To make money in the restaurant business, the proprietors have to have a competitive advantage. If it was just about working hard, a good number of restaurant owners would already be wealthy.
You can find only a couple of genuine and sustainable competitive advantages any person will have in the restaurant industry.
Restaurant owners can't get the perfect chef or the ideal property or the best menus or even the cheapest prices -- at least, not for long. Culinary chefs can get a better offer, construction, zoning regulations and changes in population may turn great sites into so-so locations. Great recipes may be stolen and even improved upon. And needless to say, striving to have the lowest prices will not be the way to go.
The only two real and long term competitive advantages virtually any restaurant owner can have -- Innovation and Promotion.
Writer and management master, Peter Drucker, declared, "Innovation is the only lasting competitive advantage anybody can ever have in any business."
To loosely quote Ray Kroc, the McDonald's creator, knew the importance of variation when he asserted, "McDonald's can innovate faster than the competitors can copy."
Applying unique promotional skills is a major part of innovation simply because --
Marketing is certainly the only thing that delivers profit for a restaurant. Everything else is an expense.
When handled correctly marketing is definitely the best investment any restaurant proprietor may ever make. In the stock exchange or in real estate somebody can possibly hope for a 5% or maybe even a 20% return on their investment. And yet in marketing, a $100.00 investment in promotion of your business could bring in $1,000 in profit and frequently much more.
For instance, changing only a handful of words within a headline can easily earn two to ten times extra profit from the same advertisement. Additionally the only cost to render the change would be the brief period of time it required the restaurant owner to learn how to create headlines. That is a pretty quick return on your investment!
The average restaurant entrepreneur thinks his job is to "just run his restaurant." He doesn't have time or make time to market his restaurant -- or take the time to learn about how to market his business. Maybe that's why he is average.
A business owner can't make $100,000 a year performing $10 per hour work. A restaurant owner's duty ought to be to market, innovate and promote his/her restaurant.
The restaurant marketing plan used by many restaurants is based mostly on anything the latest ad sales rep happened to be promoting. When thinking about promotion, many restaurant owners just duplicate what everyone else is doing. That could spell disaster for just about any private restaurant.
Most restaurant owners put in extended hours, but it doesn't have to take extended hours to market, innovate and promote a restaurant.
Look at it this way, a restaurant entrepreneur that masters innovation and marketing can swap restaurants with any restaurant owner in the area. Allow him to have the location, the menu, the cook and staff members and a year from this time the restaurant owner who understands how to creatively market will have the most profitable restaurant.
Learn to quit chasing after the so-called competitive advantages which are short-term and non-sustainable. Really focus on marketing and innovation and watch your restaurant profits skyrocket.
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