A detail Explanation of P & L
I. Sales
Sales is the only positive figure in P & L. So, normally, the more sales you have, the more profit you will make.
A restaurant could be divided into three parts:
Kitchen is like a factory. It makes food out of raw materials such as chicken, beef, shrimp and vegetables. The food cost normally is 30%.
Bar is like a retail store. It buys drinks from vendors and re-sales it. The profit normally is 300%. Encourage associates to sale drinks as much as possible. The Bartender’s skill is very important.
The dinning room provides service. The carry out (pick up, delivery, and catering) provides convenience. All the waiters, phone girls and delivery guys are salesmen. Encourage them to sale as much as possible. The more they sale, they more tips they will get (normally people tip at certain percentage of sales). And the restaurant makes more money. It’s a Win-Win situation.
So, sales include food and drink. Drink includes beverages, liquor, beer, and wine.
To increase sales, focus on four wall marketing. Keep LSM (Local Store Marketing ) in mind.
Marketing Your Store
. Inside Your Four Walls
What can you do to market your store within the boundaries of your location?
o Create Moments of Magic
o Focus on Customer Satisfaction
o Maintain all POP and Signage
o Suggestive Selling & Sampling
. Outside Your Four Walls
What can you do to market your store outside the boundaries of your location?
o School Sponsorships
o Cross Promotion with a Non-Competitive Local Retailer
o VIP Card Program
Local Store Marketing
The most important element in the success of local store marketing is you.
-Why should I do local store marketing?
. To build relationships and increase sales.
-What is the difference between advertising and promotion?
. Traditional advertising is a long term, image-building program.
. Promotions are short-term activities to increase sales.
-What can a promotion do for me?
. Generate new interest in your products
. Bring in new customers
. Get customers to return more often
-How can discount pricing become a problem?
. Regular customers may trade down.
. New customers may only purchase with a coupon.
. Perceived value of our food is lowered due to discounts.
Know Your Trade Area
. Your trade area is the area around your store where most of your business comes from.
. To increase your sales you must know:
-Who are my customers?
. Families
. Kids
. Students/Faculty
. Tour Bus Operators
. Other Employees
. New Residents
-What Are Your Customer’s Needs?
. Understand your potential and existing customers.
o Business or Residential
o Types of people---homeowners, apartment-dwellers, business people, senior citizens, students, etc.
o Know where your customers are coming from
. Use available resources to learn about customers
o Review your records and files (complaints, receipts, business cards)
o Talk with customers while they are in your store to familiarize yourself with them
. Learn From Your Employees
o Ask your employees about your customers likes and dislikes
. Focus on Areas of Opportunity
o Examine the strengths and weaknesses of your business
o Talk to people/organizations in your area to familiarize them with your store
o Identify where sales are coming from and spot potential areas of opportunity
o Evaluate current and past promotions and how they are working for you
. Build an ongoing relationship with your customers!
Types of LSM Promotions: Cross Promotion and Targeted Promotion
. Cross Promotion
. Choose a non-competitive business that will give you additional exposure to current and prospective customers and share the cots of promotion.
What type of businesses are good cross-promotional partners?
Those with: . High traffic count
. Similar types of customers
. A good reputation in the community
Example:
o A great opportunity appears to co-promote your business with a ice cream store in your neighborhood, you…
. Contact the store manager to discuss ideas and opportunities
. Seek ideas that will drive business into our store
o Determine start date
o Meet with your staff to build excitement and prepare for the promotion
o Invite your business partners over for lunch or send over a party tray to introduce them to our food and make them supports of the promotion
. Targeted Promotions
Targeted promotions are directed toward your most likely buyers, your target audience.
o Determine who lives within your trade area.
o Determine who are your most likely buyers in your trade area---this is your primary target audience.
o Develop promotions that will attract this primary target audience.
o Remember, your promotion must reach a large enough number of potential customers to off-set your expenses.
o When developing a targeted cross promotion, make sure your chosen partner has a family oriented audience and an excellent reputation. Their company will be linked with your store in the public’s mind.
Targeting Specific Customers
. Community Organizations: Get Involved
o Contact high schools, little leagues, hospitals, senior citizen center, your Chamber of Commerce, etc.
o Participate in community events such as fairs, food festivals and parades
o This is a low cost means of creating awareness, reaching potential customers and generating goodwill within your community.
. Sponsorships
o Possible Opportunities:
. Sports teams, school clubs, service clubs, community organizations.
o Consider the group’s reputation, reach and the number of members
o Ask about marketing opportunities---advertise in publications, host a team dinner etc.
. Catering opportunities
o Remind community members that you can meet their catering needs
o Attend community events and hand out catering menus and coupons
. Offices, Hotels & Retail
o Promote lunch hours and early dinner and the convenience of your store.
o Advertise in the hotel guidebook, create relationships with representatives at office building and hotels.
. Other Business Opportunities
o Business card drawings
o Food sampling
o Catering opportunities
Key Things to Keep in Mind
. Know your trade area---this will help you to better understand your guest
. Get involved with your community
. Understand your business partners---they will help you grow and find new opportunities
. Know what your customers want---listen to what they are asking for or saying
. Give yourself time to plan an effective program
. Work with your team to create effective and fun programs for your guest---your employees have great ideas too
. Look for promotions that will be successful for you & your store---you are the most knowledgeable about your store & customers.
. Reward your loyal customers---keep your guests coming back
. Focus on your goal (traffic, average check, higher visit frequency)
. Know your sales trend, competition, trade area, customers and possible opportunities before contacting your marketing representative to develop a program.
