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A ‘restaurant recession’ can happen without a broader economic downturn.

With the introduction of new restaurants each year, and more robust competition, comes a potential reduction of sales for established restaurants.

New restaurants or a softer economy can directly affect the revenue of existing establishments. When this occurs, it’s tempting to make a quick business decision in an attempt to increase sales. However, executing a quick band-aid solution, like a restaurant daily deal, may not resolve anything. In fact, it could actually do more harm than good.

Instead, educate yourself as a restaurant owner to determine the difference between what’s a long-term trend and what is a short-term fad.

Once you’ve determined the situation, focus on these three areas to survive and thrive in the long-run:

Manage Your Marketing

When sales slow down, immediately go to your restaurant’s marketing plan. Take the money you have and only spend it where your customers are, like social media and email.

If you haven’t picked apart your marketing plan to adapt to your customer’s needs, you might be wasting money on marketing initiatives that aren’t working.

Companies that grew 1-15% year over year spent an average of 16.5% of their revenue on marketing. For example, if you spend money on radio ads, but your customers only “live” on Instagram and Facebook, you’re wasting money.

Instead of trying to spread a single message, focus on brand awareness. A catchy slogan that stays with customers is worth repeating when you need it most. This will engage restaurant customers to become interested in your brand.

Budget Your Budget

As you enter each quarter, continue to evaluate and monitor the marketing plan you’ve set in place. Take the time to determine whether or not your strategies are working.

A general rule, your marketing budget should be 3% to 6% of sales. Also, while it’s crucial to pay attention to all of your expenses during a restaurant recession, don’t trim on costs that mean the most to your restaurant. If quality ingredients are critical to your brand, don’t compromise on that as you evaluate cost savings.

If having the best staff onboard ensures the best customer experience, only hire the best and have some extra cushion money set aside to make sure they are taken care of financially throughout the year via bonuses or raises. Customers will continue to demand the best service from your team, and the best way to guarantee customer satisfaction is to have a kick-butt team in place.

You can learn to be more efficient when it comes to scheduling your team’s time by only scheduling them when you need them and letting them go home when their work is done. During slow hours or seasons, you risk losing money by keeping staff around when customers aren’t.

Be a Leader

If your restaurant is struggling with sales, your restaurant’s brand could be suffering. When this happens, you need to step up as the owner or manager to instill confidence in your team.

You should put all of these expectations and goals in one place that is accessible for employees to look over when needed. Monitor how other local restaurants are doing and investigate if there are actions or strategies they are implementing that might work for your restaurant as well. Don’t be a copycat, and don’t use a slight decrease in sales defeat your attitude.

Try focusing your attention on loyal local customers, like takeout and delivery customers that frequently order from your restaurant. When times get tough, you may find it easier to attract sales from this well established group of customers than trying to bring in a new customer.

There are always slumps in the restaurant industry, from time to time, and for different reasons. Be ahead of the curve by being prepared for a restaurant recession and take the challenge head-on.

Activate Your NetWaiter Site

If you want to attract more local customers, and keep them informed about your restaurant, check out NetWaiter’s platform and network. You can search for, and activate, your NetWaiter site and app here:


Author NetWaiter

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