A Look at How Some Restaurants are Weathering the Recession

A few weeks ago, I posted this article offering a few tips on how small business owners can grow their businesses during the recession. As I noted in the post, even in this dismal economy some businesses are thriving.

But for the majority of smaller businesses the focus has become just trying to hunker down and survive the economic storm while remaining somewhat intact.

One of the best examples of small business survival has been in the restaurant industry. The restaurant industry as a whole has seen both ups and downs over the past two years. Price increases in products and supplies, lower consumer confidence, changes in consumer behavior and demand, and less available credit have all had their impact on food services businesses. Yet many are proving to be surprisingly resilient and are successfully weathering the storm.

What’s their secret?

Successful restaurant owners are paying close attention to changes in the market and then adapting to them, they are also focused on developing and defining their brand..

So what specifically are some restaurants doing? Here’s a brief rundown:

Paying attention to quality:

Many restauranteurs are focused on the quality of the experience their customers have when they come to their eateries. This translates into the quality of the food, the service, and the overall level of hospitality. By providing an enjoyable experience, restaurant owners are giving their customers the opportunity to break away from all the dreariness and are in the processing cashing in.

Creating the perception of value:

These days as people look for ways to save money, they need a lot more incentive to spend it on eating out. Put simply, customers are looking to stretch their hard-earned dollars as far as they will go. One successful strategy used by restaurant owners is to focus on their customers’ perception of value. 

But communicating to customers that they are getting a good value (in terms of food quality, portioning, or ambiance) while at the same time not cheapening the perception of the business is actually a delicate balancing act.  It requires sound pricing strategy, menu planning, and marketing. Several restaurants have begun bundling meals, increasing portion size, or adding extras, like a free dessert, to add value while avoiding the appearance of discounting.

Using promotions to draw customers:

Many restaurant owners are also trying to draw customers with a variety of promotions and specials. Some examples include: having a night where kids eat for free or for a small charge, having a theme night, or setting aside slower times of the day or week for special value deals or unique events. Other restaurant owners are experimenting with cooking classes, dietary workshops, or birthday promotions.

Using the Internet to advertise:

The Internet can be an effective and often cheap means of advertising a small business, and this has not gone unnoticed by many restaurant owners. Many restauranteurs rely on a conscientious email marketing campaign, are making sure their business is listed on the popular online directories, and are a maintaining a website.

Emphasizing their unique brand:

All of the previous points are included in this one. The most successful restaurant owners understand the experience and the occasions that their business (i.e. their brand) is positioned for and are focused on building up these areas.

In short, whether you run a foodservice business, or another kind of small business, there are definitely a few lessons to be learned.

(Image Source)

Running a Successful Restaurant: The Menu Format

Because such a large percentage of small businesses are restaurants, I would like to make a dedicated series of posts to running a successful restaurants. There will be a post for this series about once every week or two. Please email me requests for specific topics.

Like most small businesses, restaurants require perfection (or near perfection) in a large number of areas – simultaneously! Ambiance, price, profits, HR, customer service, menu, decor, insurance, financing, raw food material quality and acquisition, recipes… the list is never ending. In the midst of all this, a restaurant owner/manager needs to be careful not to let small (and not so small) details slip through the cracks. Also, s/he needs to decide when it might be most efficient and effective to bring in an outside expert.

One example of such a detail is menu design. No, I’m not talking about menu creation (which dishes will be offered), but about the actual design and medium of the menu itself. Each manager/owner has a different opinion about the importance of a good, relevant menu design. I’ve made a list of the full gamut of options available, with some pluses and minuses.

  • Chalkboard/Letterboard – There are some places that just have a big chalkboard behind the counter, a slightly more ‘classy’ place will have a letter board that you can move the letters around on.
    • CONS – You look cheap, people have to stand to order, they may have a hard time reading it, etc.
    • PROS – Cheap, easy to change
    • BEST USED – Best used at a ‘stand’ (snack, hot dog, etc) where there are just a few things on the menu (less than five) and the customer buys the food directly from the cashier.
    • CLICK HERE to Shop Menu Boards!
  • Back-Lit Sign -Many fast food restaurants have a large, back-lit sign behind the counter with the menu on it. Generally these have some large pictures of different ‘combo’s’ on them, often with designated numbers to make them easier to read and order.
    • CONS – Customers have to stand while reading the menu, they may have a hard time reading the parts of the menu that are not “combos”, hard to change.
    • PROS – If there are pictures, it can make the customer crave the food more, especially if there are combinations. They may start off planning to get a burger, but when they see it with fries and coke they’ll get what they see. And the pictures of dessert will also encourage them to buy more.
    • BEST USED – Fast food, when ordering directly from the counter, if there is a menu with less than 15 items, if customers already know the menu (BK, MCD, etc)
  • Paper Accordion Menus
    • CONS – Wear out quickly, tears, etc. Looks cheap. The entire menu has to fit on one page. It is not particularly impressive and does not entice the diner into more options. Often leads to paper wastes.
    • PROS – Inexpensive to createand easy to replace. The diner can decide what they want while sitting down.
    • BEST USED – This menu is ideal to send home with people for take-out/delivery. It can even be sent in a mailing.
  • Laminated Menus
    • CONS – Tougher/more expensive to change. If you want a good layout it could be pricier.
    • PROS – Relatively nice looking, especially if well designed, it can add to your restaurant’s ambiance and entice its readers into more/specific options. It also is sturdier than plain paper and can handle spills with no trouble.
    • BEST USED – A diner, even an upscale one, and low/middle tier ethnic cuisine.
  • Menu Jackets
    • CONS – More expensive than laminating on a “one-time” basis (however they are reusable), they do wear out eventually and can start to look ratty.
    • PROS – Classy, easy to slip new menus in and out, easy to clean. A wide array of color and pattern choices. Even a simple menu looks elegant in a menu jacket.
    • To Shop Menu Covers VISIT… Sewn Menu Covers OR Sealed Menu Covers
    • BEST USED – Middle and High class restaurants, diners and ethic cuisine.

Check out my other menu post.

Running a Successful Restaurant: The Menu Design

Because such a large percentage of small businesses are restaurants, I would like to make a dedicated series of posts to running a successful restaurants. There will be a post for this series about once every week or two. Please request specific topics via the comments form of this post.

Two of the many points which contribute to restaurant success are: ambiance and marketing. The menu design is an opportunity to hit both of these points in one place. In fact, experts say that an effective menu design can increase profits up to 10%.

There are a few for options for restaurant owner/mangers when they are deciding how to go about designing their menu:

On Their Own:

  • Some restaurant owner/managers are happy just using MS Word or Excel to put together a simple menu which they then print out and either leave as plain paper, laminate, or put into menu jackets.
  • Although this method is the cheapest, getting the layout right can be very time consuming. Often the final product leaves a lot to be desired.

Menu Templates:

  • There are specially designed menu templates available for restaurant owner/managers to input their menu into. These are already formatted and have places for you to add graphics. They also have graphics you can choose from.
  • Menu templates are great if you already know exactly what order you want to lay out your menu in. They are a big time saver and will make a finished product which will improve your restaurant’s image.

Full-service Menu Design:

  • There is also the option of having your menu professionally designed by a company like The Menu Maker. They have special techniques and design tricks to make your menus image enhancing ‘eye candy’ which can skillfully direct customers to certain items.
  • This is pricier, but most restaurants that use it are very happy with the result and find that it pays for itself in image reinforcement, marketing, and in encouraging sales of the more profitable dishes.

Graphic Designer/Ad Agency:

  • Some restaurant managers decide that they want to go with a professional graphic designer, or use the same agency which they may be using for their other marketing and ad needs.
  • The plus here is that the agency will be able to easily streamline the menu with the other marketing efforts. Also, it means dealing with fewer vendors (as opposed to using an agency for mailers, etc and a menu design firm for menus).
  • However, generally designers at these companies work on many projects other than menus; therefore, they may not be as “expert” as those at menu design companies. Additionally, it can often be more expensive, because they don’t have all the menu resources which a menu-dedicated design agency will have at its disposal.

The decision you make regarding how, and through whom, you design your menu can have a big effect on your bottom line – so make sure you think about all the issues before you invest time and money in your design.