The restaurant business has never been easy. Failure rates are high, public taste is fickle, and eating out is one of the first luxuries to be axed when times are tough. Insolvencies in the industry leapt by 15 per cent last year, according to accountant Moore Stephens, due to increased food prices, high energy bills, and a slump in trade due to bad weather.
But it’s not all bad news. The restaurant sector is predicted to be worth £56.3 billion by 2019, according to food consultancy Horizons. But restaurateurs have their work cut out to get a slice of this action. And in the effort to keep profitable and popular, some hospitality firms opt to refresh their operations altogether. But how can an established business give itself an effective facelift, and attract new custom?
What people want – and hate
Many hospitality bosses keep offering customers the same thing in the same way for years without questioning whether they’re still in touch with common tastes and preferences. When people were asked recently by the British Hospitality Association (BHA) what they wanted from a restaurant experience, in order of preference they said:
- Somewhere fun.
- A venue that’s cool.
- An exciting experience.
- A place that’s child-friendly.
- Fresh ingredients.
Things likely to turn them off included:
- Restaurant location. Inconvenient spots lost out due to the hassle of getting there.
- A business being unfamiliar or unknown to potential customers.
- Quite simply, some people decide a certain type of cuisine or venue is unlikely to be for them.
If someone doesn’t like Thai food and you’re a Thai restaurant, you’re unlikely to win them over. However, you can win on other fronts, such as marketing your business so strangers can read comments from satisfied customers, promoting selling points like great outdoor seating, or making a virtue of unusual or unique things on your menu.
Scrutinise your prices
When did you last properly cost and price your menu? Do an audit of your dishes, the cost of ingredients, and the mark-up on each item. Food prices have risen considerably in recent years, so calculate what you’re making per dish. Are you including all the condiments used, such as ketchup or parmesan cheese added at the table?
Take into account all your costs, including labour, rent, cleaning, supplies, and utility bills. Estimate an average number of monthly customers, using previous months’ till takings if you’re unsure of the figure, plus how much people spend on average. With these numbers to hand you should be able to work out how much profit you’re making on individual recipes, and overall.
If you discover you need to increase prices, be careful. Rounding up charges can have a big psychological impact. A burger at £9.95 looks much better value than at £10. Some items are easier to inflate than others – wine, spirits, and beer, coffee and tea, soft drinks, and desserts are extra elements for which people may be prepared to pay more.
Of course, you may decide the opposite and cut prices to attract more business. Offering deals or set menus at certain times of the day could be another marketing ploy. Look at what other busy restaurants in your area are doing to get ideas, and for a sense of what people will spend.
Revamping your menu and premises
If your menu is looking tired, or people aren’t choosing what’s on offer, it may be time for an overhaul, both in terms of content and design. Big chains hire executive chefs to devise new recipes, but SMEs don’t have this luxury. Research what’s popular, for example, regional food is on the rise in the UK, according to food experts Technomic. You might make a strength of offering local specialities or, at least, a menu that’s strong on locally-sourced ingredients.
Other trends include a growing desire for spicy, smoky, and exotic world cuisines from South America, the Caribbean, and the Middle East. Alternatively, you could plug into the buzz for healthy foods, or at least ensure your menu lists all dishes that are vegan, vegetarian, gluten-free, peanut-free, and dairy-free. Regulations about food allergen labelling came into effect in December, so restaurateurs should be up to speed on this score.
On a simple level, think about existing dishes that are popular, and those that aren’t. It may be better to have a shorter, simpler menu with a few key dishes that genuinely sell, plus a few seasonal specials. What about a bright, fresh menu design? And take a long, hard look at your premises to determine whether it needs a new look, too. Boost Capital has a lot of experience working with hospitality firms, such as Sen Nin restaurant in North London, lending the capital needed to give a business a new lease of life. A lick of paint, modern tables and chairs, and a sleek appearance can be very effective at attracting a new clientele.
Social media success
It’s a message we repeat time and again, but small firms must embrace digital marketing and social media if they want to keep up with 21st century marketing practices – and consumer behaviour. Of course, old-fashioned methods are also effective, so put effort into your external signs, menus, and A boards – about 35 per cent of customers make a spontaneous decision about dining in a venue when walking past, according to the BHA. But the vast majority – 59 per cent – plans their meal in advance using an eatery’s website or social media platforms, so you must be present online, and keep all of your information up-to-date, attractive and interesting.
Social media is also where customers comment on their experiences of eating out, so you’ll find conversations happening about your business on Twitter, Instagram and other networks. You need to be there, too, to respond to queries, complaints, and to offer feedback. The Technomic research identified social media as an opportunity for hospitality firms to invite proactive comments from users about what they want, be it changes to the menu, better facilities, or where to open another branch. Making consumers feel more involved and appreciated is essential in an age when many customers are all too ready to express their dissatisfaction with a dining experience to a wide audience through the web.
Finally, don’t forget your staff. They are the public face of your business, so ensure they’re properly trained, satisfied in their tasks, and generating a good buzz on the restaurant floor. Their attitude is truly infectious. Then, with all of these positive ingredients in place, there’s no reason why your restaurant business shouldn’t go from strength to strength. Bon appétit!