Restaurant Masterminds

We’ve all heard the old saying “it takes money to make money” especially from those small business owners who are struggling to make ends meet. These are the same people who are looking for investors to help salvage their struggling business. However they are falling into the myth of “it takes money to make money” and falling into a deeper hole.

When my Dad first opened our 50 seat restaurant 27 years ago he did it with only $5000 he had saved while working two jobs and only one line of credit from a local food distribution company. He had no investors and no bank willing to lend him any money for such a risky business proposition, but the one thing he did have was the desire to succeed and a strong work ethic to make it happen.

I often wondered growing up (and cried) of why my Dad made me work so hard through my teenage years…looking back now, that was the best thing that could have ever happened to me. My dad instilled a work ethic in me that I am eternally grateful for and one that I am now passing on down to my kids.

Can you imagine if the bank or investors would have “given” us tens of thousands of dollars! My dad may have just stopped thinking of new ways to succeed. What if we became “fat” with unearned money, he may have stopped asking good questions and stopped creating good business. He may not have pushed us all so hard and thus allowing us to become lazy in our ways, instead we rolled up our sleeves and went to work. And now 27 years later we not only have a thriving restaurant business but two other businesses that are very profitable.

It wasn’t money that did it for us, it was an idea with a plan of action that we put into effect. Your restaurant will succeed because of ideas and action, not because you have been well funded by investors.

It has been our desire to succeed and to create our own future that has made us successful. So, before you go crying on some ones shoulder that “it takes money to make money”, you need to take a look at your inner self and find the answers of what it takes to make your restaurant successful. This will be the way that you can beat the National Chains or bigger restaurants in your area. They won’t have the need to find new business ideas or be creative in building relationships. They can “afford” to say, “we’re booked on a Friday night we don’t need to answer the phone, we don’t need the business”. They can “afford” to that because they have wheel barrows full of money. However history shows that a fool and his money will always depart.

So instead of all these big corporations rolling up their sleeves and getting to work to generate new marketing ideas and insightful thinking, it is so much easier for them to wait for the government to “bail” them out…like I stated earlier, a fool and his money will always depart. While other’s are waiting for a bail out, now is the perfect time to roll up your sleeves and get to work!

In my life, history proves you don’t need money to make money!

I recently participated in a Grand Tasting at a local Food and Wine Festival. I was approached about three months ago to be a participant and thought it might be a great way to introduce my restaurants to some potential new guests. Unfortunately as we approached the date for the festival, I realized how unorganized the event planners were and their glaring lack of experience at hosting a major event. We made the most of a difficult situation; being veterans of this type of an event we at least had experience on our side. The lack of both planning and marketing for the event made for a tough situation when all the participants arrived to set-up. Communication is key and the lack of it caused numerous situations that were easily avoidable.

The Chamber of Commerce was expecting about four hundred guests to attend this tasting, which consisted of about twenty restaurants and forty wines. I felt the ticket price of fifty-five dollars was a little steep for the economy, although it could have worked if the event was marketed properly. My guess is the event had about one hundred and twenty-five attendees. I wouldn’t consider the event a bust; I felt the components were in place to have a truly wonderful event. I think the attendance was a disappointment and the monies raised for the arts were slim at best.

I have several questions about the event. Why would you plan an event with twenty restaurants and never have a meeting with everyone? Communication is key; you have an incredible amount of talent available, many of which do outside catering and special events. Why wouldn’t you tap into the experience of your participants? The other glaring omission in my opinion was not leveraging your participants. You have twenty successful restaurants, yet there were never posters printed and posted in each restaurant announcing the upcoming event. This time of year, the total customers patronizing the combined restaurants are well over one thousand customers a day. How about if part of being a participant was that you had to sell ten tickets to the event. Before the Chamber ever sold one ticket, you’d have two hundred sold with eleven thousand dollars in the bank.

My point isn’t to crucify this event; I’m trying to instill the importance of marketing. With proper marketing this was a very viable event, without it, a disappointment. We’re all guilty of hosting something at our restaurant that came up flat. Before you go forward with your next event, take the time to think about the results you want to obtain, and leverage everyone involved to achieve those results. Finally, make sure you market the event properly, there are many low cost marketing techniques you can use to get the word out. Four walls marketing is a key component, partnerships or sponsors are great ways to spread the word and utilize all the talent and personnel involved to make your event the success you envisioned when you first started planning the event.

Awesome Pat…You are officially a media superstar!

This is a great example of the media creating the story
and Pat creating the marketing for it! I call this riding
the coat tails of the media. I wouldn’t stop there, I would
blitz the other TV stations as well and have them cover
the story too.

I would be selling quarts of this soup to all your guests
who come in…and then after the Penguins win the cup
I would send emails and letters to the Penguins office
and let them know that it was your soup that put them
over the top…who knows, you may be cooking soup for
the entire Penguin organization after their parade!

I’ll be rooting for Pittsburgh tomorrow night!

Cheers,

Ben Martinez

By: Ben Martinez

I just finished attending our newly formed merchant association district meeting…This newly founded association is made up of 18 business owners who decided a while back that it was time to begin to work together as one to generate more business for each other. Today’s topic of conversation was hiring an outside marketing firm to create a merchant logo and a unique selling proposition of why people should visit our retail stores. Keep in mind most of the businesses within the shopping district generate less than $100,000 in revenue per year and most are mom and pop operations. So the idea of marketing and branding is rather new to them.

Most merchants were in love with creating a branded logo that everyone will recognize…unfortunately like most small minded businesses owners there is no way our newly formed association can afford to “brand” our shopping district like the way big corporations can, we don’t have millions of dollars to build our brand, heck we don’t even have hundreds of dollars to do it. This is where I spoke up and let my experience of building my restaurant sales through direct response marketing take center stage.

As small business owners to many times we spend too much time, money and energy looking for new guests to help increase our sales that we completely forget about the existing guests that we have coming through our doors. Over the last seven years I have built my restaurant through my existing guests and I let those guests do my marketing for me. There is nothing more powerful than the power of a referral! It doesn’t matter what you say about yourself or your business, (people really don’t care), but what others say about you is ten to twenty times more believable. Essentially these guests become walking billboards for my restaurant.

The one idea that I put out during our association meeting was to take whatever marketing dollars we were going to use to build our brand and pay some outside marketing firm to build our logo, was to instead take these same dollars and market to ALL our existing customers that already shop in the district and give them another reason of why they should shop in our district again, this by far and away will have a greater return on investment than trying to generate new guests through an outside marketing firm. The outside marketing firm will be good for one time visits, but we want to build lifetime customers and to do this we need to build relationships with our current customers. Now once we begin to build a higher flow of traffic we can now begin to “brand” our identity of who we are and what our shopping district is all about! Then when more revenue is generated from sales, we can now begin to create a marketing plan of how to get “new” guests to our shopping district and yet still have the highest return on investment possible.

Let me give you an example of how we have used this same system in our restaurant multiple times and how you can do the same thing in yours. Years ago we incorporated a loyalty program in our restaurant (RepeatRewards.com) that helped recognize our top guests and gave them incentives to come back again and again, this system was one of the primary reasons of why we were able to grow our business so quickly.

Today, we implemented our Gold V.I.P program for guests who have earned 1000 or more points on their El Jardin Repeat Rewards membership. These 872 V.I.P members have all been recognized as top guests in our restaurant. Each member now has their very own personalized Gold V.I.P card that has many more benefits compared to our standard Repeat Reward members. Some people might be asking, “why should we give anything extra away to guests who are already coming in?” Most small minded business owners ask that question…Open minde d business owners know the lifetime value of guest and are not just looking for the one time transaction, instead they are focusing on the future and understand the future of their business is in creating loyalty and building relationships with their guests. There is no better way to do this than giving back to those who give to you!
Remember there are only three ways to increase sales in your restaurant:

1. Get more “new” customers (This is the most expensive way)
2. Get your current guests to come in more often
3. Sell more to your current guests when they come in

Everyone is always looking to get more new guests, but to survive and build a recession proof business NEVER forget about your existing guests.

Ben Martinez – Restaurant Masterminds