The Only Way Left for the Little Guy to Make Money in the Restaurant Business To make money in the restaurant business, restaurant owners have to have a competitive advantage, said Melanie Demming, manager of The Bistro. If hard work alone would do it, most restaurant owners would already be rich, she said. There are only two real and sustainable competitive advantages anyone can have in the restaurant business. Hilton Head Island, SC (PRWEB) April 14, 2006 To make money in the restaurant business, restaurant owners have to have a competitive advantage, said Melanie Demming, manager of The Bistro. After working for years as a waitress in many different restaurants and observing different managers, she had a wealth of experience to draw on when she became a manager. Here's what she learned that made her restaurant a success: If hard work alone would do it, most restaurant owners would already be rich, she said. There are only two real and sustainable competitive advantages anyone can have in the restaurant business. Restaurant owners can't always have the best chef. They could hire the best chef in town from a competitor, but another competitor could (and probably would) steal the chef away. Restaurant owners can't always have the best location. They could have the best location for a short time, but road construction, new building projects, population shifts all combine to turn any " best location" into less than an ideal location for a restaurant. Restaurant owners can't always have the best menu -- at least, not for long. Any recipe can be copied and probably even improved upon. Restaurant can't be the cheapest. That's the worst way of all to try to make money in the restaurant business. There will always be someone with lower prices that's going out of business -- they just don't know it yet. Restaurants that try to compete with the low-cost crowd may go out of business first. The only two real and lasting competitive advantages any restaurant owner can have are:
Jerry Minchey, editor of "Marketing Your Restaurant," said that taking advantage of these two things is, "The only way left for the little guy to get rich in the restaurant business." Peter Drucker (the greatest management author and guru of all times) said, "Innovation is the only lasting competitive advantage anyone can ever have in any business." He's right -- "Marketing" is just a sub-part of "Innovation." Marketing is the only thing that generates profit for a restaurant. Everything else is an expense. Marketing (when done right) is the best investment any restaurant owner can ever make. In the stock market or in real estate someone may hope for a 5% or maybe even a 20% return on their investment. But in marketing, a $100 investment in promotion (ads, direct mail, press releases, etc.) could bring in $1,000 in profit and sometimes much more. For example, changing only a few words in a headline could bring in two to 10 times more profit from the same ad. And the only cost to make the change was the time it took the restaurant owner to learn how to write headlines. What kind of return on investment is that? A restaurant owner can't make $100,000 a year doing $10 and hour work. Their job should be to market, innovate and promote their restaurant. The average restaurant owner thinks his job is to "run the restaurant." He doesn't have time to market his restaurant -- or even to learn how to market a restaurant. Maybe that's why he's average. The restaurant marketing plan for many restaurants is based on whatever the latest ad salesperson was promoting. When it comes to marketing, many restaurant owners just copy what the big boys are doing. That could spell disaster for an independent restaurant. Most restaurant owners work long hours, but it doesn't take long hours to market, innovate and promote a restaurant. (To learn more about how to drive a starving crowd to any restaurant, visit http://www.MarketingYourRestaurant.com and sign up for their free email "Tip of the Week" or take a look at their Sample Articles.) Restaurant owners should stop doing $10 and hour work and concentrate on marketing their restaurant. As Melanie discovered, "The only way left for the little guy to make money in the restaurant business is to market and innovate." Look at it this way. A restaurant owner who masters innovation and marketing could swap restaurants with any restaurant owner in town. Let him have the location, the menu, the chef and staff and a year from now the restaurant owner who knows how to market and innovate would have the most profitable restaurant. Melanie said, "I've learned to not chase the so-called competitive advantages that are short-lived and non-sustainable. Now I concentrate on Innovation and Marketing." For more information on "Restaurant Marketing" visit http://www.MarketingYourRestaurant.com Jerry Minchey, editor http://www.MarketingYourRestaurant.com # # #
|
© Copyright 1997-2012, Vocus PRW Holdings, LLC. |