Coupons: The Good, The Bad, The Evil

Many restaurants have started to base them selves off of coupons. This in some ways may be a very successful strategy depending on what type of business you are in, but it may also hurt you. One way it may hurt you is it almost makes you look like a lower end store, or discount store. In some cases I guess thats what you may be striving for, but I know for many thats not their goal. Also you are creating customers who come in when you give them coupons but what happens when you no longer are using coupons, do they come back, or do they simply just go to another place that is using them. Now in the food industry it is not hard to replace one place with another, so if they are strictly coupon customers, do you really want that business? Also it is extremely hard to get a read on whether or not the customer was all ready a loyal customer or new. This could be a problem in a few ways, if they are not a loyal customer they fall into the coupon customers and will not be back, or are expecting you to keep prices at that range. Also you could face problems if it is a loyal customer, because they were willing to pay the full price, but instead you gave them a coupon and now you do not have as much profit on the item as you could. Now this does not mean that coupons are always bad, there are always times where a coupon can add value to your restaurant. Some places are very seasonal or tourist based, offering a coupon to draw people in is not a bad idea. For example, while in Rome Italy this summer we were walking around the Coliseum looking for somewhere to eat and the guy handing out coupons for a special deal on lunches was the winner. He knows we may be back a couple times in out life, but he is not worried about me not paying full price, because without it I probably just walk by. Also frequent user coupons can be extremely useful. Rewarding the people who do come in often with a discount or a free item can and will work, it makes them feel special and meaningful, and to some people that can be the difference in going to one restaurant or the other.

Tips to Opening a Successful Business

Everyone has heard or seen the stats that every year about 50,000 new business get opened and that 5 years from that date only 5,000 of them are open. Everyone has a good idea or a great recipe that they feel they can create a business around, but there is so much more to it then just a great idea. I am going to give you some of the top tips you can use to make sure you are part of the 5,000 and not the other 45,000. First, the most important concept in opening a business is no secret to anyone, location. When you hear people say location, location, location, there is a reason. Certain business will work in certain areas, and vice versa. Also you need to make sure you understand the demographic of the community and area you will be opening your restaurant. For example, I live in a smaller community with about 35,000 total people. There are your typical fast food restaurants, Mcdonalds, Burger King, and Tim Hortons. When Starbucks decided it was time to move in they were extremely unsuccessful. Our community is not willing to support a high end, corporately ran, coffee shop, when 1 mile down the road there is a cheaper more community based coffee stop. Another problem a lot of the business that fail run into is bad financial planning. When opening a restaurant you better have it planned that you will be able to take a few financial hits for the first year or so. Every store will not have a line of people waiting to come in when you first open. Everything takes time these days, and you better be willing to tough out a few bad times to be able to see the good. Finally the most important aspect I feel many do not understand about opening a new business is loss of time. If you plan on opening and running a successful business you better understand that you will be loosing lots of personal time. Your life from that point on will be directed at that business. If opening a successful restaurant, you have to be willing to be open and working on the days the rest of the city is not. When holidays come around and people are off of work, you better be there, because they are looking for somewhere to go and you want to be that option. It takes a while to build a customer base, but it can all be lost very fast. It only takes one bad experience or one better experience at a different restaurant to make them not come back to yours.  

Recession Challenges

Although the Recession may not be as bad now as it was 2 years ago, we are still in a time where money is tight. When the economy goes down, one of the first divisions of business that will take a hit is the restaurant business. Now depending on what kind of restaurant you run you may experience different effects then others. For example, I my self run a lower priced fast food restaurant and do not feel the recession had to much of an effect on our sales. I can also say that companies such as McDoanlds who actually profit more during recessions did not due to bad as well. When looking at higher end, higher priced restaurants you may be able to see a difference. Restaurants are part of an industry where there are lots of different options, and when money is tight, the option for consumers is usually lower price. Although that is one of the main things that comes from recessions, are there any more problems we may face after this one has come to an end. If you take a look at past history, inflation always tends to go up after a recession. Whether it be cost of materials rising, or the biggest cost of employees. The cost of employees after this recession is over is going to be the major problem everyone faces. With Obamas new health plan, employers can expect to be paying high amounts for benefits. One thing that many suggest, hire more part time help. To get around paying for the high benefits cost, I feel as if a trend of more short time help will be around, rather then less long term help. Certain companies all ready take a lot of grief for these practices to this day, such as Wal-Mart, but looking at it from a business stand point, I don't see how you can argue that this approach is not correct. Cost of employees will drive everything up, causing prices to increase and customers to leave, creating more part time jobs instead of full time jobs, even though it may not be the best humanitarian thought, may be the best business approach.

Dumpster Diving

Business owners are always looking for ways to find extra money, or new tactics on how to save a few dollars on cost. Many look at employes, can you fire a few employees and still get the same numbers? Can you hire more employees and create more revenue? What about cost, is there a way you can lower something such as waste? Well waste is a huge part of the bottom line. What is being thrown away, what can you do to create a better bottom line. A very good system but not always the most commonly talked about and maybe sanitary idea, go through the garbage. Every once in a while maybe you should take a certain time and decide you are going to search through the stuff that is thrown away in your store. Try breaking them down into different sections, such as know which trash is your behind the counter trash, and which ones are your lobby trash, and which ones are your bakery or kitchen trash. It is amazing what you cold find from just searching through minor things like that. Are the cooks or bakers throwing away stuff that could be reused again for a different product? Is the staff behind the counter using to many paper products for personal use? Are customers throwing out certain parts of a meal? Are you providing the customer with too much of a certain meal? These are all things you can find by simply looking at the trash that is coming from your business. It not a glamorous way to improve your company, but who cares, if it works it works.

Restaurants and Social Media

Times are changing and so should business marketing. Marketing has shifted heavily towards Television and Internet and away from the radio, why? well its due to the users. There are more people getting information from the Internet and TV then there are the radio, it is just due to the advances in technology. So the real question is why is everyone behind when it comes to social media? Facebook, Twitter, and Myspace are some of the fastest growing trends ever. It took the radio 34 years to reach 50 million customers, the TV 14 years, and Internet 4, but Facebook gained 200 million, yes 200 million not 50 million, in one year. There are currently 515 million registered users on Facebook. People are spending more and more time on these sites due to advances in mobile phones, and items such as the Ipad. Social Media is becoming a way of communicating, instead of calling or texting someone, you chat on Facebook. When you go to a Restaurant and the service is terrible, you better believe Facebook and Twitter will know about it. That also is true for the other side too, if they have great service, they will most likely post their thoughts on Facebook and Twitter. If you are one of those people who believe these are just fads and will die out, you are wrong. This is a new age of marketing, and if you miss out on it, you could be in some real trouble.

On the bottom the page you will see some video post, watch the clip Socialnomics, it is 4:30 long and very interesting.