There is always a silver lining in every situation. One of the benefits of being a professional restaurateur, who has systems in place and is considered an expert in his or her field, is that bankers love you. Nothing impresses a banker more than a healthy P & L and  balance sheet. Our company produces a P & L and balance sheet weekly. This is proof to a banker that we are on top of our business and in tune with our numbers. If we want to borrow money, the first thing our banker asks for is updated numbers. It’s always great to see the look on their face when I give them our numbers through the previous week.

Where am I going with this? Here is the silver lining, interest rates are down quite low right now, and banks are looking to lend money to businesses who can prove they’re good operators. If your numbers are strong and you need to remodel your kitchen or bar, now is the time to do it. Chances are, you can refinance your mortgage and pull down fifty to one hundred thousand dollars and only increase your monthly payment a small amount. Here is where you need to be careful, when you refinance, set the terms to the amount of years left on your current mortgage. This way, you’re done paying for your business in same time line as you had before you refinanced. Your other option is to stretch your mortgage out a couple of years if you want to refinance, pull down some cash and lower your payment.

Don’t look a gift horse in the mouth, this just might be your companies best option for expanding or renovating without hurting your cash flow. Take a look at your situation, analyze your numbers and talk to your banker. At the end of the day, the worst they can say is no.

The final message of this article is, if you’re not in this position, maybe you need a professional coach who can help you navigate this economy and help you put your business back in the good graces of your bank. Think about it.

Dick  Varano

So when is the right time to open up that second location? For me, its when we are busting at the seams for at least two consecutive years EVERYDAY! In other words, just because we are busy every Friday and Saturday does not justify opening a new location. All too many times I see Independent Restaurant owners fill their restaurants on the weekends and quickly they want to expand on their weekend success, meanwhile they seem to forget that there are four other days during the week that you must make sales to pay the bills. Many times these expansions are made without maximizing the full potential of their existing sites.

Let me give you a quick example of what it will take for us to open our next location:
• We are open 7 days a week for lunch and dinner, my restaurant seats 240 guests, right now we are at capacity during dinner hours only on Thursday, Friday and Saturday evenings with waits up to 30 minutes. Lunch crowds vary from week to week, but on an average month we are at about 75% capacity every day. On average, during peak lunch time I often have 60-70 open seats that are not being fully capitalized. During dinner hours Monday – Wednesday nights we are often only at 50-60% capacity thus leaving me nearly 120 seats open during peak times. Now when we run Specials and promotions on these nights we do have waiting lists. As you can see it does not make sense to think of expansion until I can be at 100% capacity 100% of the time.
• Customer Care – 100% of the time. I want to make sure every guest who dines at my restaurant has the best dining experience they can possibly have EVERYDAY! Until my staff can give an outstanding dining experience to my guests everyday and do it because they want to, not because they have to, then we are not ready to expand. We are getting closer to hitting our goal, but each day brings a new day of learning and a new day of training.
• Quality Control – 100% of the time. Is hot food being served hot? And cold food being served cold? It’s about building systems to create an exceptional dining experience. If you can obtain this service 100% of the time for years not days or weeks, then you’re ready to expand. We’re close, but we’re not perfect…yet.
• Maximizing ALL potential sales – Does your restaurant have the ability to add catering or “Party To Go” Platters to your services? If so, have you maximized sales in these departments. Catering is the MOST profitable thing you can do in your restaurant. Why take on more debt, more employees and more customers when you can add hundreds of thousands of dollars in sales just by adding a catering menu to your restaurant.

Now if you’re busting at the seams, and you are achieving 100% success at the above points for at least one year, then yes, you are ready for the next move, however, if you let your ego get in the way and you want people to think you’re bigger than you really are, then you are in for a rude awakening. I know many Independent Restaurant owners who thought they were ready for the big expansion and now they are wishing they would have maximized their FULL potential in restaurant number one.

So what is the answer I give to people when they ask me when I’m opening up my next restaurant, I always say, “I’m a million dollars and two perfect years away”.

Ben Martinez

We as owners have to decide who is going to be in charge of these different technologies and how are we going to manage them. I can’t believe how many websites I look at and they’re totally out-dated. This is a kiss of death, if you’re going to blog on your website, you have to be consistent. I know that I’m personally guilty of this myself. I’ve gone three or four weeks without updating my blog. If you send out a news letter, send it out on time and keep it consistent. Facebook needs to be updated daily, twitter is out of control and almost needs to be attended to several times a day. Are you understanding the issue we are dealing with.

Figure out which social media works best for your company and choose wisely. Don’t over-reach and try and do too many, trust me, you will fail. Start small, start slow and build a program that will energize your customer base and keep them informed and looking for more. Social Marketing is free, it is easy to want to grab as much as you can and try and maximize your free marketing. Don’t be fooled, you can do as much damage having your social marketing program under perform, as you can, not having a program at all.

The other side of the equation is that, once you enter the social marketing arena, you then need to manage your cyber brand. If you rise to the top of your market, people will try and knock you off your perch. Competition will eventually catch on that you are out there and way ahead of them. The easy way to catch up is for them to trash you, or have their friends trash you. You have to monitor sites like Trip Advisor, or City Search. Sometimes people have the wrong restaurant, or in some cases, a well written letter can sway them into taking down their horrible review. If you’re not checking and keeping up with this, your company can suffer tremendous damage, and you won’t even be aware of it. If customer’s rave about your restaurant during their visit, don’t be afraid to ask them to post a review on one of the review sites. Manage your image, it’s an ongoing battle that rages on daily. Your job is to stay ahead of it.

Cyber marketing is here to stay, in fact it’s going to grow exponentially. Stay ahead of the curve, protect your brand and take advantage of all the opportunities available to business owners today. Craft an action plan and stay on top of your restaurant’s social marketing.

Richard Varano

The Major league baseball team from Minnesota was nearly contracted from baseball just ten short years ago…The twins were the laughing stock of baseball averaging just over 10,000 fans a game and anchored at the bottom of their own division. Their only marquee players couldn’t wait for their contracts to expire so that they can bolt the twin city and move on to greener pastures. In fact, twins owner at that time, the late Carl Pohlad had a tentatively agreed to a $150 million buyout to dissolve his team.

Fortunately for Twins fans contraction didn’t happen…because today Carl’s son owns the franchise with his two brothers and they have since turned what was once a depleting organization into defending American League Central Champions and have made the post season five of the past years, and this year they the vibe is even better playing in Downtown Minnesota at their brand new ball park, Target field.

Less than a decade ago this team was nearly extinct from baseball and now today they are one of the best teams in all of baseball. So, what led to this dramatic turn around? Jim Pohlad shares in his Entrepreneur magazine article shares his five points on how he turned his franchise around by thinking and doing business like a small business owner. How ironic is that? A business that is worth $300 Million and he decided to run his business like a small smart business? It just goes to prove to you that weather you are $3 million company or $300 million company all businesses are the same. It’s the marketing and systems that you have in place that make the difference.

Here are the five items that Pohlad says will make the biggest difference between success and failure. Compare each of his points and how you to can relate with your restaurant and how you can implement in your business to make it more successful.

1. Identify your strengths — Like the twins, who cannot compete with the New York Yankees financial, nor can the Independent Restaurants compete with the National Chain Restaurants on a financial level…You must figure out your strengths and use them to your advantage…If the Minnesota Twins can compete against the New York Yankees and their $200 million payroll then you can do the same against the chains. What are strengths and how can you capitalize on those?

2. Offer a unique experience – The Minnesota Twins were playing in a horrible venue in the Metrodome, Jim knew he had to provide a better game day experience for the fans and he worked hard for years to get a new ball park built, today, he has one of the most beautiful parks in all of baseball. What experience are you providing for your guests? Now, I don’t expect you to go out and build a $1 million dollar restaurant, but, you’ll be surprised what a few gallons of paint and some minor cleaning would do to enhance your guests experience.

3. Connect with your customers - Really? A $300 million dollar company needs to connect with its customer even more so than a $1 million dollar company…What are you doing in your restaurant to stay connected with your guests?

4. Remain loyal to your employees – This is a big one, so many times we take for granted the value of our staff and we don’t realize the expense it takes to replace them, not only from a financial stand point, but also from an atmosphere stand point and the positive energy that is instilled throughout the company when you have employees who WANT to work for you.

5. Know when it’s time to act like a big business — Even though all his points were thinking like a small business owner, there comes a time when you have to step outside of your comfort zone and think and act like a Big company. For you the restaurant owner, that time is now, we are headed to the Twin Cities, Downtown Minnesota on August 23, 2010 for our Restaurant Success Seminar Tour. Now is the time to think and act big like the chains and see how we can help you not only compete with the National Chains, but dominate them!

I hope to see you in Downtown Minnesota on Tuesday August 23, 2010!

Ben Martinez

Restaurant Masterminds

Being in a rural setting, we tend to be behind the curve when it comes to industry trends, compared to a New York City or Chicago. Utilizing the internet, we no longer have to wait a year or two for the trends to reach us. We can capitalize on trends and ideas before they become passe’. It’s great to find out about what wines are hot and from what country, or the latest on natural beef, or the new hot cocktails.  With the economy struggling, deals abound and you need to be jumping on them and leveraging them to your companies advantage. Couple these deals with some new trends and you’re now in a position to ride the wave, and leap-frog your companies business right over your competitors.

Keep in mind, the Chains spend an enormous amount of money on R&D, independents just can’t keep up with that kind of a budget. What we can do is capitalize on the Chain’s research and utilize it for our own. It’s a proven fact, in a resort or tourist area, children pick out the restaurant over seventy percent of the time. Combine this with how Burger King and McDonald’s cross promote with movies and Cartoon characters, they leverage the latest show or movie and ride it right to the bank.

What’s hot? What’s the latest craze? I’ll tell you, Silly Bandz are where it’s at. Kids are going crazy for Silly Bandz. The best part, if you buy them in bulk, they’re about three cents a piece. Let me think about that for a second, are you getting where I’m going with this. The wave doesn’t always have to be about the food or beverage, it can be as simple as an addition to your children’s menu. Marketing is about staying out front, or at the very least keeping up. Don’t get caught flatfooted, utilize every tool in your tool-belt, it’s time to take the gloves off and take the fight to your competition. All it takes is a little ingenuity and a lot of hard work. Get to it and stop blaming your competition. You can make it happen today.

Richard Varano

The scary part of being an Independent Restaurant of today is, chain restaurants are actually starting to execute some of their marketing ideas. Just the other day we stopped in our local TGI Fridays for some late night snacks and low and behold our server actually executed to perfection the explanation of their loyalty program, word for word she sounded like one of my managers training, a new employee, her pitch was absolutely perfect, noting every benefit and reason of why we should sign up for their loyalty program. Now keep in mind TGI Friday’s rolled out their loyalty program over a year and a half ago and this is the first time I have ever had a server pitch it like ours did that evening.

Ok, so they figured out that getting guest information was crucial, they understand and maybe they have developed systems to insure their staff is collecting guests information. That’s the easy part!  Now, what are the chains going to do with all this information? A great example of collecting guests information goes out to Kentucky Fried Chicken and Chick-fil-a restaurants. Each restaurant has given away tens of thousands of chicken dinners and chicken sandwiches over the course of the last year…all you had to do in exchange for the free meal was give them your personal information (mailing address, email address, date of birth). Of course I did right away, and proceeded to collect my free meal…one year later, same address, and not one direct contact from either company! So, what was the point of collecting all my information if you’re not going to do anything with it?  Wasted marketing dollars at its best! Plus, they gave me a FREE meal and I have not returned.

As Independents we have a HUGE advantage when it comes to DIRECT RESPONSE MARKETING. We can change on a dime and contact our guests immediately. We don’t have all the “corporate red tape” that the big chains are required to follow. Independent restaurant owners see something that’s not working or could be improved on, and can change within days if not within hours. So fear not my compadres of the big chain restaurants and all their creative marketing ideas, instead of focusing on what all the chains are doing, I hope you’re concentrating on what you are doing within your four walls, because the chains are making a push and it’s only a matter of time before someone in corporate finally realizes the value the independent restaurant owners are marketing.  (Well, maybe not, but you better make sure you’re doing what your supposed to do!)

Are you:

• Training your staff to collect guests information?
• Measure and recording your progress?
• Setting up systems to automate your marketing?
• Building systems to provide a great dining experience?
• Rewarding your top guests?
• Staying in contact with your guests?
• Educating yourself to stay ahead of the competition?
• Planning on attending our next Seminar in Minneapolis?

Take a look at all the marketing that your guests have to filter through on a daily basis, is your restaurant standing out? If not, you better take a long look at what you’re doing and figure out how you are going to stay ahead of the competition…if you need help, Restaurant Masterminds is headed to downtown Minnesota for our next two day event to help Independent Restaurants beat the competition! Sign up today and see you on August 23rd &24th!

Ben Martinez
Restaurant Masterminds

At my prime steakhouse, we cut our own beef. It is important that our Chef shops around with our preferred vendors in search of the best price each week. These are vendors that we have specked out and chosen, based on consistent quality and pricing, along with reliable deliveries. Once our Chef receives his bids for our different cuts of meats, he then decides who to place his orders with. It actually seems very straightforward. Here’s where it gets a little tricky. We have a special broiler that heats up to sixteen hundred and fifty degrees. If you throw a steak under our broiler and it’s cut too thin, it will curl and end up looking very unappealing on the plate. We speck our rib-eyes or NY strips around ten to twelve pounds. The reason for this, is that at this weight, the steaks we cut will be at least an inch thick. Currently, most of the meat coming to the market are trending fourteen to seventeen pounds. Now the eye is large and the steaks are too thin. The price is right, the product is wrong.

We have a vendor that carries an all natural product that is currently weighing in at ten to twelve pounds. The cost is a dollar and fifty cents a pound more than what we typically pay. Here’s where you have to do the math. The waste on a strip or rib-eye in the ten to twelve pound range can be up to sixty percent less than the waste on a heavier piece of meat. The cost of your cut steak might be fifty or sixty cents more per portion. The key here is that some times you have to pay a little more to keep your quality consistent. If a regular customer comes in and purchases a steak dinner with a large eye, and the steak is a half inch thick and it’s all curled on the plate. He’s probably going to send it back. You now have to cook another steak and try and appease him. The lost steak just cost you your savings over the natural beef. You factor in the waste and cutting loss, add in an unhappy customer or two and you see how it actually costs the same to buy the natural beef in this instance.

It’s the exact same philosophy if you buy portion control eight ounce tenderloins. It can be a pricey proposition. If you cut your own whole tenderloins, you have to have an outlet for the scraps and small pieces. If you don’t have this outlet, and all you do is through the scraps into a stockpot, or grind it up for hamburg. You’re better off paying more for the cut steaks and saving money in the long run.

There are times, when it pays to pay a little more, and save your hard earned money. The key is to know the difference on when you need to pay more and save on cost and labor as well.

Think about it, I’m sure everyone has at least one situation in their restaurant where pride or ego is preventing you from analyzing your particular situation. Take a good look and you’ll be surprised at what you find.

You know what I’m talking about, we’ve all been there, long days, weeks and months away from family and friends. Sometimes after a long day of work we drive home and ask ourselves, why? Why do we put ourselves and our family through the agony of owning a restaurant?…But every once in awhile a day comes along that makes everything worth while…Now, before I continue on, let me preface everything I’m saying by stating I LOVE being a restaurant owner, however, there once was a time that loving my restaurant was furthest from the truth. I struggled like many of you do today with all or some of the items that I listed above. It took many years for me to figure out what was going to make my restaurant successful and more importantly what was going to give me passion and motivation to love what I was doing. After changing my mind set, and making a personal commitment to succeed and then developing systems and most importantly learning how to market my restaurant was the turning point in the first step of LOVING what I do.

Now back to the thought that every once in a while something happens in your restaurant that truly makes you feel proud of doing what you do and makes you understand why you are a restaurant owner. A few weeks ago one of my long time cooks who has been with us for nearly 9 years, had his oldest son apply for a busboy position. Not really knowing who the new young employee was, I observed him from afar and noticed he was a quality young man with great work ethic (just like his dad)….Two weeks later, this fine young man asked if he could speak to me personally and we set a time to speak the next day. Not knowing what the conversation would be I began to wonder if he was having issues with one of our managers or something else was really wrong.

My new employee of nearly one month met with me the next day and proceeded to shake my hand and THANK me for giving him the opportunity to work at such a wonderful establishment. He showed true appreciation and maturity for his age…He also thanked me for letting his dad work in my restaurant, stating how important my restaurant was to his family for income. He ended our conversation by saying, “I want to be just like you when I grow older, someday I to will own my own restaurant and have the passion to help other families like you have helped mine, you are a true inspiration to lots of people”! WOW, this young man helped me realize, I am not only responsible for the well being of my family, but also the well being of the 43 other employees who work for me and their families.

Sometimes as restaurant owners we forget the fact that not only are we responsible for our families, but the families of our employees as well and what your restaurant means to them. So the “Joy of being a restaurant owner” took on a whole new meaning to me late Friday night. The next time you are struggling with one of the items listed at the top of the page, take a moment and find the JOY of being a restaurant owner, and quickly dealing with that item will become much easier. Take the time to write down at least 10 reasons why you LOVE being a restaurant owner, and then everyday read them aloud to yourself and watch positive energy take hold in your restaurant.

I LOVE what I do! Do you? Email me at Ben@restaurantmasterminds.com and tell me your dreams, passions and desires about having a successful restaurant.

Ben Martinez

Restaurant Masterminds

The key to communication is to be concise, stay current and keep everyone in the loop. Our monthly meetings are mandatory, we have a full agenda, servers are required to sign-in, these are paid meetings and we expect you in work mode. Preparation is key, our managers spend the entire month documenting issues to discuss for our meeting, tallying up winners for our server contests and assembling short videos to stimulate the staff and make it fun.

It always amazes me when I’m in a restaurant and I ask a question and the server is completely clueless. The sad part is, it’s not even his or her fault. Management has failed, it’s our job to train and communicate with our employees. Typical restaurant communication is to tell one server and have them pass it on. We’ve all done this exercise and the results are staggering, the last person told, has a version that isn’t even remotely similar to the original message.

Today, we communicate differently, texting is the best way to get in touch with someone. Everyone has an I-phone or some sort of a phone that has their e-mail on it. We’re currently assembling an employee website, it will be pass-coded and include server schedules and current market prices for lobsters, current promotions and a hot list for servers. We are even including a forum for servers to communicate with us. I know a lot of chains utilize an employee website, it’s time we evolve and utilize technology better. The issue here is to communicate better, make sure our staff is properly outfitted with all the information they need to do their job.

Information is power, don’t employ a bunch of powerless people, arm them properly and put them to task. A well trained employee, who is completely in the loop is probably worth ten to twenty thousand dollars a year in sales. They take pride in their job and are proud of their place of employment. Lastly,  having a staff of well communicated employees will eliminate a lot of internal strife, the he said, she said, stuff will go away. Keep your staff in the loop and you’ll have a much happier staff who appreciate their job.

Dick Varano

Your data base is by far your number one asset! We teach our members how to obtain guest information and most importantly, what do with it once they’ve obtained it. What happens when your data base begins to grow in the tens of thousands? How do you manage that data base?

During coaching calls and talking to prospective new members, Independent restaurant owners often ask me the size of my database, and with a grin I tell them, “I have 25,000 members in my data base.” Each time I mention that, I get the same overwhelming response, “WOW!  I wish I had that number of guests listed in my database, because if I did then running my restaurant would be easy!”

I won’t kid you, it’s great having that many members in my database, in fact it’s one heck of a number to brag about! However, the reality is, the more members you have means the more segmentation you must do…in other words, the more work you must do to manage your list. After all, does it make sense to mail 25,000 post cards to your members at a cost of over $12,000? It does if it brings you twice the amount of sales, however, I know not all 25,000 members are loyal to my restaurant, so I cleverly segment my list according to the guest and am able to create mailings that produce the most return on my investment.

It doesn’t matter if you have 25,000 members or 25 members in your database, here are a few tips that I have always practiced, and advise my members to adopt the same rules.

Scrub your lists regularly:

Scrubbing your list is simply making sure that you are keeping it as clean as possible. RepeatRewards® does this on a regular basis. They run a “Duplicate Elimination” to help find customers that may be possible duplicates of one another. They also run a “NCOA” – National Change of Address to help my database update customers who have moved, and I am able to update to their current address.

Mail First Class when you can:

Mailing first class birthday cards and post cards allows the post office to return any mail back to your place of business for guests who have moved or did not correctly register a forwarding address. Once you’ve received the return you can try and contact guest, and update their new mailing information. If you are unsuccessful contacting the guests, you can now put them on a “mail hold” and save yourself the money from future mailings.

Include mailing information on email blasts:

When sending email blasts to your guests, ask your guests to update their current mailing addresses if they moved. Again, this will save you money on future mailings, plus it will help increase your return on investment percentage.

When are your guests dining out:

RepeatRewards® sends me a list of what guests have not used their membership card during a 12 month consecutive time frame…when this happens, we mail them a “Lost customer” postcard  trying to entice them to come back and see us. This is a  three step process and if you fail to get them back to your restaurant, then place the guest on a “mail hold”, again, helping keep our list clean.

Back it up!

The wonderful computer world has provided us with the best technology to help maintain our records, exciting promotions and creating databases, but one bad computer glitch and all can be lost! Take the time to purchase an external hard drive that automatically backs up the information on your computer and date base. Just one computer virus or glitch in your system, can crumble your entire list. Take the time to BACK UP your computer!

Do you have a system in place that tracks what offers your guests respond to?

Do your managers manage your staff to make sure they are following all the guidelines to insure that proper promo codes and membership numbers are being entered correctly?  It may not matter or cost you much money when you have 100, 1000 or even 10,000 members in your database, but I guarantee that once you get in the 20,000 member mark you’ll want to make sure someone is managing your database!  Managing 25,000 members does take a little effort, but since this is my #1 asset in my restaurant, I’ll do whatever it takes to protect my database and make sure it stays squeaky clean.

Ben Martinez

Restaurant Masterminds