How Forming A Community Can Help your Restaurant

According to Wikipedia the definition of the term community is still being debated by sociologists. For our purposes, a community is a group of people that are related by a common bond and usually in the same area. From a restaurant marketing perspective the common bond is your restaurant and its proximity to the group. The group is your guests and prospective guests.

There is a lot of buzz in the restaurant business about viral marketing, online marketing, social marketing and all of the great things that can be achieved online. Yes, a lot of the marketing trends are very adaptable to the Internet and the constant resources being developed there. The Internet IS a valuable tool, but should not be the only element of getting new customers and maintaining business at your restaurant. If you rely only on the Internet, you will miss 30% to 40% of your customers and prospective customers. Those are the ones who don’t have computers and the ones who don’t fully embrace the technology.

Your restaurant marketing plan needs to develop what I call your “branded community“. That is a group that is defined by the use and potential use of your restaurant. They reside in an area that a reasonable person would define as your potential marketing area. It could be a 2 mile radius, 3 mile radius or much smaller or greater – but clearly within a distance a guest would be willing to travel on a fairly regular basis to visit. Who are the members of your community? The answer depends on the type of restaurant, demographics and structure of the area you have defined as your marketable community area.

Your restaurant community may include:
residents
businesses
groups and associations
athletic teams
government offices
schools
hotels

The list could go on, but generally can easily be defined by just a quick drive within your community area.

Once you have defined the members of your restaurant’s community, you have to define how you will communicate with them. Commonly, the most recognized method of communication is advertising. However, normal advertising like newspapers, direct mail and even yellow page ads are expensive and not very productive. Can print media advertising be useful? Perhaps, but there are many more productive and less costly ways to get your messages to your community.

With today’s available connectivity through the Internet along with old proven direct one on one marketing, you have numerous options. A few ways to get your restaurant’s message out to the community include:
email
website and/or blog
social websites like youtube, facebook, myspace and others
direct mail
personal visits
flyers
membership in groups and associations
involvement in community events
becoming a source for community information and communication

Your type of restaurant may not be able to utilize all of the above methods, but should use as many as possible to reach your full potential. By looking at a common restaurant business model, we can explore the use of each communication method. The business model we will use is the family restaurant with a hundred or more seats in a suburban market of a major city. This model would encompass all of your community members listed above. Here are some marketing ideas for communicating your message using each of the methods above:
Email – Perhaps the most cost effective and best tool available today is the use of email to keep in touch with your customers. As long as you keep the communication valuable to the recipient, it will drive more business to your restaurant than any other single tool.
Website or Blog – By now the restaurant industry has embraced the assets of having a website. An extension of the website is a blog for your community. The blog is a way to be a central source for events in your area, publicizing your restaurant specials and events, featuring members of your restaurant community and entice new business from people who find it on the Internet or through your advertising the web address in other media. For an example of an effective community blog visit The Sand Key Blog. This blog gets only 50 to 75 unique visitors per day. That is 1500 people a month checking your community blog. What other resource do you have that communicates with that many guests and prospective guests? The goal here is not a lot of “hits”. It is quality visitors keeping up with your “restaurant community”.
Social Websites – Within the last few years the prominence of socializing through huge online chat and video communities has become fairly popular. Populated by a big 18 to 34 year old crowd, these sites can be helpful to reach prospective guests through posting your restaurant information in these digital jungles of worldwide content. While not the highest priority as far as marketing options, you can create your presence and perhaps create some buzz.
Direct Mail – If you can generate, buy or create a mailing list that encompasses a big portion of your restaurant community, use it occasionally to promote special events, offer values or to distribute a newsletter. Direct mail is still effective, but costly. It is another tool that encompasses a portion of your community area that may not be reached any other way. If you choose to use coupons, this is a way to measure effectiveness and new business.
Personal Visits – In all of the fuss about the Internet, media advertising and viral marketing, sometimes we forget the old way restaurants grew before technology became part of our daily lives. There is still no more potent marketing tool than direct personal contact. One restaurateur I know uses daily visits to businesses in his area with food samples. He has a preset package of food samples that keep well. He delivers these to several businesses daily along with menu’s. It is extremely effective, but time consuming and moderately expensive. The results are immediate and long lasting.
Flyers – This low cost method of developing business in your community is effective. A simple half page flyer left on the counter of local businesses such as hardware stores, beauty salons, car washes, barbershops and similar places where residents visit can be a reminder that brings customers in the door more frequently. New comers in the area visit these shops and may get the implication that your restaurant is the community favorite.
Membership in Groups and Associations – Your restaurant is an extension of your personality and the people you associate with. Organizations publish membership lists which become prospective guests. Many groups have meetings at lunch and your restaurant becomes a natural location. Don’t forget these inevitable committees that organizations create to accomplish their goals. Offering your restaurant as a meeting place can boost sales.
Community Events – Events that occur in your area of influence become opportunities for participation to solidify your restaurant’s position as a contributor to the quality of life in the area. A neighborhood wide garage sale is a perfect place to cruise the area with coffee and snacks provided by your restaurant. That church fund raising dinner may include one course from your kitchen. How about Girl Scout cookies from the local troop as a palate refresher as guests leave. Build your involvement to build loyalty and customer counts.
Source for Information and Communication – An earlier paragraph explained how to create a blog for the community. You can also have a designated area in your restaurant for notices, flyers, business cards and announcements that bring your restaurant community together in the restaurant.

Forming your community may take a little planning and thinking, but the results are rewarding. Chain restaurants cannot compete with this conceptual marketing plan. They tend to rely on mass media to communicate with the masses. You can make inroads into customer loyalty and the feeling of belonging the chains could never match. The rewards will be more frequent visits to your establishment and less volatility in times of economic downturn. Once you get the customer in the door, pamper them like they were a guest in your home. The guest will talk about you and your operation to everyone they meet. This is true viral marketing.

Tax Tips for Independent Restaurateurs

Few restaurant owners find it easy to navigate Internal Revenue Service rules as they apply to their business. Yet an understanding of changes in the tax code may save them money and avoid audits. We asked Lisa Haffer, a lawyer and certified public accountant who works as a tax partner in the Cincinnati office of SS&G Financial Services, for an overview of several new IRS provisions that operators may not be aware of.

“What do owners need to keep abreast of?
Among the areas often missed by restaurants and their CPAs are: tax treatment of smallwares and expansion costs, potential exclusion of tenant-improvement allowances from income, gift-card deferral rules, and five-year depreciable life for most restaurant equipment.

What are the issues regarding gift-card deferrals?
Gift cards are a very hot area with the IRS, and one area tax examiners are likely to focus on when auditing a restaurant company. Restaurant operators may not be aware there are two tax-deferral opportunities for gift-card revenue: a one-year and a two-year deferral of unredeemed gift-card revenue.

But there's a catch, right?
Operators may not be aware of the requirements that must be adhered to for the more generous two-year deferral. For example, the same taxpayer that sells a gift card must be the one who redeems it. So gift-card sales by a franchisee that can be redeemed across the nation at another franchise location may not qualify for the two-year deferral. Using the two-year deferral also requires you to attach a statement to the tax return each year, setting forth the activity in the gift-card liability account.

FICA tax credits are generating interest because of new benefits to operators. Can you explain the advantages?
For years FICA credits could not be used to offset alternative minimum tax. As a result, taxpayers either ended up with a surplus of unused credits that they carried over from year to year, or they simply elected not to claim the credit at all.

What changed?
Effective for credits generated in 2007, FICA credits and the Work Opportunity Tax Credit can be used to offset alternative minimum tax. So credits generated in 2007 and future years are going to be very valuable to restaurants and their owners.

Can you explain the new “bonus” depreciation rules?
Most assets of any business that were placed in service in 2008 qualify for the 50 percent so-called “bonus” depreciation. For restaurants this actually translates into a 60 percent depreciation deduction. If that seems confusing to operators, I advise leaving the math up to their accountants. But restaurant owners should understand that this 60 percent figure is in contrast to 20 percent under the former law.

Are there other IRS issues operators need to be aware of?
They should ask a tax professional about the recent IRS extension of the favorable 15-year depreciable-life provision for leasehold improvements and other restaurant property, which includes buildings. It's a complicated issue.

(to read the original article by David Farkas, go to www.chainleader.com/article/CA6617994.html?industryid=47554)

The National Restaurant Association's Industry Forecast for 2009

The National Restaurant Association’s forecast for 2009 projects that while overall restaurant industry sales will increase in current dollars by 2.5 percent over 2008 figures, the numbers translate to an inflation-adjusted decline of 1.0 percent. But this doesn’t have to be your destiny. You don’t have to continue rolling up your sleeves and going to work each day, doing the same things over and over, somehow magically believing and hoping, maybe this year will be different. (Go to http://www.restaurant.org/ to read the original press release)

To get different results you have to do something different. The Travel and Dining Association (TaDa) is here to provide you with a coordinated group of programs to help you market your restaurant and increase your profits. There are only 3 proven ways to increase your profits: attract new customers, increase visits from existing customers, and upselling your existing customers. TaDa has programs to help you excel in each of these areas. Or are you willing to settle for the standard pre-tax profit level in the restaurant industry of 3.8%? Which would equate to just $25,589 in profits on restaurant sales of $673,404.

If you join TaDa, you won’t have to be complacent about low profits any longer. Did you know that the single most cost effective way to increase sales is to personally invite your existing customers back more often? And that other owners who have done so, in combination with using a customer database, direct response marketing and an effective referral program, have increased sales as much as 64% over three years while industry sales were increasing just 3-5% per year. And of course an 18% net profit on a larger sales volume is so much better than a 3.8% of the old smaller sales volume, providing owners over $270,000 in pre-tax profits instead of $25,000. These are the kind of results that change your life and retirement plans.

TaDa will help you implement and automate the processes mentioned above, and has numerous other programs to help you increase your profits. For example, TaDa’s Travel Thru Dining sweepstakes lets you offer your customers the chance to win a trip to anywhere in the world valued at $25,000. TaDa also has a Restaurant Ambassador program which motivates high school students to graduate by rewarding them with a free trip and computer while allowing you to harness the power of community goodwill and make it work for you. Our members also receive professionally written press releases which they can distribute to their local media outlets to garner free advertising for their restaurant.

Help for Independent Restaurant Owners

Welcome to the TaDa Blog! TaDa was created to provide independent restaurant owners with the tools they need to not only to be able to compete against large chains and franchise establishments but also to succeed. If you're an independent restaurant owner or work at an independent restaurant, we hope the information in this blog can help keep you updated about what's going on in the restaurant industry. We're here to give you the best advice and tips on how to market your restaurant, boost your sales, increase your customer base, and most importantly increase your profits. Please share your comments and opinions with us and we'll make sure they get posted.