www.RestaurantExperts.com

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

October 17, 2012

 


In This Issue:

Tips and Things - Pricing Your Menu

Rules of Thumb - Payroll Costs

Restaurant Start Up - Site Selection..The Principles 

Five Steps To Customer Satisfaction

How Much Does It Cost To Open A Restaurant?

 


 

 Tips and Things

Pricing Your Menu

It is imperative that you know who your customer is and price according to his or her expectations. If your restaurant draws customers from a retirement community, their expectations will be different from those customers who live in an upper-middle-income residential area. You must also understand how your restaurant is perceived by your customers. Whether they view you as an "eat out" or "dine in" operation will impact the prices they are willing to pay. If your customers are on a limited budget for eating out during the week, they will look for low-price specials. Consequently, you must base your prices on what the customer is willing to pay and develop menu items that can return the profit you require to remain in business. 

Profits cannot be maintained by discounting items initially priced to return your desired profit. 

    


Thought For The Day

Turnover Happens.....

  


Rules of Thumb

 More Rules Of Thumb

Hourly Employee Gross Payroll

Full Service - 18 to 20 percent as a percentage of total sales.

Limited Service - 15 to 18 percent as a percentage of total sales.

 


Restaurant Start Up

Site Selection - The Principles

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

We begin with "Know Your Operation".

  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
  4. Establish Locational Criteria
  5. Analyze The Market Structure
  6. Gather Factual Market Resource Data
  7. Ensure Adequate Accessibility
  8. Recognize The Importance Of Employment
  9. Identify Generative Areas
  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

 


 Opening a restaurant isn't about being scared; it's all about being prepared.

 


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

Additional Resources Now Available On Our Web Site:

"HOW TO START A RESTAURANT"

"HOW TO DEVELOP A RESTAURANT BUDGET"

"7 WAYS TO CONTROL FOOD COSTS"


Five Steps To Customer Satisfaction

We continue with the five steps you can take to improve your customer service.

4. Follow Up

  • Be there. Commit to being  hands-on manager
  • Provide both positive and corrective feedback
  • Give feedback that is focused and specific
  • Praise in public but criticize in private 

  


How Much Does It Cost To Open A Restaurant?

The most frequently asked question I receive is, "How Much Does it Cost to Start a Restaurant?"

The answer is.....it depends. Asking how much does it cost to start a restaurant is like asking how much does it cost to buy a house. There are many variables and options that must be selected before you can attempt to come up with the answer. For example:

  • Fast Casual or Full Service
  • Free Standing or In-Line
  • Restaurant ready space or shell condition.
  • Landlord TI?
  • Hood or grease interceptor needed?
  • Size of space 
  • Interior finishes selected (options)
  • Type of furnishings selected (tables can range from $100 to $500 each)
  • Type of kitchen equipment needed
  • Menu concept
  • Liquor License
  • Staffing
  • Additional engineering needs due to facility issues

Completing a comprehensive feasibility study on a specific site or geographical location will determine the capital requirements and projected sales/profits & ROI of your concept.

For more information on this subject Click Here.

 


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.


 

We are now featuring our booklet "How To Start A Restaurant" FREE on our web site.  

Send me an email at Ron@RestaurantExperts.com if you would like a copy of our booklet, "How to Manage a Successful Promotion." Type "Special Booklet" in the subject line. 


  

Visit our web site RestaurantExperts.  You can view additional tips and techniques that are regularly posted on our Profit Line Facebook page.


Click here to view our feature page on our client, Salad Republic 

Please Visit Salad Republics New Website LoveSaladRepublic.com

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

Contact us at ron@RestaurantExperts.com


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

 


 

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