did in receiving and seating their customers.
First, I believe Waxy O’Shea’s would have benefited greatly by having a reception area for customers. The restaurant has a small wind break foyer, then a small receiving area inside the front door. The left side of the restaurant is the bar and the right side is restaurant seating. The small receiving area inside from the foyer has a floor standing specials board with a couple plants behind it. There is also a floor standing specials board in the foyer. In my opinion, the second one inside the door is redundant and the space would be much better used as a reception with benches for patrons who are waiting. Instead of a hostess stand, there is a shelf in the hall to the dining room where the menus are set, with a stool beside it where the floor plan with sections on it is kept. The look is very unprofessional and I believe this area would be best utilized for additional seating for reception. In all, I believe there is room to create seating for 12 or more patrons at the front of the restaurant. I’m sure the owners of the restaurant would question where to set up the menus and floor plan. I believe there is also plenty of room for a free standing podium with shelves inside, though I would rather see a built in hostess stand with a telephone line ran directly to it.
Another observation about the seating process of Waxy O’Shea’s was their lack of hostess staff. One person, who may have been an owner, had a note pad to take names for a seating list. While she did a good job with keeping everyone straight who was waiting for her to add them to the list, she was also trying to help clear and set tables for seating which took her from the front. While we were already on the list and waiting for a table, four groups of customers came in and waited to be put on the list. They were all added to the list in the right order of their arrival, but what the hostess/owner did not see was the 3 groups that came in the door, were not greeted and left to go eat somewhere else. The lack of a good setup and system cost the restaurant at least $200 in sales just in the 20 minutes I was waiting for a table.
On the positive side, we were able to come in the front door of the restaurant, put our name on a list, and get seated in 20-25 minutes. That was pretty good for Mother’s Day. However, I was very disappointed to see that after waiting for 20 minutes, and counting around 20 people waiting behind us, there were 13 tables in the dining room that were no longer full. Lack of a good system and slow processing caused all those people to wait while the restaurant could have been serving them and earning dollars, in addition to serving the others that decided not to wait. To someone walking in the door, the restaurant was full and the wait looked to be an hour. In reality, half the tables in the dining room were empty and the hostess was on the floor instead of greeting them and explaining the situation.
In addition to changing the reception setup, I believe Waxy O’Shea’s would have greatly benefitted from being adequately staffed for reception. In a restaurant that seats likely 200 people, a day like Mother’s Day where the tables could have been turned 4 or more times would require at least 3 hostesses. There could have been a constant flow of patrons being lead to tables while another hostess helps put together or separate tables to set them to the right size, while the hostess/owner/manager was supervising the process and managing the waiting list.
Upon being seated, our table was greeted by one of the waitstaff very quickly. I believe it is important that guests be at least greeted within the first 30 seconds of being seated. Mission accomplished. That server was taking care of another section, but the greeting acknowledged us and let us know someone would be with us shortly. Our server took 2 or 3 minutes to make it to our table, but on a very busy day that is acceptable, though not preferable. The server took our drink orders which included water and a couple bloody marys. She put our drink order into the POS to send to the bar, then went after the waters. The waters took longer than needed to get to the table, but not unacceptably long. However, the bloody marys didn’t come back on the first trip with the waters. It took more than 5 minutes to receive the bloody marys.
During the meal, the server returned to the table twice to clear plates and ask about needs and another time to refill beverages. A manager also cleared plates one time. This many trips to our table did provide the necessary visits to provide good service, however the server neglected to refill the coffee for one of the guests. Though this level of service wasn’t “bad”, it wasn’t impressive. My wife perceived this as the server not considering to refill her coffee. While the server did ask if we needed anything on a prior visit, a better trained server would ask specifically if the coffee needed refilled, or better yet would have just made rounds with a coffee pot and topped off every coffee cup in the section or even the whole dining room. EVEN better yet, the restaurant could have staffed bus persons to refill coffee, tea and water, in addition to clearing and resetting tables to allow for faster seating. There seemed to be enough servers staffed in the dining room, but no bus persons at all.
Here are some changes I would suggest to Waxy O’Shea’s to improve their service for future Mother’s Days and other busy days. I suggest having two bus persons in addition to the two additional hostesses. Between the bus staff clearing and resetting tables and the hostess staff seating customers quicker, Waxy O’Shea’s could have processed dozens more customers. Using bus staff to also refill teas, coffees and waters would not only increase the level of service and improve customer’s perceptions of service, but it would also allow servers more time to suggest, sell and replenish cocktails. Cocktail service could have been started at the reception area. If the bar is properly staffed and set up for speedy service, the cocktail sales on the day could have likely doubled. Another suggestion would be to set up smaller service stations through the dining room where water and tea pitchers could be kept for quick access. They could also keep a coffee burner on those stations for quick access to coffee. With just a tray jack, tray stand and a table cloth, you can create a very effective service station. One more step I would take would be to prefill glasses with water and ice and have them at the ready to set down as soon as the hostess knows how many patrons will be at a table. When the table is being cleared, a hostess can convey to the bus person that the table needs to be set up for “x” number of guests. When the guests arrive, their waters are waiting and the server can concentrate on selling them add-on beverages like tea, coffee and cocktails.
In all, I think the service at Waxy O’Shea’s was acceptable for a busy day, but “acceptable” should never be good enough. If you want to earn a great reputation, you need exceptional, not acceptable service.
As far as quality goes, everyone at our table was pleased with the food offered at Waxy O’Shea’s Mother’s Day brunch buffet. Most their food, if not all, is made from scratch and well seasoned. The biscuits were light and fluffy and the prime rib was tender.
What I would have improved upon from a food perspective at Waxy O’Shea’s was the presentation of the buffet. The buffet was simply chafers lined up on a table. The salads were in several different types of bowls crammed together on a 4-top. The omelet station was an absolute mess by 11:00 am. I can only imagine what it looked like by the time brunch was over. The prime rib carving station was just as messy. The rib was being carved on a cutting board set inside a sheet pan, with tin foil covering the exposed rib to keep it from getting cold. Visually, the buffet was a disaster.
The first thing I would have done to improve the perception of the food would be to garnish the pans and bowls of food. Creative use of herbs, lettuces, colorful vegetables and fruits can do a lot to enhance the appearance of a pan of food with very little cost.
The next thing to do would be to have their carving and omelet stations moved to a different location. It’s hard to describe a restaurant layout on a blog, but the important thing to convey about the buffet layout is that the carving station and omelet stations were positioned beside the reception area on the opposite side of the area from the dining room. This drove much of the traffic to the stations through the guests waiting at the front of the restaurant. While I didn’t see any major occurrences from our table or while we were at the reception waiting for a table, there was a lot of cross traffic that could have resulted in a spilled and/or broken plate, stains on customers or even a slip and fall accident. Any of these things can pull needed staff and attention from the dining room and affect service and the customer’s experiences. The main part of the buffet was set along a wall inside the bar. A better place for the carving and omelet stations would have been anywhere inside the same room. Tables and seats could have been moved and recovered in the area where the stations were. The flow of the buffet would have been much improved and a lot of risk of potential accidents could have been avoided.
Along with moving the buffet, the overall aesthetic appearance of the buffet could have used a “woman’s touch”, or at least the touch of a create man. Chafers can be elevated slightly to give the appearance of levels. A nice centerpiece can be placed on the table with some flowers in in. Other decorations such as colored beads, fresh flowers, lemon leaf, leather leaf, ribbons or different colored linens can be used to fill space between chafers and liven up the appearance. The salad presentation could be spruced up with some attractive bowls and creative garnishing, different levels and the same decorations. I would also suggest to delegate the constant cleaning of the buffet to one kitchen staff member. This person should have a wet rag at all times to wipe off the excess food being spilled onto the table cloth. Messy spills can then be covered with clean napkins of the same color.
The appearance of a buffet can have a dramatic affect on the perception of the food by the customers. Great food on a nasty buffet suddenly becomes mediocre food. Mediocre food on a beautiful buffet becomes great food. Imagine what kind of impression great food on a beautiful buffet can make.
The lesson to be learned by this review is not to leave money on the table. With better staffing, a more guest friendly reception, quicker seating, faster bar service and wait staff more focused on selling “extras”, Waxy O’Shea’s could likely have increased their Mother’s Day sales by $2000.
If they take the extra step and improve the look of their buffet, they could move their price from the bargain $14.99 we were charged, up to $25 per person which is still less than other “nice” buffets they are competing against for customers. If they can pump through 400 customers on Mother’s Day with efficient systems, that extra $10 per customer could gross them an additional $4000 in revenue.
Done my way, their brunch could have easily yielded $6,000 more in sales while pleasing more people and earning more repeat business than how it was done. Take what I have observed at Waxy O’Shea’s and apply it to your big brunch days. Don’t forget that days of “guaranteed” traffic like Mother’s Day are a prime opportunity to build your customer database with names you could turn into regulars.
This is probably the most often asked question by restaurant owners, managers and chefs. If you are smart enough to be calculating your actual food and liquor costs by performing a physical inventory, then you are half way there.
This article will discuss a very important part of controlling food and liquor costs, one that most restaurants do not do. To many of you, this will be new information. To many others, this is something you’ve heard myself and others talk about, but have never known how to actually perform the task. This article is about ideal costs, why they’re important, how to calculate them and what to do with the information.
What are ideal costs?
Ideal costs are the dollars that the product you’ve sold should have cost you to sell. They tell you that if you’ve sold 20 hamburgers and 10 steaks, that it should have cost you “x” amount of dollars.
Why are ideal costs important?
Ideal costs are important because they give you a scale to measure your actual food costs against. When you perform a physical inventory at the beginning of a period and calculate it’s value, add your purchases for the period, then subtract the value of your physical inventory for the end of the period, you are calculating your actual costs. This is the amount of dollars the food you sold during that period actually cost you to sell. This number is imperative to know if you want to control your product costs. However, most operators make the mistake of using this number all by itself to determine if they have cost problems. They only compare it against a budgeted cost percentage. With only doing this, there is absolutely no way to know if your actual cost is good or bad, only that it is higher or lower than some arbitrary budget number. It’s relativity to the budgeted number does you no good because your budget number does not take into account your sales mix. If you set your budgeted food cost for example, at 35%, and your actual cost is 40%, many chefs/managers/operators will assume there is a problem with the costs. The error with this assumption is that a simple change in your sales mix could have created this variance, and there may be absolutely no problem with waste, theft or any other issue. As a matter of fact, what you’ve experienced could be a desirable situation where you’ve sold a higher number of high cost percentage, high gross profit menu items during that period. This would cause your actual food cost to be higher, but it will also drive your profit higher, creating a situation where you might actually reprimand your staff for doing something good! After all, you’d rather sell 5 steaks that cost $10 and sell for $20 ($50 gross profit) than you would 5 hamburgers that cost $2 and sell for $8 ($30 gross profit), wouldn’t you?
How do you calculate ideal costs?
To calculate ideal costs, you need to know how much your menu items cost to make, whether they are food items, liquor drinks or beer (luckily the recipe for a bottle of Bud is pretty easy to cost out). This requires that you make recipes for all your food items, and calculate costs per pour for all your liquor and tap beer. Bottle beer costs what you buy it for. If you know how, liquor and beer costs can be calculated right in your inventory spreadsheets. I have spreadsheets that make these calculations automatically when you enter in bottle and keg costs, in addition to pour sizes. Food items should have a recipe spreadsheet created for each of them. To make recipe calculation easier, you can link recipe spreadsheets to your inventory spreadsheets which will update your costs as you update your inventory prices. If you don’t know how, just do the math by hand and update your recipe costs at least every six months, or you can email me at email@example.com to help you.
Once you know what every item you sell costs you, you have to track how many of each item you sell. I suggest using a spreadsheet to track these numbers to keep things organized. When you know how much of each item you sold for a period, and you know how much each of those items cost you to sell, you can multiply those two numbers together to come up with an ideal cost for those items sold. This is what those items should have cost you to sell.
What do you do with all this information?
When you calculate your ideal costs for a period, and you also have performed a physical inventory and calculated an actual cost for the same period, you have the information to truly control your product costs. Convert your ideal costs to a cost percentage by dividing your ideal cost by your sales for the period. Convert your actual costs to a cost percentage by dividing your actual cost by your sales for the period. Compare these two percentages. There should be no more than a 1.5% difference between the two. The smaller the better. If you have a larger variance, you know that you have product getting wasted or stolen, unless there is an error in your calculations. Without using ideal costs to compare actual costs to, you may think there is waste or theft when there isn’t.
Comparing ideal and actual costs is an incredibly powerful cost control tool for your business. You can learn to know when you have a problem, or when you just may need to raise prices.
Not every operator, chef or manager has the ability to create the spreadsheets necessary to calculate ideal costs. To save you time and provide you with a cost control tool that can save you thousands of dollars, I’ve already created this tool. You can visit my webstore at http://www.bodellconsulting.com/webstore.html to find a downloadable file with spreadsheets for tracking your sales by item and calculating not only your ideal food costs, but also your ideal liquor, beer and tobacco costs. If you need help setting up your spreadsheets, you can reach Brandon O’Dell at 1-888-571-9068 to purchase telephone consultations.
If you would like to purchase the Ideal Food, Alcohol and Tobacco Tracking Spreadsheets directly, just follow this link. We process payments through Paypal. If you do not have a Paypal account, simply follow the “continue” link next to the credit card icons on the bottom left of the page:
O’Dell Restaurant Consulting
One of the most frequent questions I hear soon-to-be, and existing, restaurant owners lament, is how much to pay a manager.
“Most” owners asking this question are working owners. After being in the business for awhile, owners start to realize that they can’t be in all places all the time, and still be able to market their business. Working “in” their business keeps them from working “on” their business. Eventually, many of them decide to hire a general manager or assistant managers. Inevitably, the same question always comes up, “What are the industry averages for manager pay?”
Much to the chagrin of the person asking the question, the correct answer to that particular question is, the industry averages are of no use to you in determining what to pay your manager.
Reinforcing and explaining that point is the intent of this article. First, I need to discuss why industry averages are of no use to you in determining manager pay. Then, we’ll discuss what you should be doing to determine what to pay your managers.
Why shouldn’t industry averages be used to determine the pay for my managers?
Every restaurant has a unique financial situation unlike any other restaurant, even if those restaurants are the same concept. Your profit and loss statement looks like no other. The combination of your rent, labor, sales, even cost of goods can be completely different from the same concept in a different location, with different employees, even if you are both McDonalds.
Industry averages are just that, “averages”. They combine figures from small 200 square foot burger huts run by 3 employees, with that of a $1.5 million per year quick service giant with 40 employees. All the numbers from thousands of operations that are nothing like each other are lumped together to create industry averages. While these averages are great to illustrate trends in the industry, and to even compare your own restaurant against and alert you of a potential problem that needs further investigation, they shouldn’t be seen as a guide to use to determine pay. Your operation is different than any other, and more importantly, you are located in a market that is different than the market of most or all of the restaurants used in those averages.
Setting your pay based on industry averages could very well yield a situation where you are drastically overpaying, or underpaying, that employee for that job in your market. You could end up losing money for your decision, or worse, losing a great manager.
What should I do to determine what a manager should make?
Ask yourself these questions:
- What are the businesses paying that I am competing with for employees?
- What can I afford to pay?
- How easy is the job?
Good managers are hard to come by. Landing a great manager is probably going to require you to pay that person more than they can make somewhere else for equal work. To take the first step in figuring out what to pay a manager, you need to figure out what other restaurants in your market are paying. Those are the restaurants your potential manager will be comparing you to. Find similar concepts in the same town and look for their help wanted ads. Call the restaurants themselves and ask to speak to someone about hiring. Pretend you are in the market for a job, that you are an experienced manager, and ask what the potential for earnings are. You won’t always get a straight answer, but if you approach enough restaurants, you’ll get a good idea what everyone else is paying. The key to this being an effective strategy is to only approach businesses in your market. You are competing for employees with the other businesses those employees are likely to go to for a job. Any business too far away for that employee to drive to work to, is completely worthless for information purposes. You aren’t competing with them. You may however, be competing for employees with businesses other than restaurants that are in your market.
The second step to figuring out what to pay a manager is calculating what you can afford to pay. It doesn’t do you any good to go out and get the most incredible manager in the world, and have to pay him/her a $1,000,000 a year if your business only brings in $500,000 per year. You have to be able to afford the manager.
A good “rule of thumb” for management pay, is to keep all combined management salaries (including GMs, assistants, bar managers, chefs, sous chefs, etc.), including their taxes and benefits, under 10% of your gross sales. This is a common figure used in many business models across many industries. As with any rule of thumb, there are exceptions though.
In some instances, a restaurant can have “working managers”. These are managers that fill a position usually filled by hourly employees, in addition to having management duties. When calculating whether your salaries are affordable or not, you should only include the portion of a working manager’s salary dedicated to management duties as part of that “10%”. For example, if you have a shift manager who is also a server, calculate how much you would have to pay another server without management duties to fill the server part of that managers role. Then, subtract what you would pay that server from the manager’s actual pay to calculate how much of the working manager’s pay you should contribute to your “10%” calculation.
Another exception to the rule you might find is in particularly profitable operations with simple business models. These businesses may not have to pay out 10% of their gross sales to attract high quality managers. In their case, they just have to offer higher pay than the businesses they are competing for employees with. Lucky them.
Some restaurants will run into the dilemma of not having a large enough budget for managers when they only use 10% of their gross sales. One option to come up with a more attractive compensation package for these restaurants is to offer a profit sharing bonus structure based on sharing any profit above the minimum profit the restaurant budgets. While the 10% rule of thumb should normally include taxed AND benefits, a profit sharing bonus structure gives you a little flexibility because it is based off potential profit above the budgeted profit. Any part of this “extra profit” is affordable for you to share because it requires the restaurant to be profitable before there is any sharing, and it also requires that you already make the minimum profit you’ve budgeted for. This also incentivizes the employee to earn you more money so they can make more money themself. You can find more detail about this type of bonus structure in a download from our webstore titled “Bonus plan”.
Based on the 10% rule of thumb, you should have a good idea now what you can afford to pay a manager.
The last consideration is the complexity of the job you are hiring a manager for. Not all manager positions are equal. In a restaurant with a working owner who does all the marketing, bookkeeping, hiring and firing, a manager’s job may be fairly simple. They might just be there to watch the floor and help count the registers. You should adjust what you’re offering accordingly, and you should also be very forward about the complexity, or simplicity, of the job when you are interviewing potential managers. You want applicants to be comparing you to other management positions knowing full well what you expect in a manager.
Other factors that make a manager’s job more complex or simple include:
- How organized your business is
- The hours you expect from a manager
- The flexibility needed from the manager
- Whether you are a working owner or “hands off”
- Staff turnover and the resulting demand on the manager
- Whether there are “re-structuring” tasks to be done and whether or not the manager will help
- Whether the manager is also helping market the restaurant
- How much work is required of the manager “outside” the restaurant itself, like catering events or participating in expos and festivals
Just as you would expect yourself, the more you require from a manager, the more you will have to pay that manager to keep them happy. Creating a job description for a manager is a great way of communicating all that you expect from that manager, so you can be up front during the interview process and give them the necessary information to compare a management job with you to a management job with your competitors.
If you do your part by figuring what others in your market are paying managers, what you can afford to pay, and whether your manager position is harder or easier than the ones you are comparing it to, you should be able to come up with a reasonable salary for a manager that keeps them happy and you profitable.
This may be the most important question you can answer when designing a restaurant concept. It is definitely the most important question to answer when creating a marketing plan.
One of the biggest mistakes restaurants make is trying to appeal to everyone. If you think that your target market includes everyone, you are setting yourself up to fail. If you want to be successful in any business, especially the restaurant business, then you need to define who it is that is most likely to buy your products, and focus your concept to appeal to that defined market.
First off, let me tell you what a target market or target demographic is and what it isn’t.
A target market IS the portion of the population most likely to buy what you are selling.
A target market ISN’T the portion of the population you want to sell your food to.
Do you see the difference? You must realize that your target market picks you, you don’t pick it.
When creating a plan to market your restaurant, focus on these points.
- 1. Realistically define what type of person is most likely to enjoy what you want to offer.
- 2. Assess whether that particular demographic works or lives in large enough numbers within 3 miles of your location to support your concept.
- 3. Make sure your marketing is communicated in a manner that demographic can understand, and broadcast via a medium that demographic uses.
Here is how you use those points to build your marketing plan.
Point 1: Realistically define what type of person is most likely to enjoy what you want to offer.
This isn’t the time to be politically correct. You need to examine gender, age, race, religion, income, background, prejudices and sexual orientation among other things if you want to get a clear picture of who you should be marketing to. No matter who you want as a customer, kosher Jews and Muslims aren’t going to eat at your BBQ joint. Lower income Asian families aren’t going to eat at your bistro, and upper income, white yuppies aren’t likely to visit your diner in the hood. If you have a “quiet” atmosphere, don’t expect to attract families of any type. If you have a “noisy” atmosphere, don’t expect seniors.
Until you throw political correctness out the window and truly define exactly who is most likely to eat what you offer, in the atmosphere you are offering it, at the price you are charging for it, you aren’t ready to move on to the next step.
Point 2: Assess whether that particular demographic works or lives in large enough numbers within 3 miles of your location to support your concept.
Once you know who it is that is truly most likely to buy your food, you’ll need to consider whether or not they live or work in large enough numbers in your area to support your business. This is a feasibility exercise. With this point, you are determining whether or not it is even possible for your idea of a restaurant to make it in the location you are considering.
If your concept appeals to low income seniors on a fixed budget, you shouldn’t be putting it in an upscale shopping center surrounded by neighborhoods full of high income families. You also don’t want to open a bistro appealing to high income white people in the ghetto. While these examples seem obvious, I’ve seen many restaurant make the mistake of putting their concept in an area where their target market does not live or work in great numbers.
A good rule of thumb is to only consider the initial 1-mile and 3-miles radius around your restaurant when evaluating the presence of your target market. Whatever the sex, age and income of the persons most likely to eat your food, those persons need to be living or working in great numbers within a 1 to 3 mile radius of your restaurant. The closer the better.
On to the next point.
Point 3: Make sure your marketing is communicated in a manner that demographic can understand, and broadcast via a medium that demographic uses.
Email marketing isn’t going to produce customers for a breakfast diner appealing to seniors. Radio ads on an easy listening radio station aren’t going to bring in 20 and 30 year old hipsters. If you haven’t defined who it is most likely to buy your food, it’s not likely you are using marketing mediums most likely seen/heard by your most likely customers.
In marketing, you must use the language your target market understands. Speak your target market’s language and only create offers that target market values. $10 off a meal isn’t going to attract high income middle aged married couples, but a complimentary bottle of wine with any food ticket over $50 might. While any demographic appreciates a good deal, each demographic has a different set of values. What is valued by middle class high school kids won’t be the same as what is valued by humble German country folk. The language each of these groups understands will also be different.
Communication with your potential customers is just as important as communication with your employees. If you are speaking a language your customers don’t understand, or designing offers your target demographic doesn’t value, then your marketing will be a big waste of money. If your current marketing isn’t working, there is a good chance you’re doing one of these two things.
I hope I’ve driven home the importance of defining your target market. Marketing can be an expensive undertaking, but if you define exactly who it is you should be marketing to, you can greatly reduce the cost involved in reaching the customers most likely to eat at your restaurant. With the right approach, you can not only compete with chain restaurants with big marketing budgets, you can beat them.