By David Scott Peters

I’ve talked to a lot of restaurant owners who are looking to expand their businesses these days. With deals on real estate and low interest rates, it could be the right time for you, too. Before you make any moves, make sure your systems, concept and numbers work before you expand.

The systems

Many independent restaurants are successfully built on the premise that you — the owner — are on the floor, in the kitchen, managing the books, greeting guests, etc. The problem with this situation is that the business is dependent on YOU!

If you expand under this scenario, your original location will ultimately suffer. When you remove yourself from the floor, a void will be felt in direction and leadership. And your customers will notice you are not there to touch tables. But with operational systems in place you have the ability to work on your business, not in it. With systems you empower your management. Not only do they know what to do, they know how to do it and how to get it done. In addition, your guests have married the idea that your managers are the people to know, not just the owner.

And on top of that, systems create a paper trail, allowing you to monitor your managers and ensure they are doing their jobs, making it easier for you to monitor multiple locations. 

The concept

Assuming you know who your customers are (you’ve been collecting their email and mailing addresses for marketing and customer loyalty purposes), you can contact a list broker such as InfoUSA.com and ask them to tell you about your customers by giving them your list. They will be able to tell you an incredible amount of demographic information. With this data in hand you can start to look for other markets where the population matches your current customer demographics.

Other things to look for when picking a new location for your concept:

• Traffic patterns – are you on the going-to-work side or the going-home side of the rush hour?
• Traffic drivers – are there other businesses nearby or next door that cater to your demographic?
• Other restaurants – while many operators feel like having a lot of other restaurants around you is a bad thing, I think they are a benefit because they make your block a destination for dining out.

The numbers

When it comes to the numbers, I want to bring to your attention the the things that are probably the most important:

1. Design costs: Designing your new restaurant can be exciting because it’s finally the chance to fix everything that doesn’t work in your current location. While fixing these current issues can be critical to making your new location work, many restaurant owners fall victim to what I like to call “The Taj Mahal Syndrome” or TTMS for short. It’s when you see all those people waiting every weekend to dine in your restaurant and you think that if you build bigger, they will come… you build your Taj Mahal! But building bigger means higher debt service, which can kill a restaurant faster than anything else. And building bigger can give the impression of a less popular restaurant if there are more seats to fill and fewer butts to put in them. This will cost you, too. The key to designing your next location is to not forget about what made your customers fall in love with your concept in the first place and then modify for efficiencies after that.
2. Debt service: With a second restaurant you have greater corporate or overhead costs. While you think you can do all of this on your own, I’m here to tell you that you’re underestimating how much time two locations are going to require from you. As you put together your business plan, make a 5 percent to 10 percent allowance from both restaurant budgets to take care of expenses.
3. Cash flow: Profits don’t pay your bills, cash does! I can’t tell you how many great restaurants I’ve seen go out of business because of the cash flow demands of the second restaurant. Managing the flow of cash in and out of one restaurant is often the key to its success. Imagine that times two.

Moving forward

When you look at your business and determine that it’s time to expand, it can be extremely exciting. With that type of exuberance you need to tackle your business plan to make sure this is the right move for you. Make sure your restaurant’s success is not dependent on you alone, that your concept has legs and the numbers work. Most importantly, also remember that while all these are really important, nothing can replace being a good operator.

David Scott Peters is a restaurant expert, coach, trainer and speaker, specializing in teaching independent restaurant owners how to use systems for increased sales and increased profits. He is the nationally acclaimed restaurant coach whose unique “SMART Systems” approach to boosting profits has earned him the title of, “The man who can walk into any restaurant in America and find $10,000 in undiscovered cash before he hits the back door – Guaranteed!” Visit www.TheRestaurantExpert.com for more. Learn more tips, tricks and secrets in David’s free five-part e-course, “How to Explode Your Restaurant Profits NOW!” Simply sign up to receive the e-course at TheRestaurantExpert.com.

By David Scott Peters

Make your restaurant fun and profitable again

I teach independent restaurant owners how to use operational systems to be more efficient and to position themselves to compete with the chain restaurants around them. But running a successful restaurant goes beyond systems. It requires the right attitude as well.

You work hard every day to make your restaurant a success. But if you’re not having fun, do you think your employees are? So give yourself a timeout and see if your restaurant could benefit from implementing any of the following ideas. I know you can make your restaurant fun and profitable again.  

• Appreciate your guests. There is an acronym in the industry that focuses on putting your customer first. GUEST stands for greet, understand, educate, satisfy and thank. Without your guest, you have nothing, right? So show them that you appreciate them and that you appreciate that they want to spend their discretionary income in your restaurant. Make them glad they chose you to do business with.
• Appreciate your employees. One of the best ways to make work fun is to make it fun for everyone who works with you. And you can make coming to work and being at work more fun in the way you treat your employees.
• Try some new and inexpensive marketing ideas. When you’re lean on cash and can’t afford a lot of advertising — outside your four walls — I encourage you to look inside your four walls for advertising opportunities, also known as four-wall marketing. You’ve got them in your doors, now you need to tell them what you do. Give them more reasons to come back. 
• Increase the chatter. Teach your employees that they have everything to do with how much money they make. If they simply take orders instead of taking an opportunity to sell with each order, it’s their bank account that suffers. If they can increase ticket averages, they can increase their take-home dollars. It’s the art of the upsell.
• Create a little competition. Develop server incentives and contests that encourage upselling and increase sales. Not only teach them how to upsell, but pick items, whatever it is that you want to sell, and create a concept, something fun. For example, the server who sells the most specials one night gets the prize. Or whoever sells the most bottles of wine in one night wins. Get them to compete with each other, increase their ability to sell, increase their average ticket. They make more money, you make more money. It may have cost you a little bit of money to put up, whether it’s a cash prize or movie tickets or whatever, but it’s a lot less than advertising. And it fuels great customer service, giving your customers the feeling that they’re special.

You spend a lot of time inside your restaurant’s four walls and so does your staff. But it shouldn’t be a struggle. A few simple things can make work fun again. I challenge you to implement just one of these ideas and see the response you get from customers and employees. If it works, let me know.

David Scott Peters is a restaurant expert, coach, trainer and speaker, specializing in teaching independent restaurant owners how to use systems for increased sales and increased profits. He is the nationally acclaimed restaurant coach whose unique “SMART Systems” approach to boosting profits has earned him the title of, “The man who can walk into any restaurant in America and find $10,000 in undiscovered cash before he hits the back door – Guaranteed!” Visit www.TheRestaurantExpert.com for more. Learn more tips, tricks and secrets in David’s free five-part e-course, “How to Explode Your Restaurant Profits NOW!” Simply sign up to receive the e-course at TheRestaurantExpert.com.

By David Scott Peters

Restaurant Tip of the Week

Make a special event and holiday checklist

Piggybacking  on the tip, “Plan for the Big Day – Part 1,” develop a checklist so you’re prepared to maximize any big day. Your restaurant/bar has its own unique customer draw, and you need to keep that in mind when creating your special event/holiday checklist. Your checklist should include your expected sales volumes, how many covers or customers you’re expecting for the event, any special decorations you’ll need and where they are located if you already own them. Include any special licenses or permits you need if you plan on extending out into your parking lot to serve liquor, and/or any additional fencing or barriers needed. The checklist should also list any special menus, ingredients, liquors, wines or beers needed to make the event a success.

David Scott Peters is a restaurant expert, coach, trainer and speaker, specializing in systems for independent restaurant owners. He is the nationally acclaimed restaurant coach whose unique “SMART Systems” approach to boosting profits has earned him the title of, “The man who can walk into any restaurant in America and find $10,000 in undiscovered cash before he hits the back door – Guaranteed!” Visit www.TheRestaurantExpert.com for more. Learn more tips, tricks and secrets in David’s free five-part e-course, “How to Explode Your Restaurant Profits NOW!” Simply sign up to receive the e-course at TheRestaurantExpert.com.

By David Scott Peters

Location, Location, Location…
What does that mean for your restaurant?

How do you find the right location for your new restaurant? How much rent can you afford? Who do you turn to for help?

These are important questions that require serious attention when finding that perfect location for your dream restaurant.

To find the right location, you must first know the details about your potential customer, otherwise known as their demographics. Things to consider include where they live and work, or whether they are retired? You need to know how much money they make a year and what kinds of jobs they have. You also need to know whether they live in an apartment or a house, own or rent, own a car or take public transportation. Also, does race or gender play a role for your business’ success?

When looking for that perfect location, price per square foot is the major factor. Getting in over your head with real estate will start your business down the road to failure. A good rule of thumb is to try to keep your total debt service and occupancy cost down to 8 percent of sales and no more than 12 percent for a multimillion dollar business.

Once you know this critical data, you need to hire real estate professionals. You will want to make the investment in hiring both a commercial real estate broker and a real estate attorney. They each play an important role in finding and negotiating a lease or purchasing a property.

A good commercial real estate broker is going to save you time and money. He or she will ask you a series of questions about who your customer is and most importantly what kind of revenue your restaurant is projected to bring in a year.

When it’s time to negotiate a lease or buy a property, the money you invest in your attorney can be priceless. Their job is to help you navigate through the one sided leases landlords have and if you’re buying the property they make sure the appropriate environment studies have been done so that you’re not stuck with a piece of property where a restaurant can’t be built.

So before you go out looking for that perfect location, make sure you know who your customer is, what you can afford and then hire the best commercial real estate broker and attorney you can find. Don’t try to do it all yourself — leave it to the experts and focus on what you know.

David Scott Peters is a restaurant expert, coach, trainer and speaker, specializing in systems for independent restaurant owners. He is the nationally acclaimed restaurant coach whose unique “SMART Systems” approach to boosting profits has earned him the title of, “The man who can walk into any restaurant in America and find $10,000 in undiscovered cash before he hits the back door – Guaranteed!” Visit www.TheRestaurantExpert.com for more. Learn more tips, tricks and secrets in David’s free five-part e-course, “How to Explode Your Restaurant Profits NOW!” Simply sign up to receive the e-course at TheRestaurantExpert.com.

By David Scott Peters

Restaurant Tip of the Week

One brain is not as powerful as 20 together

A mastermind group is a group of peers with whom you can bounce ideas around without fear of judgment, exploitation of your ideas or sabotage. In a mastermind group, you surround yourself with like-minded people with different skill sets who keep the flame and spark lit under you as you tackle the challenges in your business. They also help you think outside the box because they bring different perspectives and experiences. As an independent restaurant owner, it can be a lifeline and important touch point.

Members of TheRestaurantExpert.com belong to mastermind groups. If you’re interested in finding out more about membership, please let me know. You can also visit this site.

David Scott Peters is a restaurant expert, coach, trainer and speaker, specializing in systems for independent restaurant owners. He is the nationally acclaimed restaurant coach whose unique “SMART Systems” approach to boosting profits has earned him the title of, “The man who can walk into any restaurant in America and find $10,000 in undiscovered cash before he hits the back door – Guaranteed!” Visit www.TheRestaurantExpert.com for more. Learn more tips, tricks and secrets in David’s free five-part e-course, “How to Explode Your Restaurant Profits NOW!” Simply sign up to receive the e-course at TheRestaurantExpert.com.