In this article we have combined the hottest topics: what prevents restaurateurs from earning, what formats of establishments are more popular and how emotional marketing can improve your business.
Problems of the restaurant business in 2019
As in any other business, there are key points due to which institutions are most often closed, and no matter, this is a small coffee shop or restaurant with 200 seats. From year to year, some reasons may change, but there are those that remain unchanged. Main problems:
- Location. No matter how you praise your kitchen or concept with a perfect design, unfortunately, this does not guarantee good attendance. You need traffic that is highly dependent on location. In Ukraine and Russia, remote or suburban restaurants are still unpopular, so the key to success for most institutions is renting a room on the streets with good pedestrian and car traffic. Few people – no profit.
- Rental price. Perhaps this reason in importance is equivalent to an unsuccessful location. By laying a fixed amount of rent in a business plan, beginning restaurateurs forget about the deadlines. And after the next rental rate increase, their establishment ceases to be profitable. Moving is also unprofitable, and in the end you have to close the cafe.
- Lack of ideas. If we talk about cafes, restaurants of the middle and high price segment, then simply cooking deliciously will not be enough. Guests want something more than dishes, they come for an atmosphere, quality service, a pleasant and interesting interior, where they are comfortable to be. Also, the kitchen should “fall into” the concept in order to impress the potential customer and make him come to the restaurant again and again. When this is not in the institution, you can only rely on people who want to just have a bite to eat, and they don’t care where. But why then open a restaurant, if normal fast food is enough for this?
- Lack of marketing. Most hope and hope for everyone’s favorite word of mouth. Yes, this is undoubtedly an important factor, but reaching the payback point, counting only on it, can be done two times longer. Not everyone is ready to wait five or more years until their cafe pays off and begins to generate net income. Therefore, you need to engage in marketing constantly, and not only at the time of launch and before the appearance of the first loyal guests. Paid advertising in social networks, promotions in the menu, promotion campaigns and loyalty systems should work constantly. More details can be found in our article “ How to advertise a restaurant on the Internet”.
- Low quality of service. This is a fairly common problem, because of which even successful, at first glance, projects are closed. Frequent staff changes and ongoing training of new employees negatively affects the level of service. Therefore, even large restaurants with their careful approach to staff selection and staff qualifications suffer from staff turnover. Sometimes even an unfriendly attitude of waiters and bartenders towards guests is enough for all your efforts to develop the restaurant business to be destroyed in one moment.
The restaurant owner must monitor the selection and training of new employees and constantly check the old, and not completely “push” these responsibilities to the manager.
Below we will look at how to deal with these problems through emotional marketing .
What brings restaurateurs the greatest income?
Oddly enough, this is not alcohol and not delicacies, as many beginning restaurateurs think. Recently, we conducted a large analysis of anonymous sales statistics for various types of establishments, as a result of which we found out which menu items have the highest margin, where there are less food prices and which dishes can be considered the most profitable according to the results of 2019. Perhaps this will help to understand what it is worth focusing in the new season.
A more detailed review can be found in our separate article “ How Restaurants Make Money ”.
Calculation of profitability of a restaurant
After a novice entrepreneur finds out about a large margin in the restaurant business, he immediately wants to open an institution and start to “row” profit. Unfortunately, everything is not so rosy, and, if you look in more detail, the restaurant industry is far from the most marginal. And just because of this extra charge the restaurant can be made profitable given the many expense items. In Russia and Ukraine, the profitability of a restaurant and cafe usually does not exceed 30% , but even an institution with a profitability of 20% can be called a successful project.
We have compiled a profitability chart for you. Of course, these are average values, and the organization of the restaurant business depends on the format of the institution, its concept and marketing strategy.
In order to understand the approximate volume of investments, it is customary to consider the price of the area of a room in the restaurant sector. For example, for cafes and bars of the middle segment in cities with a population of over one million, it is higher – from $ 1000 per square meter . In regions, the price may be lower due to lower rental rates.
Trends in the restaurant business in 2020
Now back to what awaits us in the coming year.
Delivery from cafes and restaurants
Delivery – the most important and relevant trend of recent years, will only increase in 2020. Especially if you plan to open a sushi bar or pizzeria, this option is simply a “must have”. Without it, it will be extremely difficult to compete and, accordingly, quickly reach a payback.
More franchised establishments . Beginning entrepreneurs do not want to risk their project, so starting a business according to a successful and stable model looks much more attractive, which is confirmed by statistics of open catering establishments.
There are less universal sushi – pizza – hookah – karaoke restaurants. More and more often, guests prefer to such establishments more focused cafes, pizzerias or hookahs – places where they cook their favorite dishes are really delicious.
Fewer people are willing to be content with average quality in such supermarket restaurants, often for the same money as in cozy, atmospheric establishments. Hence the conclusion that it is worth focusing on single products: burger, pizzerias, etc.
Pastries and sweets
More bakeries and pastry shops . Fresh baked goods are in demand year-round, and such establishments can be placed both in sleeping areas and on the main streets with a lot of traffic.
The trend of the last few years in retail, when large offline stores are switching to online sales and vice versa, as Amazon has shown. Multichannel in catering is also a combination of online and offline sales. Most offline establishments that have already taken it into service, effectively use their resources to increase sales, offering customers not only to visit the institution, but also to order food at home, or place an order and pick it up by ourselves.
For example, if you use the automation system of the restaurant Poster, then you can connect the Poster Shop – a fully integrated online storefront of your institution, and start accepting online orders!
Craft drinks and dishes
An interesting and fresh trend of “craft” in everything: dishes, glasses and drinks. This is not only a fashionable phenomenon, but also a creative approach to reduce costs. Prices for imported products in Russia and Ukraine are constantly growing, and by 2019 the difference has already become almost 3 times. A couple of years ago, restaurateurs who wanted to stay on the market, reviewed their menu options and tried to switch to those products that they could afford in the new conditions.
The fall of national currencies led to an internal reorganization of restaurants and active processing of the menu. But it also became the reason for the transition to local products, not only the economy, but also the premium segment.
Local products are a great alternative to imported counterparts. If earlier restaurateurs rarely looked in the direction of local farmers, now their time has come. Given the unbearable prices, the previously inflated prices of local manufacturers now look like an extremely beneficial cooperation.
A large number of new breweries and even craft brandy, whiskey, gin and, of course – tinctures , a lot of all kinds of things appeared. Now only the laziest does not add a couple of types of strong “home” alcohol to the bar card. Tinctures themselves are most often made on the basis of vodka or the same craft whiskey with the addition of various juices and syrups. Served both hot and cold, depending on the time of year. The cost of such a portion of 50 grams is 15-20 rubles (5-6 hryvnias), and on the menu they are set in the region of 100-150 rubles (35-50 UAH).
National and regional cuisine
The trend that we have firmly “settled.” In many cities of Russia and Ukraine, restaurants of national and local cuisine are opening in quite interesting interpretations: coffee shop, pub, pastry shop and fast food.
Georgian cuisine is especially popular. Almost every second restaurant of national cuisine, opened in 2019, is Georgian. Khachapuri, khinkali, suluguni in pita bread, dolma, lobio, khinkali and kharcho – all this is very tasty, clear to the guest and easy to cook from local products in our countries.
Now is a good time to open a small family-run and hearty restaurants with great food. For example, as a family from a small town in Kazakhstan did, the story of the opening of The Beze cafe . Due to competition and increased rents, trendy “designer” restaurants are gradually leaving the market, where interior designers and not cooks made their names. At a time when investors were still able to pay it. Now, people are no longer ready to take that risk.
Casual segment and healthy eating
Fast-casual restaurants are opening up more and more , a popular format for those who like healthy food but don’t like to wait long. In such establishments, guests receive food similar in quality to expensive restaurants for little money, and the service here is slightly better than in fast food.
We will talk about the latter in more detail, since it affects absolutely all the processes of the institutions – starting from saving on products and ending with the level of service.
- What should be the institution so that guests return there and recommend it to friends?
- How to properly set up restaurant management and “survive” in the market?
Attracting a guest to an institution for the first time is a fairly simple process. It is worth considering a strategy, allocating a budget and implementing an idea – and for the opening you will gather a lot of guests. And then the hardest part begins. After all, to make guests return and recommend the institution to friends is a daily work. Victoria Reinikova , restaurant consulting expert at Bureau Business Ideas , shared her thoughts on what to do and what to focus on .
What should be the product
What you need to do to ensure that your product satisfies not only the guest, but also you as the owner:
- Start by positioning your establishment. You must give the institution a clear definition: for example, you have an Italian restaurant, a bakery or a snack bar. Remember: your positioning will influence the expectations of visitors. A guest who wants khinkali for lunch will not go to an Italian restaurant, he will look for Georgian. Thus, you define sales plans and assortment of menus.
- Next, determine the type of your guest. Answer the questions: why does he come to you, what can you offer him? Your menu should have an anchor product. Without it, you have no chance to survive in the restaurant business. When you post a marshmallow cocoa photo on your institution’s Instagram, think: why would a guest go specifically to you for cocoa if it is sold in every cafe? Build your menu as a sales funnel. Create a trap – a product for which guests will definitely come to visit you. Further, the “anchor product” will become a necessity, an occasion to return and the basis of your profit – a product with high profitability that you can sell to each guest.
- When forming each dish, remember about positioning and determine the objectives of this dish. For example, the task of a restaurant is to sell several dishes and dessert. The composition of each dish should be without satisfying carbohydrates so that the guest has a feeling of hunger and he does not change his mind about eating the main dish. If we are talking about the format of a cafe, then the guests there, on the contrary, are not ready to spend a lot of time and spend more money. Therefore, one dish should be hearty enough. For an active adult, 400 grams of food is enough to saturate the body. When drawing up a technological map of a dish, consider the nutritional value of each ingredient – then your menu will become a reliable marketing tool.
In establishments where the check provides for one dish according to the sales plan, it is necessary to add complex carbohydrates: couscous, bulgur, quinoa, green buckwheat. Add more bread. Many cafe formats can afford the use of bread in salads and a large amount of sauce. Sauces are better to take liquid, based on oil or yogurt. Such a little trick will visually and actually make the dish bigger, but at the same time it will slightly increase the cost.
It is important to combine the ingredients correctly so as not to interrupt the main flavor. For example, if it is a salad with salmon, then cereals and bread should not interrupt the taste of fish. And additional ingredients in the form of vegetables (fiber) should only enhance the taste of the main one. This composition of the dish can also be attributed to the sales funnel.
Each of your decisions should cause emotions in the guest
Pay attention to slicing and its types. Ragged poultry meat will look visually larger in a plate than a piece of fillet. Just by changing the cut, you can optimize the expensive ingredients on the way out. Do not spare the sauce and cream in the desserts, the cakes should not be dry. Believe me, this greatly affects the emotions of your guests. After you have brought each dish to the composition you need and decided on the slices, take time to serve. There are many ways that will help you surprise your guest and be remembered by him.
Before you buy dishes or change them, buy one copy and test. In the plate with the sides, the dishes seem huge – so you can use deep bowls to be advantageous. The dishes should be pleasant and not cold. It is not necessary that she be all from one set. Buy different, mix, choose where your dish looks the most advantageous.
You also approach the issue of pricing from the emotional side of the guest: what emotions will he experience when he finds out the value of your dish? Do not ignore the restaurant market, your colleagues and competitors. In many establishments, the menu has the same dish – no need to overstate or lower the price to highlight it. Make it memorable.
For example, almost every coffee shop has cheesecakes on the menu. Analyze what your competitors are and make your own others. If everyone has a full plate of small balls, try making one or two large balls, and vice versa.
The cost of your meals is adjusted after the sale price is approved. Level it out with additional sales with high profitability. Try to maximize the use of local products: root vegetables, roots, local herbs and vegetables.
You should be very tasty, but how to understand it? Develop your taste buds. Take any dish for analysis for one month and try it every day in different institutions. Try to lay out its composition in the language. Analyze your feelings, write them down. After 20-30 tastings, you will become an expert on this dish. If possible, try to devote maximum time to this analysis. You, as the creator and leader of the business, like no other, should know what is really tasty.
When you learn to understand food, it will be much easier for you to determine what the mistake of your cooks is, where they misfired and what processes need to be strengthened.
The number of items in the menu
The propaganda of the majority of consultants and restaurateurs is as few menu items as possible. But it is not so. Much depends on the concept. To affect the guest’s emotions, you need to play very carefully with the number of items on the menu. A large selection of dishes can also be convenient.
There is a standard menu structure. For example, salads should be such: vegetable, fish, meat and poultry, perhaps another “branded”. And so for all categories of dishes. Also, during audits of many metropolitan establishments, experts from Bureau Business Ideas came to the conclusion that if the menu has classic positions (Caesar or Greek salad), they will always be sales leaders, and original dishes are less popular or often go for cancellation.
Therefore, before planning the content of the menu, decide on the positioning. If you use classics, then do it everywhere and to the maximum, without copyright dishes. Or, on the contrary, refuse it and give the guests a completely new offer.
It is important not to forget about trends and changes in people’s nutrition. Add a small selection of dishes for vegetarians, athletes, people with special nutritional needs to the menu – they will be one of the most grateful guests, this will cause only positive emotions. And when you create an emotional menu, you can not do with a narrow range. Guests want to choose. You can’t stop them with just one soup. And no matter what positioning you choose, it’s important that it fits harmoniously into the overall concept.
Guests buy not only a product, they want more: atmosphere, smile, reaction to their requests. And to establish this process in the institution is no less difficult than the rest. The task of the owner or manager is to create such an internal atmosphere that the staff enjoy their work.
First of all, you yourself must love people. And broadcast this love to your environment. Caring for a guest should be sincere. And you need to start with caring for your staff. The waiter should not work with the emotions of the guests on the checklist, he should feel every situation. Put yourself in the place of each of them to understand how you can improve the employee’s workplace, what to do so that you can work more productively and better. Live one day at their position.
Soon, one of the most sought after positions in the catering will be a positive coach psychologist for staff. After all, the main task of the owner now is to make the people who work with him happy, help them achieve their goals with the help of his project. This is the only way your staff can make a guest happy and help the owner achieve the necessary financial results.
Salary fund and interest incentive programs work well, but need personal contact. The main mistake is to shift the recruitment function to others. For small establishments, this should be a process in which you are directly involved. You must feel each person and understand how suitable he is: do your values coincide, is it pleasant to spend time with him, does he motivate you to be better and try for him.
This is a complex process that is present in any institution, but not everyone is aware of this. There are things that some have simply not been taught: politeness, the basics of etiquette, commonplace knowledge. And if you do not pay attention to the training of employees, you will not be able to keep the guest.
Every morning, greeting each employee, addressing him by name and taking interest in his affairs, you will cultivate the same habit in him. He will greet your guests. Remember: you ? guest ? team – mirror each other. Only positive emotions evoke positive emotions in response. Set yourself positive, smile when you come to work – and in response, your team will behave the same. You certainly will not be able to re-educate all the candidates, but you will succeed in making the best out of potential ones.
To understand what emotions your guest evokes in a guest, you should go his way. Before that, analyze your competitors, write down your emotions. Examples of questions you need to answer:
- Was it easy for you to find an institution?
- Is the sign appropriate?
- Are the steps slippery?
- Is the front door clean?
- Have flowers or decor on the facade?
When your guest has entered the room, “undress” him in different conditions: in winter, summer, spring, autumn, rain and snow. Analyze what can be annoying at this point. For example, do you have a wardrobe or clothes hangers? Now designers and architects pay very little attention to this item. Guests are sitting on beautiful pink sofas at marble tables with a mountain of their personal items, like at a train station. Because the hangers or not, or she was placed near the entrance and there is a danger that someone else will put on your coat.
Are tables and sofas comfortable, do they correspond to the concept of the establishment? Another important point that can annoy guests is lighting. Light may be too bright, dark, cold, yellow, blue. And he should be comfortable taking into account the tasks that you assigned to him in your project.
Often negative emotions in the interior can be caused by the use of artificial materials, the lack of greenery, textiles, the surface of cold stone tables, etc.
Unpleasant little things
How annoying is the guest when the waiter forgets to take out the specialist before eating, and after the meal – toothpicks, etc. Does this really need to be taught? It is necessary, but it is not easy. Your task is to notice all these trifles and organize the work in such a way as to avoid such situations.
Put the napkins on the tables. In the guest toilet, hang a cabinet with the necessary little things: toothpicks, a sponge for shoes, personal hygiene products, hand cream with a pleasant aroma. Guests will remember this. Buy disposable raincoats and place a stand for wet umbrellas near the entrance. Do not forget about a bowl of water for animals. Print out coloring pages not only for three year olds, but also for nine year olds.
And it’s easy to prepare special orders. And this is not a matter of commodity accounting, but of far-fetched principles. And how do you give the order with you, are your takeaway cups comfortable? Does the waiter put disposable devices, dry and wet wipes, toothpicks in the bag. What are they like? All these are very important little things that make up the overall impression of the service and the establishment as a whole.
What will be restaurant marketing?
Marketing in the restaurant business in 2020 is emotions and automation. If you do not have the ability, strength, desire, knowledge to create an emotional business, you will come to the conclusion that all processes need to be automated. But in the first and in the second case, this should be done by 12 points on a 10-point scale. Do not forget about the promotion of your account on Instagram , the biggest hopes are now on this platform: advertising to attract guests and image promotion.
Automation in everything. Loyalty programs, communication in social networks, receiving orders, settling guests, internal processes and service – everything should be automated. The restaurant business of the future is emotions, the value of living contact with a person, and not indifference. Every year the world accelerates, and you will not have time to fix everything. You become the best – or close the institution. Therefore, now there are so many failed projects. Projects work for a maximum of a year, and then they close or change the format, because they want to prepare even more carefully. Units will last for more than three years – only those that control the emotions of guests.