Ron's Tip Jar/Insights - Published by Ron Santibanez   

November 28, 2012


In This Issue:

Tips and Things - Productivity 

Competitive Strategy

Restaurant Start Up - Site Selection..The Principles 



 Tips and Things


 The actual level of productivity of most restaurant employees never comes close to their true capabilities, but they still complain when asked to do more. Some for the bad habits they develop may prevent them from improving their productivity. In addition, having too much time or manpower to complete a task contributes to inefficiencies because employees tend to slow down and develop an unhurried attitude, even during rush periods.

 Consequently, begin by staffing lean. Later, if you find that your employees are working at close to maximum productivity and still falling behind on qualitative and quantitative standards, you can schedule more employees to minimize the work load.


Thought For The Day

 As a manager, the important thing is not what happens when you are there, but what happens when you are not there. 


New Quick Tip - Common Sense Service



Competitive Strategy

The best competitive strategy is to never let your guests get to the competition. Every time a customer eats at your restaurant is one less shot anyone else has to impress them and win them over. So not only do you get the sales but your competitors do not have a chance to make an impression.

People are creatures of habit and once the habit is formed, they are not likely to break it....unless you give them a reason to do so. But they only come back because they want to. Therefore the safest way to build sales is to foster repeat business and to make sure that your customers know all the things that make your restaurant special.   

Special Offer 

I am offering a Two-Day Profit Tune Up for restaurants in Southern California for $800.00. "Just One Good Idea Is Worth The Investment." 

Call me at 866-903-5875 to schedule your appointment or call for special pricing if you are located outside this area. 

Observations - Part 1

I recently had an opportunity to visit a former clients restaurant. We were discussing some of his marketing ideas when he asked me, "what is the most important thing about starting and managing a restaurant?"

I stated, that in my opinion, the most important and challenging issue is recruiting and motivating employees. He strongly disagreed with me and stated that the most important thing was "getting sales." 

Fair enough....but you just don't go out and "get sales." I went on to explain that increasing sales requires the proper execution of the concept. You also need to give people a "reason" to want to visit your restaurant over and over again (frequency). With competition being what it is, you must provide great food at a good value, and you also must create and maintain an atmosphere where people feel comfortable and appreciated. 

I went on to discuss that his employees were a direct reflection of him. His priorities had become their priorities. His lack of enthusiasm was contagious and his employees were just going through the motions...no smiles...no greetings....nothing but surly looks on their faces. Walking into his restaurant was like walking into a morgue! No amount of marketing can change the personality of that restaurant. Only the owner/operator can do it. 

Remember the song from the sitcom "Cheers?"...."You want to go where everybody knows your name."

 What is the personality of your restaurant? Is it a direct reflection of you?

 Restaurant Start Up

Site Selection - The Principles...continued...

Below are the Principles of Restaurant Site Selection. Over the next several issues I will examine each one of these principles in detail.


  1. Know Your Operation - It goes without saying that you must know and understand your operation. Moreover, knowing your operation is a pre-requisite to any expansion you have planned. In fact, this is the strength of the of the food business. Food operators can usually recite and compare food costs, labor costs, controllables, and uncontrollables. Numbers are traded and widely discussed. Daily tallies, transactions, customer counts, meals purchased, and, hopefully, profits fill numerous notebooks. Nonetheless, as mundane as it sounds, you must truly grasp the complexities of your operation and accurately gage your management ability before expanding or starting out. Have you done your homework? If you are entering the food industry for the first time, have you studied successful food operations, and do you feel thoroughly familiar with their techniques? 
  2. Determine Your Customer Profile - Customers are attracted to any food operation for numerous reasons. As a food operator, you should know why your customers choose your facility. Also, identifying the characteristics of your most frequent customers is essential. Without such data, you are going into a fire fight with a BB gun. I am continually amazed at the number of food executives , responsible for spending millions of dollars, who don't really know their customer profile. At least once a week, a major food operator or officer of a major restaurant organization tells me his or her customer is "everyone." When I ask, "How do you know that?" the usual response is, "Well, I observe," or "My managers tell me." That is absurd! I cannot overemphasize enough the need to determine who your potential are, why they would come to you, or why they wouldn't come to you. One of the primary secrets for successful site selection is targeting areas with demographics that match your "most frequent visitor" characteristics.
  3. Delineate Trade Area - Numerous factors, including the following, dictate the size of a trade areas: Type of food facility, type of location, income, topography, competition, traffic artery, physical and psychological barriers, activity generators, consumer patterns, visibility (sometimes), and socioeconomic characteristics. Historically, restaurants have focused on a five-mile trade area, while fast food restaurants have settled on a three-mile radius. In many instances, these distances are realistic; just as often, however, they are not. It is important to analyze the type of location and the extent of the trade area  that might result from a new operation. In a major urban area a "special occasion" restaurant may attract customers fro 10 to 15 miles away, and rural locations with the right type of restaurant can attract customers in a radius of 60 to 100 miles. Moreover, fast food restaurants near major regional shopping centers often take on the trade area characteristics of the mall. In reality, trade areas are not rigidly round, square, or rectangular. Instead, they are positively influenced by the attraction of the restaurant and negatively affected by factors such as competition and physical barriers. 
  4. Establish Locational Criteria - Examples of locational criteria include the following: Types of locations, traffic arteries, trade area size, speed limits, number of moving lanes, adjacent uses, traffic flow, traffic counts, ingress, egress, visibility, competition, employment, topography, demographics, ethnic characteristics, and perhaps a liquor license. For someone who is starting a new operation and has no locational experience, the site attributes of other similar and successful food operations can provide very important guidelines. Examine the experiences of other operators and competitors. How have they fared? Where are their most successful units? Why are they the most successful units? What is common to their locational success?
  5. Analyze The Market Structure - Every market, whether it is a neighborhood, a small city, or a major urban area, has a structure that partially determines the extent of a trade area, the patterns that exist, and travel times. The structure includes the shape of the city, or an area, the road network, barriers (physical and psychological), income, topography, zoning, sewer and water availability, ethnic and socioeconomic characteristics, and climate. Structure plays a role in directional growth patterns, employment concentrations, development, eating-out patterns, and other factors that have generally influenced past and present development. Furthermore, the same structure is likely to influence future growth in the community. Understanding market structure is essential in selecting good locations for food facilities.
  6. Gather Factual Market Resource Data - Restaurant operators compete for eating-out or eating and drinking dollars, usually generated by resident population, traffic, daytime working population, or some combination of these groups. Market resources include population, socioeconomic characteristics, age structure, income, eating-out expenditures, lifestyle, and household size. Through an orderly procedure, you can determine the extent of the present and future market.
  7. Ensure Adequate Accessibility - Accessibility within a metropolitan area includes the ability of motorists to move from one part of the area to another. Locationally, accessibility represents the ease with which people move into and out of an area, and more particularly, in to and out of the specific location.
  8. Recognize the importance of employment - Many restaurant require lunch and breakfast business in order to be successful. Therefore, it is important for you to understand the employment patterns in your specific area.
  9. Identify Generative Areas - Generative locations means sites that are near major traffic generators such as malls, office buildings, hotel, industrial, and other commercial facilities.
  10. Clarify Attitudes, Trends, Habits, and Patterns
  11. Evaluate Competitive Facilities
  12. Understand Visibility and Exposure
  13. Estimate Sales Potential
  14. Evaluate Site Economics and Physical Characteristics


What's Keeping You Up At Night?


 Cleanliness is next to godliness, except in the employee restroom, where it is next to impossible.


 We are offering a FREE Restaurant Start-Up Checklist. Just send us an email at ProfitLineConsulting@gmail.com and request your copy.

Additional Resources Now Available On Our Web Site:





You can now read todays Restaurant Business News on our website .  


Additional "Tips" are now available on "Ron's Blog."



Follow me on Twitter @ronsantibanez. I post frequent tips and suggestions to Improve Your Profitability.


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Visit our web site RestaurantExperts.  You can view additional tips and techniques in addition to restaurant industry news that is regularly posted on our Profit Line Facebook page.


 We encourage you to contact us if there are specific subjects you would like to see addressed in "Ron's Tip Jar/Insights".

"Ron's Tip Jar/Insights" is a newsletter discussing issues that affect your restaurants profitability delivered by Ron Santibanez. You may also view past issues of "Ron's Tip Jar/Insights" by clicking here.

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For information regarding our start-up and profit improvement services, call us at 866-903-5875. You may also reach me by email at RonSantibanez@gmail.com



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