CEO and Founder of the Profitable Restaurant Owner Academy, the ultimate resource in starting a profitable restaurant.
The restaurant industry is infamously tough on business owners with long hours, slim profit margins and relatively low rates of success. For others, however, the exponential increase in online delivery has opened up opportunities for new beginnings in the “new normal.” I know the difficulties that restaurateurs face firsthand, having spent the past five years developing my very own restaurant chain, which has recently been acquired. If my business experience has taught me anything, it’s that you have to make the most of every opportunity.
From this perspective, now is a better time than ever to start to turn your food and drink concept into a reality. Cheap rent and increased digital traffic are just some of the benefits, but a brave few are up for the challenge. Here is my signature ACE formula, the three steps to follow to give your business the best chance of success.
Before you run, you need to walk. Most people commit to a “great” food idea or concept before even knowing the specific product that they’re going to make, let alone the customer they’re trying to sell to. This creates false positives and misdirection, often leading new restaurateurs to their demise. You have to figure out your Why first and foremost. Without one, it’s very difficult to run your business. Your inner motivation and goal destination need to be clear so that you can be aligned to yourself, your team and your concept, even when in the trenches.
Aligning yourself and your business values gives you the perfect mind space to dominate in the marketplace. Knowing your angle and the customer you want to serve helps you provide the perfectly tailored menu offerings that customers will eat up. If you fake it, customers will know and lose interest fast. Sitting down to find alignment also gives you a clear marketing strategy in a super competitive industry. The reason why most budding business owners don’t do this is because they are just focused on short-term profits of running promotion after promotion. The only way to achieve your long-term vision is to align every aspect of your business toward accomplishing those goals.
A great real-world example of this concept is Chipotle. When you think of Chipotle, you immediately think of health-conscious menu items made from sustainable produce and protein options — all of this in a quick grab-and-go format. The company knew that millennials are attracted to conscious consumption and motivated by convenience and aligned their entire business model accordingly. This committed brand direction paired with its simple production model allowed for explosive expansion, resulting in a beloved household name.
At its heart, the restaurant industry is all about connecting with others through food. True connection builds real relationships, both with your team and your customers, creating a supportive and loyal community rallying around you and your business. If you jump right into running promotions before connecting with your customers on a deeper level, they won’t feel understood or welcomed by your business.
I recommend creating a customer avatar, your ideal customer, to understand their likes, dislikes and motivations. Conducting research and surveys can help you identify this person, so you can speak their language and nurture them into a loyal customer who will come back again and again. This even goes beyond the food or drink concept. Get involved with local events and engagements to really establish your spot in the community.
Maybe more than anything, it’s important you connect with your team. Find people aligned with your values and the culture you want to create. Make sure every member understands your vision, goals and expectations. If you support and empower your team, they will do the same for you and your business, so you can have your preferred autonomy.
Explosive results only come after alignment and connection, as those are the foundations for building your successful business and preventing poor experiences. Without those steps, there’s no traction; people buy based on trust. By ensuring quality customer experiences, you ensure positive reviews and recommendations.
This is where marketing comes into play in the form of ads, influencer campaigns, PR, promos, etc. Many restaurants jump into this stage too soon, copying promos without understanding why or how to do so, losing money and negatively affecting their brand image. When you are ready to scale up your marketing, collaborate with other brands or local organizations that are relevant to your ideal customer and/or are aligned with your business and vision. Profitable collaborations will expose your business to new customers and diversify your revenue streams. Explosive traction doesn’t come from one single business strategy, but if done right, will set you up for years of success.
When the pandemic hit, everyone shut down. As we’ve seen businesses reopen and re-enter the marketplace, there are a few clear strategies to ensure continued success. Optimize your offers and digitize your company. Third-party delivery apps may seem like the enemy but, if used properly, can be a lifeline for your business.
This ACE formula isn’t foolproof, but stacking these proven business strategies correctly can generate a predictable and loyal customer base, multiple recession-proof revenue streams and a strong business foundation that generates great cash flow and attracts prospective buyers.
Forbes Business Council is the foremost growth and networking organization for business owners and leaders. Do I qualify?