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What Kind of Restaurateur R U???


There are basically two ways to improve profitability, 1) lower costs and/or 2) boost sales. Nothing new about this, but it's surprising how many business owners focus much more of their time and attention to #1 and virtually ignore #2. Studies have shown that there are essentially 2 types of CEOs (if you own a restaurant, YOU are the CEO): "accounting minded or marketing minded." An accounting minded CEO focuses primarily on reducing costs and overhead. While this approach may appear to improve profitability in the short term, over time this can negatively affect customers and sales causing the CEO to work even harder at reducing more costs. Things like the cost of wasted napkins, employee wage rates, overtime, vendor prices, food cost, etc. are the main concerns of this type of CEO. It's easy to add up the cost of overtime but it's impossible to quantify how many customers didn't return as a result of being understaffed and delivering slow service. Instead, marketing minded CEOs are laser-beam focused on taking the best possible care of the customers they have and turning new customers into regulars. Their primary concerns are things like consistency, CUSTOMER SERVICE, employee training, food quality, cleanliness, etc. Marketing minded CEOs will often have higher costs than accounting minded CEOs but in the end have more customers (& sales). When times get tough it's easier for marketing minded bosses to find and trim the unnecessary fat versus the company that is already as lean as can be but has fewer customers and sales to work with. In short, you want to find the right balance of marketing versus accounting, but never forget the part of the equation that really drives long term profitability and success. Point to ponder:

What would you rather have "brother P", 25 customers paying 50 cents more for extra wasabi for take aways or 100 customers getting the extra condiment for "free"? What kind of owner are you? And how will it affect the success of YOUR restaurant?

Have a great weekend!

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