7 Ways to Study Your Restaurant’s Competition for Your Benefit

When considering competition, most business owners have a negative reaction. Your competitors are the bad guys who are intentionally trying to keep members of your target audience – your customers – from choosing you. When looking at the competition through that lens, it can be difficult to see how any positives could come from a competitor’s existence.

However, competition can be a positive for your business, from the right perspective. It is through competition that you can thrive, innovate and grow. Knowing who the competition is, what makes them stand out, and what people dislike about them is one of the best ways you can achieve a competitive advantage and begin to dominate the market.

Many restauranteurs believe their establishment already stands out from the competition. However, few do enough research to validate those feelings of superiority. By blindly assuming that there is nothing to improve, or that the only things to improve are those that are in response to customer complaints, they can lose out on the opportunity to take their place as one of the best restaurants in their city.

Trying to do what your competitors are doing but basically a little bit better is probably not going to be the winning strategy. The problem is finding what your competitors wouldn’t even consider doing. – Jamais Cascio

When researching your competition, you want to learn as much as you can. You need to know what they offer, how much they charge, what are a customer’s options for obtaining their food (i.e. delivery, take out, eat in), their marketing and branding strategies and tactics, any loyalty or perks they offer to customers, what their customers say they do well, and what kind of promotions they offer. Throughout the research process, you’ll want to keep track of any ideas you have, what your competitor’s strengths are, as well as what their weaknesses are.

Make a List of Your Competitors

The first step in studying your business’s competition is to figure out who they are. Start by making a list of restaurants near your location. You can also check online for restaurants that compete in the same areas as you. For example, if you are a diner serving American cuisine, you’ll want to look at any other restaurants that serve American cuisine, as well as any that provide a quick sit-down option.

You may not want to limit yourself to only your city. Many customers will travel nearby to high-quality restaurants.

Lastly, you can check the Better Business Bureau. Look for the top performing restaurants in your area, as well as new competitors who you may not even be aware of yet. By looking at the top performers and the latest restaurants, you can get a sense of what the newest trends are as well as what makes a restaurant thrive in your market.

Check out Social Media

Once you have your list, you can use the Internet to start your research and scope out the competition. Social media can be full of information. Look at each of their social media accounts and see how they promote themselves. You can also look at how many likes, followers, and how much interaction they have on their accounts.

This can be another way to rank your competition and see which the best are to emulate, especially if the Better Business Bureau does not provide much information. This step in the process may provide a lot of ideas for you to use to promote your own business. Be sure to keep track of those ideas so that you can implement them later.

Read the Reviews

In addition to social media, you can look for other online reviews. See what your local newspapers and magazines have written about your competitors. View review sites online such as Yelp. Make notes of both the positives and the negatives – each will be able to help you develop a competitive advantage.

Also, pay attention to how the competing restaurant reacts to reviews – especially from customers. Are they responsive to everyone? Do they come across as argumentative when receiving complaints? How can you use their examples to improve your own review responses?

Compare Marketing Materials

Online is not the only space where your competition advertises, though you should do a short audit of any digital properties like social media and websites that your competition has. Pick up local marketing materials such as newspapers, magazines and restaurant guides. See if you can find local flyers, coupon handouts, mailers, and other types of advertising. Looking at what your competition is doing well in restaurant advertising, as well as what could be improved, can help you shape a more effective campaign in your market.

Ask Your Customers

Talk to your loyal customers. Do not give them a long paper survey, but casually ask them where they go when they aren’t at your restaurant and what they like about other places. While this information is hard to quantify, it can be helpful.

Use this information to understand your own customers better. What attracts your customers to other restaurants? What do they like at other places that you could potentially utilize in your own business?

You can also uncover ways that your customers find out about other restaurants that you may not be aware of. Besides word-of-mouth, do they use apps or other forms of media? You can use that information to discover other places where you may want to advertise your restaurant in order to reach other customers who are similar to your most loyal ones.

Attend Local Food-Themed Events

Many cities offer food programs such as Taste of the City, or events focused on one particular type of cuisine. Attending these types of events can help you see, in real-time, what your competition is doing and what makes them stand out.

Again, you can ask your own customers for suggestions during the event. What do they enjoy the competition? What do they think you could do better? It can be hard to ask for this type of honest feedback, but if you can listen without taking the critique too personally, it can help your business grow exponentially.

Hire a Restaurant Consultant

Competitor analysis is time-consuming, and it can be difficult to be unbiased. Sometimes it can also be overwhelming to figure out what you should do, and how to prioritize those suggestions. Sometimes when comparing yourself to the competition, it can be too tempting to only focus on the places where your restaurant already excels.

In these types of situations, hiring a restaurant consultant may be helpful. A restaurant consultant will be able to perform a competitive analysis for you. They will help you understand the key differentiating factors that make your competitors stand out, and what you can emulate or even improve on. Restaurant consultants are also already familiar with the competition in your area. This means they will likely already have insight into where restaurants advertise and how they obtain customers. This insight may not be as easy for you to obtain, especially when you are already focused on running your own business.

Restaurant consultants can take their research and other insights to help make a plan. They will help you prioritize, and possibly even implement, the recommended changes. By developing a plan for you, you can more easily use the competition analysis to become one of the best restaurants in your area, without having to do as much of the research yourself.

Once you’ve studied your competition through different channels, or received insights from a restaurant consultant, you can use the different types of information to make improvements to your own restaurant.

Exceed the Positives

Take the things your competitors are doing well, and do not simply emulate them – excel (where possible). Do your competition’s customers appreciate that they can place a very custom order on a competitor’s website? You can build an ordering system on your website, and an app as well. Do customers love the fact that they get a free meal on their 10th visit through a punch card loyalty program? Maybe you can offer a free meal for every nine visits through a digital rewards program.

While it is not possible to exceed every positive you discovered for your competition, even choosing one or two can make a substantial difference.

Exploit the Negatives

Every business has areas where it can make improvements. Outperform your competition in the areas where they are weak. For example, if a competing restaurant has a lot of negative reviews about their employee’s attitudes and behavior, make sure you train your employees to be polite and positive. Offer training materials that teach your employees how to respond to negative feedback. Create policies for refunding money to customers and making mistakes right.

If customers complain about the wait times at your competition’s restaurants during the lunch rush, maybe you can simplify or streamline your own lunch menu so that you can become known as a quick (and delicious) option.

While there are downsides to customers having the option to choose restaurants that aren’t yours, you can utilize this competition to your advantage. If you pay close attention to what others are doing, you can use it to make your own restaurant the best it can be.

8 Ways That Brand Positioning Will Help You Grow Your Business

With the correct brand position, it’s your business driver, helping you to inform your messages about marketing, how your services are shaped and even how you structure your prices.

The success of your business is influenced by strong brand positioning. But many highly competitive companies have difficulty in positioning themselves and explaining why their business matters. It is difficult, but critical, to do this right. Your customers will not know whether to purchase from you or from your competitors if you fail in this.

In short, positioning is the means by which your brand is markedly distinguished from its competitors. It’s all about what you offer, the value and the position you hold in your intended audience’s mind. Defining a clear position allows you to check your perceptions of the market and to improve the position of your product and/or service upon that market.

How can your company benefit from brand positioning? Here are several different ways here:

1. Brand Positioning Differentiates You in the Market

The world doesn’t need more widgets. However, when your company or your products or services provide an unprecedented proposition, solve an unsatisfied need or deliver the desired experience, Brand Positioning will help you differentiate yourself from the crowd.

Brand positioning allows you to stake out a unique territory (e.g., an industry specialty or a highly specialized service offering) for your business where no competitor will dare to venture because they will be labeled as a “me – too” company, just following in your footsteps.

2. Brand Positioning Cuts Through the Noise

A clear brand position allows you to communicate and reach your target audience efficiently and effectively. We are bombarded every day at every corner with marketing and sales messages. Everyone is fighting for your attention. By speaking directly to the people you intend to attract, your Brand Positioning breaks through the clutter in the midst of all this noise. Your brand is seen and heard clearly instead of shouting to an empty room or to a crowd that doesn’t care about you.

Your Brand Positioning breaks through the clutter in the midst of all this noise.

3. Brand Positioning Helps You Become a Specialist

You will be forced to focus your services accordingly by laying claim to a particular feature or benefit through positioning. This, in turn, will make you perceive yourself as an expert in these services, which will increase your value to your prospects. This is especially important because “specialists” are growing twice as fast as companies that describe themselves as “generalists.”

Positioning helps to provide your business development team’s persuasive sales tools to nurture and close more sales. Unique brand positioning enhances the visibility of business and top – of – mind recall for prospects to help drown out the competition.

4. Brand Positioning Makes Choosing Your Business Easier

Consumers want decisions that are easy. To find the right one for them, they don’t want to screen 30 alternatives. They want to know who to trust and what to buy quickly and easily. Brand Positioning deliberately and subconsciously triggers an emotional response from your target audience. If in the shortest amount of time the right levers are pulled, you increase the likelihood that people will decide “yes.”

5. Brand Positioning Allows You to Compete on More Than Just Price Alone

Whether the mass market uses your brand or you offer a high-end luxury item, Brand Positioning will provide you clarity on your specific value. Your value is what you offer to customers, how it best meets their needs, and how insufficient the alternatives that competitors offer are. You have nothing to offer but ambiguity without Brand Positioning. No one values ambiguity (or buys it).

No one values ambiguity (or buys it).

6. Brand Positioning Justifies Your Pricing

Sometimes your brand still needs price justification even when your value is known. Brand Positioning is where you identify your brand and compare it to the competition and its specific offering, informing you that your price point is strategic and justified. Are you more expensive? Less expensive? Is it obvious why? Are consumers going to respond favorably?

Positioning your business against the competition will assist you in deciding what new services to offer and how to price them. Are you a boutique company at a higher price? Or a low-cost, no-frills business? Which new services support this positioning and pricing?

7. Brand Positioning Informs and Improves Your Design

You will have the insight to make more effective decisions throughout the creative process once you have developed the core message needed to promote your brand positioning. Clear positioning drives communication that is clear.

Visual design needs to build a compelling story that involves strong positioning. If you don’t know what your competition uses, how would you know which colors, fonts, or symbols to use? What if, for example, you didn’t know that color influences the taste of consumers for particular foods? It’s not much different than writing good copy, the difference being that you’re communicating and creating perceptions through images.

8. Brand Positioning Empowers Your Brand’s Story and Messaging

How will you be able to write quality copy without knowing your brand positioning? If you don’t understand how your brand is positioned in the marketplace and your customer’s mind, it will be very difficult to write anything meaningful about yourself. Communicating to an audience is almost impossible if you do not accurately understand the uniqueness of your brand or competition you face.

So asses your brand and ask yourself these questions: is your brand positioned to…

Compete with Confidence? A strong starting point helps you understand, recognize and embrace your meaningful difference to the people that matter to your growth. Look at your competitors to see if you need to change your positioning. How will you compete with the other brands that your audience is comparing you to? How can you best position your brand against any new competitors that may sprout up in the market?

Show people the value of your brand? Your positioning should make your brand more meaningful to those who already understand your brand. You need a deep understanding of your target markets in order to create meaning. Did their behaviors, ways of thinking, principles, needs, ambitions, fears, frustrations, joys, and fantasies change? Work to create simple and meaningful positioning that you can tailor to the target markets of your brand. Work to create simple and meaningful positioning that you can tailor to the target markets of your brand. Positioning that doesn’t fit your customer’s needs, and even foresees them, will struggle to remain relevant today.

Standout in the sea of competition? Your brand positioning should give your brand a coherent, recognizable and impactful picture. This picture distinguishes you from your rivals. What are your differences? Have they been changing with the market? What are your key differences as understood by your target audiences and internal teams? Is the differentiation steady and sustainable? Make sure you’re working to own the space that should separate you.

Make smarter and more informed decisions? The positioning of your brand should be a tactical and strategic compass. Consider whether your staff and leaders use your positioning to guide their strategic decisions to make sure of this. If your leaders do not make important decisions that match your positioning, it’s time to reset and align. Your brand will be more competitive and adaptable when you use positioning to make long and short-term decisions. So bear in mind that long-term successful positioning always leaves room for growth.

Brand positioning, done correctly, can make a marketing powerhouse for your business. It can help focus your services, marketing message, and prospects appeal to your business.

Brand positioning, done correctly, can make a marketing powerhouse for your business.

Highly focused positioning allows you to build a powerful and compelling message around specific areas of expertise that will appeal greatly to a targeted audience in need of your premium services. That’s why it’s so important to have a brand positioning strategy. It gives your prospects value, gives them something to be interested in, and ultimately will persuade them to purchase from you.

When it’s all said and done, Brand Positioning is the most crucial singular part of developing a brand by allowing you to define where you fit into the vast sea of your competition.

The Ultimate Guide: How to Start a Restaurant

How to Start a Restaurant

If you’ve looked around online about how to start a restaurant, it’s likely that you’ve seen an article or two talking about all the reasons you should not even try.

But don’t listen to these naysayers — it’s your dream, so go for it. Even after hearing all of these arguments of these pessimists, if you’re still excited about pursuing your dreams of being a restaurant owner, then we’ve got the perfect step-by-step guide that you’ll need for starting a successful restaurant.

Three Foundations of Opening a Restaurant

Before you get hung up on too many ideas, focus on these three foundations of starting a restaurant:

  1. Pick a Relevant Concept.
  2. Hire the Right Chef.
  3. Location, Location, Location.

There’s nothing that can ever really prepare you for starting a restaurant, no matter what type of background or level experience you came from. No matter how much you read, how many videos you watch, how many seminars you go to, there are some things that can only come from the experience of being a restauranteur. However, with this guide, we will do our best to make sure that you are set up for success, and are fully prepared to make the plunge.

Finding your perfect Niche

In our experience as both restaurant branding experts and passionate foodies, we know that there are many options out there as far as concepts that you could consider. Each one requiring a certain set of skills in order to keep them running effectively.

As you consider starting your restaurant, try to find opportunities that you can take advantage of. What food, service, or convenience have you found missing? Is there a need in your market that is still unfulfilled?

As you consider these questions, if you find that it’s not meeting your options enough, maybe consider looking at the latest restaurant trends for inspiration.
There are plenty of unique, and fun concepts out there – so there’s no need for you to create something from thin air.

Should You Choose a Franchise?

As you are dreaming about one day opening a restaurant, you might be thinking, “I don’t really want to reinvent the wheel, but there is a big need for a fast and casual Indian joint in my city!”

If that sounds like you, then it might be good to start looking for a franchise opportunity.

The great thing about a franchise is that most of the work has already been done for you. Organizing a menu, conceptualizing interior design, and making a marketing plan from scratch, are all things you don’t have to worry about. Plus, the allure of an already recognizable brand will help draw in customers for you.

The brand recognition that comes with franchise restaurants, as well as a lower failure rate than independently owned restaurants, are all part of the reason franchises are so appealing.

However, just like anything, owning a restaurant franchise has both pros and cons. Despite all the benefits that come with launching a recognizable brand with a proven plan for success already in place, there are a few downsides.

First and foremost, franchises aren’t cheap. Often times you’ll need a large sum of personal assets instead of a loan, and buying the rights the franchise are typically non-refundable.

In addition to this, you don’t have flexibility with the business model, so when it comes to getting creative with running your restaurant, your options are pretty limited. For instance, if your franchise headquarters opts to do a complete overhaul of its decor, then you’ll have to put out the money for it, even if you don’t want to. If you’ve chosen the franchise route, then make sure you consider these things and do some more research into your specific franchise before you dive in.

A Better Business Plan: Crafting a Brand Strategy

In all honesty, when all you want to do is get cooking in the kitchen, crafting unique and delicious recipes, and making your customers happy, the last thing you want to do is slow down and begin writing a business plan.

Nothing sounds less fun than researching, creating spreadsheets, graphing charts and analyzing statistics.

But, before your eyes glaze over and you move on to the “fun” steps of opening a restaurant, you should ask yourself the following:

Would you try and create a dish you’ve never made before without ever even looking at a recipe? No.

Just as a recipe gives you the guidelines, roadmap, and action plan to create a stellar dish, a brand strategy will give you the recipe to make sure your restaurant is set up to win, not fail.

This step is often the difference between a restaurant that will fail or one that will succeed. Or a restaurant that is doomed to make just enough to pay bills or one that is very profitable and successful.

A brand strategy gets you thinking deeper

A brand strategy gets you thinking deeper about the future of your restaurant, the market you’re serving, the risks and challenges you’ll face, and the viability of seeing your ultimate dreams become reality.

When your brand strategy is well thought out and refined, you’ll have a better idea of which steps should come next for you as you are opening your restaurant and pursuing your dream.

Here are the 12 biggest questions you should answer as you are planning for the future of your restaurant:

Decide What kind of restaurant do you want?

There are so many types of restaurants in all shapes, and all sizes. From fast-and-casual concepts to food trucks, to cafes, bars, or major franchises. Step number one is narrowing down your ideas to a specific concept.

Write out a long and short answer to this question, and then get familiar with explaining it to family, friends, investors, lenders, and future customers. This will be like your “elevator pitch” in a way. It’s something you’ll need to practice repeating over and over.

Who is your restaurant for?

Before you can begin getting customers into your doors, you need to know who they are. This is also known as your target market. It’s a group of people who your restaurant is meant to serve.

The more specific you can get, the better. When you know your customer deeply, and intimately, you’ll be able to craft a better menu, design, environment and better overall experience for them.

When you understand your customers’ decision making, their fears, their desires, their motivations – your marketing campaigns will be much more effective and you’ll reach your ideal demographic more easily.

When you make these customer profiles, it’s good to be aware of how many households in the area you plan to serve are in your price point. You’ll need to find a location that is close to customers who can support your prices, and that isn’t already flooded with similar restaurant concepts. This decision is hugely important in the long-term success and growth of your restaurant.

Who are your restaurant’s main competitors?

Many business owners might tell you to never worry about your competition and just run your business with your nose to the ground. Only worry about yourself.

This could be good advice in the sense that you don’t want to mindlessly copy your competition, always worrying about what they’re doing, and trying to mimic them, or “one-up” them. However, when you’re first starting a restaurant it’s vital to know who your primary competitors are in the market.

You’ll want to know how they are similar, and how they are different from your restaurant. Do plenty of research to identify your competitors, as this will save you from the frustrations and failure that can come from creating a restaurant concept that is already too saturated or is positioned poorly against the other options.

Where’s the best location?

You’ve heard it before, “location, location, location.” It’s been said millions of times, yet it still rings true to this day. This step is one of the most important steps in the success of your restaurant.

By now you should have already narrowed down potential locations based on defining your target market and looking at your competition. You should be able to make some smart conclusions from these things.

For instance, it would be silly to put a high-end steakhouse in the middle of a low-income neighborhood.

With the same token, a trendy taco truck probably wouldn’t do well near a gated community of retired elderly people. Although, who knows… everyone loves tacos!

What’s your unique value proposition?

Don’t let this word scare you, it’s not complex, and really all that it means is that you should find what makes you different from your competition.

What is it about your food, your storefront, your atmosphere, your location, your pricing, that makes you unique and stand out among your competitors?

Maybe there’s something special about your specific location, or maybe you offer a very unique customer experience, or maybe the ingredients of your food are locally sourced and organic. There are many ways that your restaurant can stand out amongst the competition, so it’s important to discover this for your own restaurant.

One important factor of discovering and defining a unique value proposition is the menu that you offer. It’s important to test it, even on a small scale. Host tasting parties, or pop up events, leading up to the grand opening of a restaurant. This will allow you to gain important feedback, so you can know how to serve your customers best.

Your menu may change over time, but with a well-defined brand strategy, unique value proposition, and understanding your customers, the menu that you launch with should serve your restaurant well.

How will your customers find your restaurant?

How are you answer this question will be the beginning foundation of your restaurant marketing strategy.

Unfortunately for businesses, especially restaurants, the idea of “if you build it, they will come “doesn’t apply. Simply existing, is usually not enough for a restaurant to survive let alone thrive.

Since you now understand your customer, be thinking of ways that you can connect with him. Will you connect through paid advertising, social media campaigns, rely on word-of-mouth? Word-of-mouth referrals are great but aren’t always enough. You need to have a plan of action of what, and who, you’ll need in order to help get your message out.

Some other ideas for spreading the word could be inviting food bloggers to visit your restaurant, hosting a large grand opening event and inviting the community, and of course ensuring your restaurant is listed on Yelp, OpenTable, and has updated listings on Google and other social platforms.

Also, before you open you want to make sure you have a press kit, Nice photography, a video, and an “about” section of your website ready for any local or national news organizations that show interest.

What resources will your restaurant need?

You’ve heard it said before, it takes money to make money. And the same rings true for restaurants.

You’ll need to know what it will take to open and operate your restaurant. What types of resources will you need? Will you be the head chef, or will you hire a head chef? What type of technology will your restaurant use to process payments, or book reservations online? How many employees will you need? Will you hire an agency specializing in restaurant branding to design your logo, or have your nephew design it?

Take time now to list out all of the expenses your business will incur; both one time and recurring expenses. Be diligent, and as precise as possible.

Don’t forget to search for costs related to other mundane and operational things. Utilities, pest control, cleaning services, laundry services, etc.

If there are other needs that are not related to money, list those out as well.

How will your restaurant make money?

You can have the best idea in the world about what food or service you offer that customers will love, but that doesn’t always mean that your restaurant concepts will succeed and be profitable.

The effort that you put into your business model through developing a brand strategy is often what will determine how successful your restaurant will be. Will you generate just enough revenue to get by? Will you be able to make enough to cover all of your expenses? Will you eventually be able to make more money, and be profitable?

This is often where many restaurants fail because they don’t take the time thinking this through. The average restaurant thinks that simply opening their doors, will mean that the restaurant will make money.

That simply is not the case.

You’ll want to think through things related to the pricing structure of your menu, how you will choose your staff, what sort of insurance and licenses you will have and how much they will cost, and many other tax obligations, and red tape you’ll have to jump through.

How long will it take for your restaurant to make a profit?

It’s typical for a new restaurant to start out with a loss when they first open up, the first year is especially difficult. As you continue to invest in the necessary resources and work towards understanding and acquiring new customers, and work out all the kinks that come with operating a restaurant, there is a learning curve.

However, after some time, if you’ve done your due diligence, you’ll be making a good profit on top of your expenses.

Consider using a revenue forecast model to figure out how long it will take your restaurant to recoup your initial investments, to simply breakeven, and eventually run a profitable business.

What values will you never compromise in running a restaurant?

When you are in the thick of operating a restaurant, it important to be making good decisions at every turn and knowing what you stand for is critical to that.

You should define what values are most important to you, in business and personally. What values do you hold closest to you? What’s something that’s non-negotiable?

Write these values down, and limit them to two or three. This doesn’t mean you can’t have more than two or three values, but as the saying goes, “ if everything is important, then nothing is important.”

Creating and documenting these core values at the start will help you in your decision making, your operations, and every decision you make for your restaurant. From choosing the right vendor to how your menu should evolve over time, or critical decisions during pivotal times.

What’s your staffing plan?

Great service makes food taste even better.

It’s important to have skilled, hard-working, and qualified staff. And this begins with finding great candidates.

You can certainly find candidates through the usual means of job boards and website listings, and there’s always the classic sign in the window approach. However, finding the best quality team members is often achieved through personal connections.

Whether it is your head chef, a friend, or family member, reach out and start looking for the most reliable candidates possible. It’s very likely that your chef will want to bring people they have a past working relationship with, so be sure that these people fit into your company‘s culture.

Finding them is just one challenge, next you’ll have to train them.

Solid foundational training related to rules of food service and best practices in customer service will set your company apart, and a lay out a precedent early on with your restaurant.

When your team members are engaged, and you have a staff that supports you and your vision, and delivers exceptional customer service – that is a recipe for success. Your customers will notice, and their loyalty to your brand will strengthen.

What’s the endgame?

Have you considered what your endgame is? Is your plan to build a restaurant that one day you hope to sell, or are you hoping for a long-term sustainable business for you and your family? Do you simply want to start a small restaurant that you can pass down to your children and your grandchildren? Or are you wanting to start a franchise that will revolutionize the industry?

Understanding where you want to end up and how you want to get there, and when you want to get there, will help you make informed and smart decisions along the way.
Before going any further you should take time and outline what that looks like to you and create steps along the way.

If you want to reach your goal in 10 years, what should you be doing on an annual basis? What action should you be taking on a monthly basis to reach your annual target? What thing should you be focusing on a weekly basis to reach your monthly goal? And what should you be doing on a daily basis, to reach your weekly goal?

Make Your Restaurant Official

Now that we have the big picture game plan out of the way, it’s time to get down to business, making it official.

The early stages of starting a restaurant are filled with more paperwork and legal red tape to jump through than at any other point in your business.

This is definitely not the most exciting part of opening a restaurant, but be diligent. Taking time now to ensure that you properly establish your restaurant from the beginning will save you many potential headache and hazards down the road.

Below are some of the primary steps you’ll need to take in order to get your restaurant legally established with all of the proper paperwork for federal, state and local authorities.

Register Your Restaurants Official Business Name

If you’ve chosen a unique name for your business, then you should go and file your “Doing Business As” (DBA) name with your state’s agency.

Even if you have different future plans for the legal structure of your restaurant, filing a DBA at this early stage will protect you from getting your name stolen from you by a fellow restaurateur. It’s really simple and usually only costs a small amount to register it, so don’t wait.

Pick a Legal Structure for Your Restaurant

The next big step for getting your restaurant legally sound is to decide what sort of business entity is right for your restaurant.

Whatever structure you decide now will affect how you file for your state and federal business taxes, will influence how you split duties and roles of your team members, and determine how you will be held liable in the event that legal action is taken against your restaurant.

At this stage, it can be a good idea to consult with a business attorney to help you make the right choice because there are a lot of long-term issues that can arise from choosing the wrong option at this stage.

As you are considering all options, here is a basic overview of the various business structures you can choose from.

Sole Proprietorship

A sole proprietorship is the most basic business structure, and a simple one, but there are upsides and downsides to this structure.

In this structure, you alone own the company and are personally responsible for any liabilities or legal claims associated with it.

The best part of this structure is that you don’t need to take any formal action to start.

If your business is operating under your own name, you can start right away. Or, if you have a clever idea for your business’ name, then filing a DBA will be all you need.

This could be a perfect structure for you if you won’t be taking on any fixed assets or hiring employees: examples would be a food truck, pop-up restaurant, or a very small operation.

Partnership

This structure is meant for a single business that is owned by two or more individuals.

There are a number of partnership structures you can select from, including a general partnership, joint venture, or a limited partnership.

The downside, and why most experienced entrepreneurs don’t recommend the partnership structure, is because there isn’t much protection from liability offered.

As you are considering this, also remember that business partnerships are very much like a marriage. It should be a long-term commitment, and you are legally and financially tied to them.

Because of this, you should do your due diligence in choosing a business partner who is in it for the long haul and shares your same goals and values. Be sure that you are both very clear on the terms and expectations, and put it into detailed writing. Define the roles and responsibilities of each partner.

Be very clear and communicate well upfront with your partner, before anyone “signs the dotted line.” This could save you from potentially catastrophic issues that may arise in the future.

Corporation

The corporation is a very complex business structure typically reserved for larger organizations, or for those that have a particularly high liability — needing some extra reassurance.

Many attorneys will recommend this is the legal structure for your restaurant. And it scales well as you hire more employees.

However, keep in mind that filing as a corporation requires you to have Board of Directors, and has more stringent tax filing requirements.

So be sure to consult an attorney and be prepared from a more complex process.

S-Corporation

These are very similar in structure to a C-Corporation, yet it’s different in that it’s taxed on an individual business owner level, instead of as a corporation.

If you think that the structure of the corporation would be a good fit, but don’t want to have to deal with complicated dividend tax filings, an S-Corp might be a good route for you.

Limited Liability Company (LLC)

An LLC offers a liability structure similar to a corporation, yet flexibility and simplicity of a sole proprietorship or partnership. The Limited Liability Company (LLC) structure has grown in popularity over the years because you are able to get the “best of both worlds.”

Restaurateurs who select an LLC for the business structure can choose between a single officer, a partnership, or a limited liability corporation.

When selecting between various options, always it’s important to consult with an attorney.

This is an important decision that will have a potential long-term impact on your business, so be sure to do your due diligence, research, and consider all the options.

Get a Tax Identification Number

Your tax ID number, also known as your employee identification number (EIN) helps the IRS keep track of your restaurant for tax purposes.

It’s almost like a Social Security number for your business.

If you plan to hire any employees, such as waitstaff, hosts, hostesses, chefs, cooking staff, or even dishwashers, you’re going to need this number to ensure that your restaurant is on the up and up. This is especially important if your restaurant is established as a corporation or partnership.

You can easily obtain an employer identification number by applying online at the Internal Revenue Service website.

Register Your Restaurant for State and Local Taxes

In addition to federal business taxes, almost all US states and territories require you to pay income and employment taxes for your business.

Some states even have additional requirements, such as state-mandated Worker’s Compensation or unemployment insurance.

Be sure to check out your requirements, since filing procedures vary widely from state to state.

Get Secure Permits, Insurance, and Licenses for your Restaurant

Every four years the FDA will update the food code, but the specific details of what is required, strongly encouraged, or just optional can vary depending on which state you live and sometimes even between specific counties.

We recommend starting by finding your states food service code regulation department. Be sure to check your local health department to ensure that all of your bases are covered.

It’s also a very good idea to keep a calendar to remind yourself of renewal, and payment due dates. You don’t want to experience the frustration of walking into your restaurant one day and find that one of your permits or licenses has expired!

Get Food and Health Code Licenses

No matter the size of your operation, it will require some sort of official approval showing that you are safely handling the food and drinks that you serve.

The specific names of these can vary depending on your establishment, but they all certify that you’re safely handling, storing, and serving the food in your restaurant. And if you thought that having a food cart or a simple booth at a festival will get you out of this, think again. They have licenses for those too.

Alcohol has its own special sets of permits and rules. These will not only cover the protocols around safely serving alcohol, but also deal with training on how to handle customers that have had a little too much to drink.

Health Department Permits

Isn’t this the same thing that we just talked about? No, not exactly.

The health department has its own specific standards and guidelines around how you store, prepare, and serve your food. Your restaurant will need to be inspected to comply with operational standards as well as consumption safety.

Things like maximum occupancy, ventilation, fire hazards, sink placement, restroom regulations, or food preparation surface types, and so on.

Make Your Restaurant Compliant with the Americans With Disabilities Act

In 1992 the Department of Justice passed the Americans With Disabilities Act to protect consumers and employees with disabilities from being discriminated against, and allowing places in public to provide proper accommodation.

The complete details of the ADA are available, but the Small Business Administration has also created a short guide for small businesses to understand what is expected of them.

Besides all of the specifics of various angles, measurements, and legal jargon, it really just boils down to having proper accommodations in place for people with disabilities. So they can safely park, enter your restaurant, order food and eat at a table.

Find Insurance for Your Restaurant

Despite jumping through all the red tape and every legal hoop with the health department, you still need some added safety nets in place.

There are many, many small business insurance options. There’s one for everything, and some are way more beneficial than others.

Specific requirements vary depending on where you live, and how you were funded, but at a base level you want to consider these:

  • Property Insurance
  • General Insurance
  • Life Insurance
  • Auto Liability
  • Unemployment Insurance
  • Liquor Liability
  • Worker’s Compensation Insurance
  • Fire Insurance
  • Food Contamination
  • Loss of Business

Funding Your Newly Opened Restaurant

To be quite honest, funding a restaurant isn’t easy.

Even if you only hope to open a small café, all of the costs associated with construction, staffing, permits, equipment, marketing, and of course the food, can add up very quickly and can easily be more than what you have in your bank account.

You’ll likely need some funding from somewhere to start your restaurant unless you happen to be independently wealthy.

Restaurateurs choose to finance their restaurants in many different ways. Some reach out to friends and family, others will get a loan, and some work with investors.

Below we are going to review some financing options that can be considered.

Small Business Loans for Starting a Restaurant

The most common way that many small businesses get financing is through borrowing funds through a bank or lender.

The lending industry has grown tremendously over the years, and now has a wide variety of loan products that can meet the needs of any entrepreneur.

If you think this could be a good route for you and help you fund your restaurant, then it would be worth taking a moment to review the most common loan types used.

Term Loans

This is probably the most well-known type of loan. A term loan provides a set timeline and repayment structure, with fixed or variable interest rates.

The terms of this loan will vary depending on your business needs, and your credit rating. Terms can range from one year with daily payments up to a five-year with monthly payments and everything in between.

SBA Loans

Because small business lending is so risky for many commercial lenders, they’ve been slightly hesitant to let the small business owners borrow money, and this is especially true with new restaurant ventures.

Due to this, the Small Business Administration began to guarantee up to 80% of the loan principal for term loans with participating lending institutions. This might be a viable option if you are already experienced in the restaurant and food industry. If you are not, you likely won’t be considered.

The SBA offers many different loan programs, including some for aspiring restaurant owners.

If you plan to go this route, you will certainly need to have all of your ducks in a row. Write a great business plan that highlights the need for your restaurant and the uniqueness of your concept. Also, be prepared to have anywhere from 20% to 30% of the total loan amount in cash — or take out a mortgage on your home.

Keep in mind that while an SBA loan may make lenders more willing to consider your application, the SBA loan process is very lengthy and can take several months.

Equipment Financing

Equipment financing might be a good choice if you are needing cash to make a large purchase such as point of sale technology, furniture, or commercial kitchen appliances.

This type of financing is very similar to the structure of a car loan, with the amount that you can borrow depends on the price and type of equipment that you’re buying.

You likely won’t be asked to put up collateral either, because the equipment itself will serve as the collateral.

The terms of this type of financing typically are a fixed interest rate — often between 8% and 30% — along with a fixed term length which makes your payments the same each month.

Short-Term Loans

For a restaurant with smaller and immediate needs for finances, a short term loan can be a lifesaver. These loans are typically between three and 18 months and are similar to traditional term loans. They are usually in the range of $2500-$250,000.

Short term loans can get you to cash in hand in as little as two days, helping you make rent payments, pay food vendors, cover your payroll, or meet other immediate overhead expenses when cash is tight. Interest rates can be as low as 14% on these types of loans.

Line of Credit

The most flexible form of financing for a business is a business line of credit, which gives you capital to draw upon to meet your business needs.

After being established, you can draw from your line of credit just as you would a personal credit card. Use your line of credit for more working capital, buying inventory, paying off other debts, or getting you through seasonal cash flow issues.

If you are planning to apply for any type of small business loan at any point in the future, be sure that you regularly audit your personal and business credit reports, and do everything you can to improve your score.

Aside from your annual revenue, length of time you’ve been in business and your average bank balance, your personal and business credit scores are often the most important factors that determine if you’re eligible for a small business loan.

Business Funding Alternatives

There are also other ways to finance a restaurant. Here are a few alternatives you may consider to help cover the costs of your new restaurant venture.

Angel Investors

Every single day there are thousands of people who are investing both finances and their expertise into what they believe is the next big thing.

Angel investors have the means and experience — and have often been very successful entrepreneurs themselves — to personally invest in a variety of restaurant ventures, lending their resources and expertise, and furthering their own income as well.

When an angel investor provides funds and expertise, you will also be giving them a certain amount of equity in your business, and often times they will have a certain amount of decision making power.

Just as you think through a partnership, be sure that you think through working with an angel investor. You want to make sure that you both are wanting the same thing for the restaurant.

Venture Capital Firms

Venture-capital firms are similar to Angel investors, but they are more organized and can fund projects on a much larger scale through purchasing percentages of a business in a startup’s “round” of funding.

Most venture-capital firms require a minimum investment to be in the $1 million range, so you should only consider this if your goal is to build a very large scale chain of restaurants, as opposed to only a handful of locations.

Funding a restaurant through a venture capital firm can also be highly competitive most restaurant owners won’t meet the criteria a venture capital firm would seek.

Friends and Family

You’re likely to have the support of your family and friends as you start your restaurant, and some may even be interested and willing to invest funds to help it succeed.

Accepting money from friends and family may often have strings attached, despite everyone’s best intentions. Loss of income and a failing restaurant can ruin relationships.

If you go this route, strive to keep all interactions as professional as possible.

Negotiate as much up front as you can, and communicate expectations as clearly as possible. Be sure to offer a well-thought-out proposal just as you would any other investor, and put the exact terms of the investment in writing.

Restaurants will often offer “dining perks” for these investors. Think of it as a permanent reservation or discount to sweeten the deal.

Crowdfunding

Crowdfunding has grown significantly in popularity over the years. Websites like Kickstarter or IndieGoGo are perfect for small ventures that are simply looking to offer products or goods in exchange for a contribution.

Larger scale startups may consider equity crowdfunding platforms like EquityNet. This type of crowdfunding will sell company equity to capital investors.

You should not underestimate the value of a few hundred pledges, each around $10, $20 or even, $50. And if your campaign goes viral, your possibilities grow even more. It can all add up fast!

A Final Note

At the end of the day, starting a restaurant is not for the faint of heart. There are many challenges ahead, and many questions must be answered.

The restaurant industry is one of the most ruthless, cutthroat, notorious industries. The failure rate of restaurant startup is significantly higher than any other industry.

Although we covered a lot of details surrounding what it takes to start a restaurant, the bottom line is that you won’t fully understand these challenges, until you’ve experienced them.

Before starting your restaurant, take time to make sure you’re ready to jump in – mentally, financially, physically, and relationally.

Make sure you seek out help from mentors and experts in the industry.

Any additional amount of work you can do, before getting too far into the process, can save you a lot of wasted time, energy and frustration down the road.

When the time comes for you to develop a brand and marketing strategy for your restaurant — please reach out to the restaurant branding experts at Longitude. We’d love to chat.

The Do’s and Don’ts of Writing A Great Tagline for Your Restaurant

The restaurant landscape is rapidly changing with the pace of innovative technology. Five years ago, the concept of quick-service restaurants (QSR) was shifting away from just service at the counter. Today consumers can order online and pick up at the window. As a restaurant owner, this means that you have even less time than before to connect your brand and the consumer.

Tag lines can be effective to grab attention and resonate with the buyer. However, building an effective tag line that represents your brand is important and there are some clear do’s and don’ts to consider. This article will explore a few of these considerations.

What is a Tagline?

First, let’s define what a tag line is. A tag line or “tagline” is a short text which clarifies a thought, usually through a dramatic effect. A few examples might help.

  • Subway – “Eat Fresh”
  • Nike – “Just Do It”
  • Bounty – “The Quicker Picker Upper”
  • Apple – “Think Different”
  • KFC – “Finger-Lickin’ Good”
  • Dunkin’ Donuts – “America Runs on Dunkin”

Nike’s tag line is one example of a tag line that suggests dramatization. Just Do What? It? Anything you want. But you can’t do it unless you’ve got Nikes on. While this is interesting, the best tag lines in the QSR and restaurant space are those that are well crafted to help buyers instantly understand your offering.

Eat Fresh is a pretty clear tag line of how Subway and consumers might perceive Subway in the market place.

Restaurant Tagline “Don’ts”

First, according to Building a Story Brand (2019), talking about yourself shouldn’t be part of your tag line. Buyers don’t care about your restaurant the same way you might. What your customers really want to know is what your restaurant provides and why your brand is the better choice for a meal.

Second, Don’t make your tag line boring. This is where a creative brainstorming session with a small diverse group of people can make magic happen. The worst thing you can ever do to a restaurant tag line is to make it boring. You must capture the energy of your menu, your brand positioning, and your culture. Take a look at this mock example:

“The Tri-State Region’s Highest Rated Beef Sandwich for a Quick Lunch”
or
“Prime rib sandwiches made at your speed. Built to fill you up.”

In the first example, it’s all about business. You’ve seen this kind of tag line before probably. It’s just a statement of fact. Boring. Right? The second example has an emotional connection. You need speed and a good meal. By keeping the tag line message relevant to customer needs, they know how to get what they need.

The final “don’t” for this article is don’t use jargon and inside language. Consumer’s don’t know what QSRs are and they don’t care that you might be a QSR over a table service establishment. People can’t figure out tag lines that are complex and full of jargon.

People can’t figure out tag lines that are complex and full of jargon.

One last don’t in the world of tag lines. Don’t be offensive. AT&T used “Reach out and touch someone” just creepy if you think about it. How about the example from Dr. Pepper Ten? “It’s not for women” or the Old Spice example of “Smell Better Than Yourself”. Offensive tag lines just don’t work well. They can push consumers away. Just don’t do it.

Restaurant Tagline “Dos”

First, keep it simple.

Make sure a 5th grader can read and understand it. Don’t just think they will. Ask them. If people have to work hard to figure out what you want to say, they will ditch your brand altogether. Eat Fresh comes to mind again with short, clear words. You would expect and Subway you will eat and that the food will be fresh. Any 5th grader can read and understand this.

Second, short and simple is always best.

Keep your tag line short. Less than 5 words is ideal. According to Dr. A. L. Pradeep in the Buying Brain the subconscious mind is making the buying decision most of the time when it comes to food. You tag line must say a lot with almost no words. None of the tag lines in the examples above have more than 5 words. Third, try to capture your unique value point in your tag line. What is it the customer will gain? How will your restaurant make customers’ lives better? Why is your restaurant better than the ones across the street or next door?

Finally, building a tag line should never trump building a brand to support it.

Your brand is your culture. It is the experience employees, patrons, and the community will experience. The most important aspect of building your tag line should be your ability to connect it to your culture.

Concluding Remarks

Great tag lines serve as brand triggers. When you see, hear a tag line you should be able to associate the tag line with the brand. Can you label 5 or these brands just by the tag line alone? If so, they work.

  • The breakfast of champions
  • The happiest place on earth
  • Can you hear me now? Good
  • Melts in your mouth, not in your hands
  • I’m loving It
  • Imagination at work
  • What’s in your wallet?

You probably got at least 5 of these tag lines right. Each of these tag lines serves a single purpose. They trigger your subconscious mind to connect the words to a brand. Tag lines are important in every industry but really important for restaurants to better define your brand and at most times the menu.

To summarize consider writing out everything you’ve heard about your restaurant from others along with what you think about it. By now you should have three or four good paragraphs. Spend the time here to lay a foundation to help you design your restaurant’s tag line. If you don’t have much keep going. Dig deep.

Now for the fun part. Make ten copies and distribute them to 10 people. Have them read what you wrote and circle only five words that jumped out at them. Then ask them to make a quick note as to what that specific word meant to them. After this approach, you will end up with a clear message that resonates with people you want to serve. If you serve prime rib sandwiches at lunch, you might get something creative like Prime Sandwiches, Prime Time.

Could Your Logo Be Turning Away Customers?

While your logo isn’t the only factor in driving a successful business, it is one you cannot afford to ignore.

According to Dr. A. K. Pradeep, consumers make buying decisions much quicker than one might imagine. In fact, the subconscious mind is responsible for driving nearly all of our buying decisions. This points to the idea that the initial perception of an image such as a logo can more important than many might expect. The colors, fonts, styles, patterns, layout, etc. can all play a role in making a good first impression on the buyer’s mind.

In addition, paying attention to the details of your logo can create the right perceptions about what your business is and what you stand for. This article will provide critical considerations when it comes to your brand’s logo.

According to Forbes, luxury consumers seek out the perception of value just as much as the value of the product or service they purchase. When it comes to a logo, perception is literally everything. There are three brand strategies you can use to ensure your brand’s logo is perceived at the most optimal state.

Build an Image That People Can Get Behind

The John Deere logo is an example of an iconic brand that is more than 182 years old. However, it’s the logo of the infamous Deer was created 27 years after the inception of the company.

The iconic image of a leaping deer was an image that connected consumers to the values of the brand. The iconic deer stands by the company’s push for perfection and prosperity. The idea of perfection and prosperity is depicted in the deer and have stood the tests of time.

However, building an image that people can get behind means you must understand your customer. You must take the time to discover who they are, what they stand for, what they believe, and how they react to what they see, smell, taste, and feel.

In most applications of the John Deere logo, people can actually feel the deer jumping off of the sign. The end goal of a great logo is to spark the desired feeling deep enough to cause someone to take action without thinking. You grab your favorite drink, food, clothing, etc. purely induced by the buying, subconscious brain.

Pay Attention to the Psychology of Color and Shapes

Color and shapes mean something. There are thousands of studies on the psychology of color and shapes. What this really means is that you should pay attention too.

Looking back and John Deere of recent years, the green stands for luxury and good taste while the yellow depicts positivity and demands competence. Both these colors together and the streamlined exact shape of the John Deere logo as it stands today drives in deep to the subconscious mind the feeling of perfection from exact shapes, prosperity from the deep, dark green, and a sense of trustworthiness from the yellow suggestion of positively competent to get the job done.

What does the psychology and shape of your logo demand?

Engage Others in the Process

The last strategy is one of engaging others for feedback along the logo creation process.

Engaging employees, stakeholders, and customers is a tedious process at times but valuable to build a better connection between real people and what you want your brand to mean. Steps in the design process typically include brainstorming, conceptual sketches, rough mockups, and a final pitch of a logo solution. With each step of the process, there is more meaning unveiled through the use of colors, shapes, typography, patterns, and textures.

The brand then grows into something you will hang your livelihood on.

Getting good, honest feedback and input in what others are feeling when they see your brand helps make sure you get the best brand you can afford. One important note when thinking about engaging others, put a limit to it and timelines. Otherwise, you can end up in what is called analysis paralysis where your logo may go to die.

Keep it objective and on track.

These are 3 ways to build a logo which is strong enough to compete and beat out your competition. Having a logo that clearly communicates who you are and what you stand for at only a glance isn’t an easy task. Create an image that lies at the center of everything you do and represents you well.

Sources:
The Buying Brain: Dr. A. K. Pradeep

What’s the ROI of a Brand Strategy?

Business Minded vs. Brand Minded

Trying to convince certain business owners or executives to invest in a brand strategy can be a very tricky thing. In their mind, there’s never a right time and it’s rarely an important consideration. This is because to them, ROI isn’t clearly measurable. On top of that, most of their time is spent trying to solve complex business problems or putting out fires in their organization.

What these business owners may not understand, or may be too busy to hear, is that a well-built brand strategy could solve many of the problems they’re facing – often times before they even occur.

A well-built brand strategy could solve many of the problems they’re facing – often times before they even occur.

A brand strategy is a vital piece to any organization who wants to be competitive in the marketplace. Without it, you’ll likely face many problems and frustrations that you shouldn’t be facing. So why are some business owners and CEOs so apprehensive to make the investment?

Put yourself in the shoes of the average business owner or CEO. You have team members emailing or calling you every single day, vying for your attention, explaining to you what’s wrong, and bringing long lists of issues that they believe need to be improved. You have trouble finding support and talent you need for important positions and have trouble keeping the good talent you may already have. You’re burning through money – more cash is going out than coming in. Then you get a phone call from someone who asks, “Have you ever thought about a brand strategy to build a better emotional connection with your customers?”

You’ll say “no thanks” and hang up. It’s not only bad timing, you’re not even speaking the same language.

The problem is in the fact that when many business owners hear the words “brand” or “branding” they think coloring books, pretty colors, and painting classes with Bob Ross. CEOs and business owners are typically product driven, solution minded, or deeply focused on their operations. They want a mathematical equation to know that if they invest one dollar, they’ll receive two dollars in return. They don’t care to spend money on “unnecessary” things like a brand strategy to help their business grow.

Dollars and [Emotional] Sense

Many business owners or executives value cold hard numbers and metrics, not emotions and feelings. For them, if they don’t see a clear monetary value assigned to something, they’re not going to consider making an investment of time or money into it.

The average executive is more willing to consider a “business solution” versus a “brand solution.” The biggest failure in this thinking is the fact that these two solutions are, and always will be, tied together. You can’t separate the two. Your brand, your culture, your reputation, your core values, your market position – these are all foundational building blocks upon which a profitable business must be built. Without these clearly defined, your chances of seeing meaningful business growth are seriously stifled.

The biggest failure in this thinking is the fact that these two solutions [business and brand solutions] are, and always will be, tied together.

The ROI of Story

When an organization has a clearly defined strategy, and purposeful vision, it will make a direct impact on your bottom line. Your marketing efforts, sales, and advertising will all be improved. You can attempt to assign metrics to every investment you make and have spreadsheets for days, but without the right message, metrics don’t mean anything. Telling your team members or stakeholders that your mission is to generate X increased revenue within X amount of time isn’t casting a vision. It’s simply a goal. A vision must be something that everyone on your team understands and can buy into long-term.

A vision must be something that everyone on your team understands and can buy into long-term.

It should come as no surprise that finding and keeping talent is one of the most common challenges businesses face. The beautiful thing about a great brand strategy is that you’ll have a stronger brand story. When your employees are more engaged and understand this story, they’re going to be more engaged and perform better. When your team is engaged they will perform 147 percent better.

Your narrative will not only impact your employee engagement but will also have a big impact on the decision your customers make regarding doing business with you. When it comes to people deciding to buy from you, 72 percent of people make decisions based on a vision.

It’s clear that an investment into brand strategy can have huge returns, across multiple aspects of your business. Every real business wants to experience growth in some way. However, as you are growing are you truly increasing the value of the business you’re building? When you have a strong brand narrative and vision, this answer becomes easier to answer.

The Numbers Don’t Lie

In a study by McKinsey & Company, it was found that organizations with a clear story perform 20% better than those with a weak story and vision.

Additionally, powerful strategies will influence your plan of action for how consistent your voice, message, tone, and look is throughout various touchpoints with your audience. When companies are more intentional and consistent with their brand, they experience on average a 20% increased revenue versus those companies who are inconsistent.

If you’re still not convinced that you need a brand strategy, here are some other numbers that you should consider:

  • 91% of consumers said that they are more likely to buy from an authentic brand than from a dishonest brand. (AdWeek)
  • 82% of investors believe that brand strength and name recognition are becoming more important in guiding them in their investment decisions. (Reuters)
  • 64% of consumers cite shared values as the primary reason they have a relationship with a brand. (Harvard Business Review)
  • 48% of consumers expect a brand to really know them and be able to help them discover new products or services that match their needs. (Cube)
  • 77% of B2B marketing leaders say branding is critical to growth. (Circle Research)

So, next time you hear the words “brand strategy,” don’t think “pretty colors and painting class with Bob Ross” – think clearer decisions, better engagement, loyal customers, and more money in the bank.

6 Fatal Mistakes That Restaurants Commonly Make – and How to Avoid Them

As restaurant brand experts, it is safe to assume that we genuinely love everything about restaurants and the strong-willed, creative people who run them. If you’re ready to unveil your own brand, then we really want you to prosper.

It’s commonly said that 90% of restaurants will fail within their first year, and although that isn’t entirely true, it is true that new restaurants are much more likely to fall than established restaurants. In fact, 60% will fail within the first 3 years of opening their doors.

60% of restaurants will fail within the first 3 years of opening their doors.

With an ever-increasing world of consumers who are brand-conscious, we see first hand that whether a restaurant sinks or swims is largely dependent on the quality of their brand strategy and identity. However, we also realize that most restauranteurs are very busy, wearing multiple hats, working long hours – and most aren’t branding experts. This means errors are often made, or things overlooked regarding their brand strategy.

Because of this, I have pulled from our team’s experience in helping hundreds of brands over the last decade, and I’ve put together a list of the 6 most common ways restaurants fail at branding – and how to avoid them. I hope you find it insightful, and that this article will help you identify and steer clear of these potentially harmful missteps.

1. Forcing Your Story

At the root of any great brand is your story. This isn’t just a cliché word either; our story gets us through ups and downs. It gets us up every morning and gets us excited about what we do. It makes our brand authentic. However, a problem occurs when a leader tries to push their passions onto their team members, or other partners. People have their own passions, their own pursuits, their own desires – their own story. If you aren’t able to clearly tell your story and relay your vision, then challenges will inevitably come. This is one of the most common ways that restaurants fail – building a culture centered around a single vision.

Avoid this Mistake:

  • Having open and honest talks with everyone on your team
  • Discovering how to encourage and excite your team members
  • Identifying areas where your team’s vision isn’t aligned with yours, and also finding commonality
  • Leveraging the things you learn about your team to shape your brand and your vision so there’s a better chance at energizing and motivating your team

2. Following Restaurant Trends

Trends will come and go – this always been, and always will be, the case. Inevitably, there’s always one shiny new concept that attracts the most attention and stands out among the rest. Restauranteurs will flock to this concept, and before you know it there’s a vegan burger restaurant on every corner.

Don’t get me wrong, it’s not always a bad thing to launch a concept based on a trend. You’ll even find restauranteurs attempt to take a new spin on a trend – “vegan burgers with a new twist!” As irresistible as it may be, following trends isn’t always the best decision.

You don’t want to appear second-best.

The real problem lies in the fact that a trend is set by the leaders, and it’s hard for consumers to see any new attempt as anything other than an “imitator.” You don’t want to appear second-best. This is a very difficult position for a restaurant to dwell in because you’re forced to compete on price or availability alone. If you’re not careful you’ll be lucky to survive, let alone thrive.

Avoid this Mistake:

  • Do your research on the market before launching
  • Find a concept that will be unique and viable in your market
  • If you’re trying to start in an existing category pin-point the category leader
  • Figure out what you can offer to your customers that can special and differentiate you from the leader
  • When you discover your unique position, follow through and be consistent. Pretty soon you’ll be the leader in your own industry.

3. A Confusing Restaurant Concept

On the other end of the spectrum, sometimes restaurants try something so unique and out-of-the-box that it causes more confusion and harm than anything. Usually, this approach is thought to differentiate them against the competitors and establish their own completely unique category. The problem is that when your primary goal is simply “be different,” you risk alienating your customers.

People usually pick where they eat based on their own understanding of existing restaurant categories. When your concept doesn’t fit the mold of any common restaurant category, it’s easy to be overlooked by customers. Being unique can be beneficial, but if you can’t communicate it clearly to your audience, your “uniqueness” will fall on deaf ears.

Avoid this Mistake:

  • After you find a good opportunity in your market, think about how you’d want a new customer to explain the experience and the food to their friend.
  • Is it hard to understand? Could people easily explain it?
  • If your unique concept is too confusing for you to explain, it’ll be much more difficult for your customers to explain
  • Spend time to clarify your concept until it’s so simple a child could explain it

4. Naming Your Restaurant

Picking a name for your restaurant is often a huge creative endeavor of its own. Restauranteurs love to see their dream becoming real, but too often that can lead to making rushed decisions. This happens a lot in naming a restaurant.

There are two ways that this problem commonly occurs: first, the name is decided well before any sort of brand story or strategy is in place, which can cause great confusion if there is anything misaligned once the brand strategy is in place. Second, the name isn’t available which leads to picking a name that isn’t future-proof or will cause huge headaches with trademarking down the road.

Avoid this Mistake:

  • Develop your name with the help of a naming or branding agency which has this as a part of their brand development process
  • If you can’t do that, simply use a temporary “working name” until your strategy is defined and ready to go
  • In order to avoid any trademark issues, be sure to have an attorney review your name, and give it the “okay.”

5. Too Focused on a Logo Alone

Your brand isn’t your logo, it is your reputation. It’s how the public perceives you. It’s created by what you say, how you look, and what you do. Simply put, your words, look, and actions need to align, or you’ll be causing harm to your brand.

This is where many restauranteurs fail. Creating a brand for your restaurant is much, much more than creating a pretty logo. In order to create a wonderful experience that will turn your customers into raving fans, you need a brand strategy and identity that will make an impact. A comprehensive and cohesive brand identity system for your restaurant can tell the story much more effectively than if you only had a logo and a handful of colors.

A first impression is everything, and you won’t get a second chance.

A first impression is everything, and you won’t get a second chance. Putting a logo on your doors and saying your restaurant is “branded” won’t draw in more customers – especially those who have a keen sense for good design and aesthetic.

Avoid this Mistake:

  • Hire an experienced brand strategist or agency to design and develop a comprehensive visual identity for your brand
  • Be sure that you have a guideline book created to ensure visual consistency with all future touchpoints
  • Use this new system as a filter to ensure that you’re creating a memorable and consistent experience for your customers

6. Ignoring Your Target Audience

This is one of the most common mistakes that we see restaurants make. Restauranteurs will often spend so much time thinking about their restaurant as they are creating it, that they completely forget to be mindful of who their customer will be and how to attract them.

We’ve posted about this in another article (related to hotel branding), but it goes back to the mentality from the popular movie, “Field of Dreams.” In that movie, a baseball field is built on the simple idea that, “if you build it, they [ghosts of famous baseball players] will come.” It makes for a great movie, but a terrible business strategy.

Your customers aren’t ghosts. If you don’t know your customer, you’re not going to have a clear plan of how to get them excited about your restaurant. This makes it very difficult to create a brand experience that will resonate with anyone, let alone the target audience that exists only in your mind.

You may be building an entire restaurant concept based on a customer that doesn’t exist

Another problem that could arise is that without thinking about a target customer, you may be building an entire restaurant concept based on a customer that doesn’t exist. This will result in the swift death of a restaurant and is a common culprit in many restaurant failures we’ve seen. Your customers will only come if you are providing something they’ll care about, and your brand strategy is focused on them.

Avoid this Mistake:

  • Take time to sit down and understand your customer
  • Create customer personas that are a mixture of demographic information and experienced-based information
  • What do your customers care about? What negative things are they trying to avoid?
  • Ensure that as you are defining your restaurant concept, that these customer personas are at the front of your mind

7. Going it Alone (Bonus!)

The benefit of working with a brand agency, like Longitude, who specializes in restaurants, food, beverage, and hospitality will help you develop a restaurant concept like no other. We help guide you through the difficult journey and tumultuous terrain of building a powerful, influential, and profitable brand for your restaurant. Let the restaurant branding experts at Longitude help you avoid these fatal mistakes and turn the vision for your restaurant a reality.

Don’t attempt to go it alone. We’d love to help.

Avoid this Mistake:

7 Ways to (Almost) Guarantee That Your Restaurant Will Have the Best Chance at Success

In today’s competitive market businesses fail at alarming rates. This is especially apparent in the restaurant space. According to Forbes (2017), the failure rate of restaurants (which was once reported as being 80% higher than other types of businesses), is simply lower than reported. In fact, restaurants were found to fail at about the same rate of insurance agencies. While restaurant failure is higher than what most might expect, the chances of success are much greater than you might think. This article will provide 7 ways that you can guarantee restaurant success.

1. Create and Tell a Compelling Story

The most effective way to guarantee success in the restaurant industry is to create and tell a compelling story. There are five core elements of a compelling story.

  1. Connect with your intended audience. The best stories connect at an emotional level telling your audience why your restaurant exists. What is the story behind the restaurant and its leadership team? You can’t be afraid to really get into the why more specifically you’re why.
  2. Explain the challenge your customers face. Maybe it’s the need for healthier meal options for dual working parent family. Uncover the challenge and how your restaurant solves it.
  3. Every great story has some kind of conflict. What are the conflicts your buyers face? Is it time, money, or fear of not getting a great meal for their kids from a fast food place? Whatever the challenge and conflict make sure your compelling story is relatable.
  4. Communicate clearly how your restaurant can conquer the customer’s fear. For example, if the fear is money, a “kids eat free” message could resonate. However, you must clearly understand the fear before you can conquer it. Some of the suggestions below can help with that.
  5. Conclude with a clear call to action. For example, “Join us on Monday’s for family night from 6pm to 8pm where kids eat free and drinks are half off.

2. Understand Your Restaurant’s Unique Position

Another sure way to guarantee the success of your restaurant is through understanding how it is unique in the eyes of the market and most importantly in the eyes of your ideal customer. Is part of your story unique (i.e. founded to train individuals who struggled with the law in the past or designed to employ individuals with disabilities)? What other restaurant choices are in your market? How are you different? Being different is just as important and many times more important than being better. An example of a unique position of a restaurant that might come to mind could be the blackout dining experience. Yes, everything is pitch dark. What this experience does according to food experts is heighten the other senses to deliver a unique food experience. What is your unique position and how does it resonate with your customer profiles?

Being different is just as important and many times more important than being better.

3. Develop Customer Profiles

Knowing your customer (KYC) is a process that is not new to marketing nor the restaurant space. Clearly understanding who your customers are, what they need, want, and like is critical to set your restaurant up for success. Take the time to develop customer profiles but go way beyond demographic information. Try to talk to them. Listen and document how they talk about your restaurant in their words. Repeat what you heard back to the customer and validate the message resonates. Try to get into the details of what they do professionally, what their hobbies and interests are, etc. The more you know the stronger your customer profiles will be. This information results in a better alignment of your restaurant and what the customers are seeking when it comes to their buying decision for a meal.

4. Craft a Clear Message

After you have found out what makes your restaurant’s brand unique and developed strong customer profiles the logical next step is to tell your brand story with a clear message. The most effective way to craft a clear message is to use the language your customers use. Brands that do this have a much better chance of success. Some examples might come to mind:

  • “Eating fresh in the neighborhood”
  • “There is no place like the neighborhood”
  • “License to grill”
  • “Eat fresh”
  • “I’m lovin’ it”

It’s important that your message is clear and concise and that it goes much further than just a slogan. The message becomes central to your customer and their experience with your brand.

5. Deliver Quality Food and Service

Great food and a remarkable experience are where great and growing restaurants stand out. Some of the slogan messages above are strong messages but the experience with both the food and service is less than desired. You must deliver a food and guest experience that is memorable. For example, imagine a hostess that greats the guest by the last name as the result of the reservation and who knows they just came from downtown after rush traffic. A hostess who can have a real conversation with the guest can go a long way to setting the stage. Then continue to deliver that experience with every staff interaction. Deliver food that is prepared right and with the highest possible quality ingredients. Make sure the guest knows the effort that goes into getting it right. It’s a strong message delivering a wedge salad to the table while letting the guest know that the iceberg lettuce was grown on an organic farm 3 miles away. When it comes to delivery, it is all about the genuine wow factor you can provide.

Make sure the guest knows the effort that goes into getting it right.

6. Reward Loyalty

Guests who dine with you often should be rewarded. Get to know them and welcome them as friends to your establishment. Rewards do not always need to be monetary. Rewarding a guest with a personalized welcome card at the table could be enough. Change rewards up and keep them fresh. Discounts and spur of the moment giveaways can be unique. Everyone else gives points, while not a bad idea, it’s also not a unique idea. Get outside of the norm and be unique yet again with rewarding loyalty. Partner with the neighborhood movie theater and give away tickets to guests who just showed up at your restaurant for the 5th time.

7. Invest in the Brand Experience

By now you’ve probably got the understanding that investing in your restaurants brand experience is the cornerstone of guaranteed success. If you are not able or willing to invest in the guest experience with your restaurant brand, you probably should take a step back and re-evaluate your strategy. Make sure your brand experience is connected with your digital and physical brand identity. The look, feel smell, taste, and smell all come together in a unique way when it comes to branding a restaurant. Invest in all senses for the best impact.

In summary, these 7 ways can help your restaurant succeed at a much higher rate than the industry average. Pulling in outside resources to help profile your customers, craft your brand message, and develop the customer experience is an effective method to get it right. You can focus expertise on delivering the food and guest experience, while an expert third party helps communicate your unique position.

An Independent Hotel Brand Built to Last Through Any Economy

Challenges Independent Hotels Face

It should certainly come as no surprise that independently owned hotels face many hurdles that chain hotels (commonly referred to as branded hotels) do not have to worry about. For this reason, it’s important to understand the pitfalls and risks associated with independently owned hotels, and how to combat them with a strategic vision and game plan.

These challenges are intensified during times of economic recession. Independent hotels don’t have the luxury of relying on a large brand name to help them cut costs during a changing economy. In fact, in a study conducted by John W. O’Neill and Mats Carlbäck and the International Journal of Hospitality Management, it was shown that big chain hotels experience higher occupancy rates during recessions. According to the study, it appears that chain hotels are able to sacrifice higher room rates during tough times to achieve these higher occupancy rates. Basically lowering rates, and putting independent hotels in a race to the bottom of their prices.

In short, independent hotels can’t compete against these dirt-cheap rates that big chains are marketing.

Independent hotels can’t compete against these dirt-cheap rates that big chains are marketing

Stop Competing on Price Alone

This is why it’s so important to adjust your brand strategy so that you don’t always have to compete by price alone. There are many other methods and approaches you can take in order to stay competitive, especially during economic changes. Your unique market position, guest experience, the compelling story of your hotel, and your deep and personal connection to guests are just a few ways you can shine against big chains.

Your brand is extremely important. Hotels live or die on their reputation. This study concludes that hotel brands, in general, are important, and especially matter during times of economic recession.

The study goes on to say that this information should be added to the complex discussion of the true value of these intangible assets. This seems to suggest that many hoteliers, hotel investors, and private equity firms may not realize the true value of a brand. However, just like any business – a hotel can benefit from the basic principles found in a brand strategy.

With a brand strategy, your hotel should know the answers to these:

  1. What are your core values as an organization?
  2. What is your brand’s personality?
  3. Who are your customers, and what really matters to them when booking their stay?
  4. What is your unique selling proposition and market position?
  5. How and where should you be connecting with your audience through messaging?
  6. What actions should you be taking on a daily, weekly and monthly basis to maintain consistency?

Independent Hotels Need a Brand Strategy, Period.

Bottom line, if you want to experience the benefits of owning an independent hotel and freedom from franchise fees and payments you need to invest in your brand. If not, you will be taking some big risks that could sink your hotel. Are those risks worth it? I don’t think so. Especially not when companies like Longitude° exist to equip you with all you need to build a solid brand strategy.

you will be taking some big risks that could sink your hotel

This is also why you need resources, support, and a community behind you (Join our Hotelier Facebook Group if you haven’t already!). We are actively providing these resources with free access to articles aimed at helping you attract more guests, beat big-chain hotels, keeping your guests loyal, and general tips to keep your hotel from failing.

It’s can seem like an impossible task, but with the right strategy for building your brand, cultivating your identity, maintaining healthy operations, building your management team, and enhancing your revenue management system – you can certainly be competitive in this ruthless hospitality industry.

See Our Latest Hotel Branding Work

View our latest hotel branding case study here: The Allen Hotel – Manhattan, NY

The Allen Hotel – Lower East Side Manhattan, NY

 


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3 Ways Independently Owned Hotels Can Beat Big-Chain Hotels

The Challenges Facing Independently Owned Hotels

Running an independently owned hotel is not easy, especially when big-chain hotels can provide the basic shelter needs of travelers at scale for a lower cost. However, there are certain trends you can watch regarding consumer behavior when it comes to their travel habits. In addition, the ideology of boutique, and feeling of exclusivity is on the rise.

luxury consumers seek out the perception of value just as much as the value of the product or service they purchase

According to Forbes, luxury consumers seek out the perception of value just as much as the value of the product or service they purchase. When it comes to beating big-chain hotels, this is where an independently-owned hotel must separate itself with a strong brand identity – winning loyal guests.

There are three strategies you can use to stand up to the pressure of the big-chain hotels. You will notice that all of these strategies are intentionally built around people and focusing on creating a great brand (reputation).

Build a Brand That People Believe In

The first step in beating the big-chain hotels is to build a brand that means something to your customer. Create a story, message, and identity that will resonate with your guests so it becomes something they want to stand behind.

Your brand strategy, identity, and the guest experience you provide should be so well connected in the mind of your guests that they want to belong in your guest book. Does this sound like your hotel brand or not?

If you build a brand people actually believe in, with values which are authentic, it will spread like wildfire. Think of the last time you had a guest call for a reservation saying that “so and so” was raving about your hotel and that he heard it was the most luxurious weekend getaway for him and his wife’s twentieth wedding anniversary. This is the outcome of a powerful brand and meaningful guest experience – one that someone believes in.

Focusing on building these quality relationships with guests is a great way to differentiate yourself, and position your brand in the market. While big-chain hotels are often impersonal, only caring about hitting numbers – you can communicate a personal message, and connect to guests on a deeper level.

As an independent hotel, you have the unique opportunity to craft a custom and unique guest experience tailored to their needs, and people will definitely connect with that. More and more people are looking out for ways to relieve stress. Make sure your brand delivers the ideology of less stress well-being. The big-chains are just average at delivering this experience.

Design Your Guest Experience Differently

Jay Acunzo’s book Break the Wheel (2018), explains that we must think differently to challenge the status-quo. While he acknowledges the need for us to absorb what has been learned from an industry, the process of thinking for yourself is unique.

When you create the guest experience, think about things you can do which are unexpected. Create experiences which are different from the big-chain hotels and share your guest’s endorsement and enthusiasm when you blow their mind. Zappos gets this concept. If you dial the Zappos customer service line, there is an option in their recording to press a number for the joke of the day. Unexpected delight.

Be thoughtful in your approach; be intentional in what you do, as well as what you don’t do.

However, there are challenges you will face such as:

  • Market presence. WIthout the support of a large hotel chain flag, it’s easy to get ignored without a plan.
  • Employee limitations. You’re often stretched thin, and wearing too many hats.
  • Balancing of luxury and budget. This is a delicate balance and must be considered when building your reputation.
  • Personalized service. Finding trusted, quality labor is difficult for independent hotels.

Don’t let these obstacles get in the way of beating your competition. You have to think differently, be flexible, and innovative. This is something that big-chains are often unable or unwilling to do.

What are different ways your market presence can grow? Does your local community know what you provide? Think of giving away some nights so they can experience your brand and recommend your hotel to people they know who might be coming to town for leisure. Be strategic with who you choose. You might even choose a social organization similar to your target guests and provide meeting spaces (if you have them) or other services. Think differently about how you can expand your market awareness.

Maybe your challenge is one employee wearing multiple hats. One employee may be trying to host a reception and making beds at the same time. You might need to consider if that is a good approach. You might consider hiring students who can do the work for a fair wage and provide perks to those students who best represent your brand the best.

The bottom line here is that you need to be thinking critically about how you can do something no one else in the hotel industry (at least in your town) is doing and do it well.

Put Your Brand at The Center to All You Do

Again, a healthy brand should be at the center of all you do and will help you beat the big-chain hotels. When looking at a chain hotel brand, guests get a consistent experience at a consistent price, with pretty average services. This is their brand and the center of what they do. If you try to mimic this as an independently owned hotel, you will likely fail. You can’t try to be a brand you are not. The brand of your hotel must be unique, deeply connected to everything you do, and be consistent across every guest touchpoint.

Having confidence in your brand’s identity, positioning, and messaging is important. As you build your brand you may get caught up in thinking about the prize of a well-known, super busy, boutique hotel. While being sold out a year or two in advance might be the end goal, it is critical that you, as an owner, manager or hotelier, focus on consistency along the way. Your core job as the leader is to drive the brand home in your organization and put it at the center of everything, every time, for everyone throughout the organization.

Final Word

These are just 3 ways to help you build a powerful independent hotel brand which can compete and beat big-chain hotels. Having a clear brand strategy is an extremely important foundation. You need to have a plan, because hope is not a good business strategy and will lead only to frustration, loss of money, and eventually your hotel will suffer greatly. While you don’t have all the big corporate support, you also aren’t restricted to think like big-chain hotels. Get out there and build a brand people can believe in, create something unique, and put your brand strategy at the center of everything you do.

 


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