New Restaurant Sizzles

27-Mar-2013

 

 

 

The Backstory

This first time business owner wanted to leverage a passion for food and a successful corporate finance career into a new restaurant venture. He envisioned a  friendly, local hangout with exceptional food. His foray into hospitality and entrepreneurship did not start well; a severely delayed opening drained his funds and his first chef did not work out. Given his financial background, the owner had a good handle on the menu and food costs, but was nervous as to whether his money was going to last long enough for the business to grow. By the time he opened, he had no funds available for marketing  and unrealistic expectations about revenue growth.

The interior of the restaurant is modern, bordering on cold, with a bar area disproportionately large for the restaurant size. Liquor sales, as compared to food sales, did not reflect the bar size, either.  Weekend business was starting to grow organically as was Sunday brunch, however weeknight business was not gaining traction.


The Challenges
Without capital reserves or a marketing strategy, the owner was experiencing slow growth. An inexperienced and inadequate service team was underperforming and average checks were hovering  at the low end at around $20. Lack of funds and business also forced the owner to close for lunch two days each week.

 

The Plan

Increase average check through sales training and price increases
Focus on improving sales during specific days and day parts, including:
  Wine Down Wednesdays
  Bounceback cross promotion of lunch and dinner to existing customers
  Promote large group lunches to community organizations for off days
Build bar crowd
  Take advantage of large bar seating by creating and promoting Artisan cocktails
Create a more inviting atmosphere
  Improve lighting
Internal promotion/management
  Create daily journal to track sales/events/weather 
  Table tents promotion
  Loyalty program/email capture
Create annual marketing/promotional plan

The Results
Over a period of four months:
Monthly revenues more than doubled from month 1 to month 4.
Average check increased by 47%
Lunch/dinner bouncebacks enjoyed  a 14% redemption rate
Grew wine sales on Wednesday by over 200% on Wine Down Wednesdays
Customer service training resulted in tip outs (based on charge card receipts)
increasing to an average of nearly 18%
New lunch groups booked and restaurant now opened 6 days/week for lunch

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