How I'd Raise Restaurant Profit Without New Customers — Transcript

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1. 0:00We need to get more profit in the
2. 0:01business. Correct. And right now it's in
3. 0:04a tourist town. So what percentage of
4. 0:06the business is like not locals?
5. 0:10>> 65%.
6. 0:12>> Okay. So there's a handful of small
7. 0:15things that we need to do from a menu
8. 0:16perspective and pricing that can just
9. 0:19increase
10. 0:21just increase margins that no one really
11. 0:22feels or objects to. So, um, this is I'm
12. 0:26just I'm going to just rattle some off
13. 0:27and then you can just say like we do
14. 0:29that or we don't do that or that's a
15. 0:30great idea. Um, the more great ideas
16. 0:32that sounds better for me. But, uh, so I
17. 0:35guess sound really small, but it's like
18. 0:37if you're at, you know, uh, $16 or
19. 0:40whatever on the menu, add the 99 cents
20. 0:42onto every single every single
21. 0:43transaction. Number one. Um, number two,
22. 0:47uh, at the bottom of your menu, you can
23. 0:50add a plus 3% card fee. Um, which then
24. 0:53adds 3% across the board across all
25. 0:55transactions. Um, number three is we
26. 1:00want to organize the menu. So, you'll
27. 1:02probably have to reprint menus, which is
28. 1:03probably not that big of a deal. Um, you
29. 1:05want to organize them in order from
30. 1:07highest gross profit to lowest gross
31. 1:08profit on each of the subsections of the
32. 1:11menu
33. 1:12>> rather than price. any absolute, excuse
34. 1:15me, absolute margin. So, you know what
35. 1:17I'm saying? Like if you make $10 on
36. 1:18something, make that be the highest.
37. 1:19Okay. Um, the ones that have the
38. 1:23absolute best gross margin, say top
39. 1:25three meals. Um, put a box around them
40. 1:29as like out of town or can't miss,
41. 1:31something like that. So, because
42. 1:32everyone's big question is like, okay,
43. 1:34what's the if I'm only here for a
44. 1:35weekend, this is the only time I eat,
45. 1:36like what should I have? It's like,
46. 1:38well, let's just tell them what that is.
47. 1:40Now, each item on the menu, because
48. 1:42liquor is where you're going to get, you
49. 1:43know, the majority of your of your
50. 1:45profits or has the highest gross
51. 1:46margins, um, we want to have kind of a
52. 1:49threepronged alcohol strategy. All
53. 1:51right. So, number one is we want to pair
54. 1:55each of the meals with a drink of some
55. 1:58kind. Either a wine or a spirit that
56. 2:00would go well with it. Just the fact
57. 2:02that it'll be right there with the meal
58. 2:03will increase the likelihood that people
59. 2:04take it. That's number one. The second
60. 2:07thing is we want to have a weekly
61. 2:10basically get the the not the somalier
62. 2:14the bartender whatever the
63. 2:15cocktailologist there was a mixologist
64. 2:17there it is that's the term I'm looking
65. 2:18for get the mixologist every week to
66. 2:21come up with some very interesting drink
67. 2:23of the week and have the team taste it
68. 2:25because if the team tasted everyone like
69. 2:27when because everyone's like oh what's
70. 2:28good it's like they can just say oh we
71. 2:30our you know our mixologist makes this
72. 2:32really cool thing every week uh he
73. 2:33experiments with a bunch of cocktails
74. 2:35and he picks the best on and that's
75. 2:36that's kind of our drink of the week.
76. 2:38And so that's kind of like the drink
77. 2:39special. That should be a solo um kind
78. 2:41of a-frame that sits on the table to let
79. 2:43them know about it. Okay. So on the menu
80. 2:45side,
81. 2:48we do one
82. 2:55to add
83. 2:573%.
84. 3:00You just add it in fine print at the
85. 3:02bottom of the menu and it gets tacked
86. 3:03on. No one No one gives a But for
87. 3:05you an extra four or five%
88. 3:08>> yeah makes material um
89. 3:14uh highest
90. 3:16GP to lowest GP in terms of order
91. 3:24on the menu. Um, see where all the
92. 3:27things 41
93. 3:32can't miss.
94. 3:39Oh, high GP, not low GP. All right.
95. 3:43Five. Okay. Then we add drink pairings.
96. 3:48I'm just trying to get just my menu ones
97. 3:50out.
98. 4:03Okay. And then I will I'll include
99. 4:08No, I'll leave leave that there. Okay.
100. 4:10That's just menu stuff
101. 4:15because I I'm going to give you there's
102. 4:17obviously the big obvious, which is if
103. 4:19the food's awesome, the
104. 4:21restaurant typically does well. That's
105. 4:23the big obvious one. These are all the
106. 4:25businessoriented ones that have nothing
107. 4:26to do with the thing that matters most,
108. 4:28which is the food [laughter] to be clear
109. 4:29because I can't tell you how to, you
110. 4:30know, cook an omelette better. Um, just
111. 4:32like to get that disclaimer out of the
112. 4:33way. If the food sucks, nothing will
113. 4:35work. Okay, making sure we're on the
114. 4:37same page. Um, so the next thing is kind
115. 4:40of like I said with the um, so this is
116. 4:43increasing how much we make uh, per
117. 4:46transaction.
118. 4:48So I'll go where do I want to organize
119. 4:50this? So we'll go table SLserver. Okay.
120. 4:58So one is we want to add the A-frame
121. 5:02with the drink pairings. Sorry. Uh with
122. 5:04the drink of the week. Drink
123. 5:07of week.
124. 5:10Again, have the team actually taste it
125. 5:11so they can say with conviction that it
126. 5:13was actually really good and people
127. 5:14liked it. Whatever. Um,
128. 5:21okay. So,
129. 5:24one is I agree with the perspective of
130. 5:25like we should identify who's a first
131. 5:27first time, second time. I'm sure you're
132. 5:29familiar with the napkin thing. Do you
133. 5:30guys do it?
134. 5:31>> No.
135. 5:31>> Okay. Any reason why not
136. 5:35>> training stuff? Getting the team to do
137. 5:36it?
138. 5:36>> Yeah.
139. 5:36>> Okay. I'm going to talk about that
140. 5:38because it's going to be a core a core
141. 5:39element of this one. So I'll say first,
142. 5:43second, third,
143. 5:46um
144. 5:48customer journey
145. 5:52which is entree
146. 5:55to come back to here, dessert to come
147. 5:58back to here.
148. 6:07Okay. And so the training is basically
149. 6:10covering these four things. These are
150. 6:12the four conversations that have to get
151. 6:13scripted that you have to drill with the
152. 6:14team every day. So the first one is
153. 6:17basically the first time
154. 6:21it's the first interaction we're having
155. 6:22with them. I I don't know if you like I
156. 6:24don't know if you've been to a
157. 6:24restaurant before. Um many times like
158. 6:29it's Chick-fil-A every single time you
159. 6:32get up to the counter the interaction is
160. 6:34the same. Great establishments work that
161. 6:36way. Most establishments don't, which is
162. 6:38why most establishments aren't great,
163. 6:39right? So, this has to be scripted. The
164. 6:42second is the drink special,
165. 6:47which
166. 6:50right as we start, it's like, hey, if
167. 6:52you noticed that the drink special of
168. 6:54the week, I had it. People love it. Do
169. 6:55you guys want to try that out or do you
170. 6:57have any other drinks in mind that you
171. 6:58want to get started? Just like because
172. 7:00you all we want is the looks good and
173. 7:02then the whole table gets one or two,
174. 7:04right? And then like we've now cracked
175. 7:05the the the seal of okay we're this is a
176. 7:08drinking table right
177. 7:10[sighs]
178. 7:10the next is that with every single the
179. 7:13reason that the drink pairings are so
180. 7:14important for the menu is that whenever
181. 7:17anyone orders anything on the menu it
182. 7:19gives the natural like oh that goes well
183. 7:22with this a lot of people like to drink
184. 7:23it with this or eat it with this you
185. 7:25guys want to get one of those it just
186. 7:27makes it natural now if they already
187. 7:28have drinks then leave it alone but if
188. 7:30they don't then it allows us to do that
189. 7:31on on each [clears throat] of the things
190. 7:33unless they say I Don't drink. Right.
191. 7:43And then the last piece here is the
192. 7:46review return. Right.
193. 7:50So,
194. 7:51just like the deck builder thing that I
195. 7:54was saying earlier, uh, hey, the boys,
196. 7:56you know, they they put a lot of work
197. 7:57into this. If you could leave a fivestar
198. 7:58review, it would mean a lot. when the
199. 8:00manager does the walk around the table.
200. 8:01I would try and get them to walk when
201. 8:03the the bill is being like handled or
202. 8:06basically post bill being delivered. So
203. 8:08they could say, "Hey, you know, how is
204. 8:10everything?" As soon as people say, "Oh,
205. 8:12it was great." I would say, "Hey, um I
206. 8:14doubt you know Joe said this, but um if
207. 8:16you felt so inclined to leave a review
208. 8:18and at that point he can pull out a QR
209. 8:20code that leaves straight to Yelp and
210. 8:21leave it on the table." Um you know,
211. 8:23Josie gets a spiff. Um and it would mean
212. 8:26a ton to her. Uh ownership does it. So,
213. 8:28and a lot like because for you the front
214. 8:30like the reviews are everything for Open
215. 8:32Table and all that kind of And so
216. 8:34if this happens every day, it's like you
217. 8:36you'll start like within six months the
218. 8:38thing has thousands and thousands of
219. 8:40reviews and it'll increase your average
220. 8:42score. There's three chunky ones that I
221. 8:44want to go through. So one is kind of
222. 8:45like grand opening even though it's
223. 8:49still it's new management. whatever I'd
224. 8:51say grand reopening. Um I tend to take
225. 8:54the position like I would do as many
226. 8:55grand openings as I can. Um because no
227. 8:57one even knows you exist anyways. And so
228. 8:59I just like let's just get the word out.
229. 9:01Number one. Number two, one of my
230. 9:03favorite kind of opening strategies is
231. 9:05actually from Wendy's. So I don't know
232. 9:07if you're familiar with how they do it,
233. 9:08but they give so the first 500 people
234. 9:10when they do a grand opening get a
235. 9:12golden keychain of a Frosty. And so
236. 9:15people line up for like a long time to
237. 9:17get one of these keychains. when they
238. 9:19get that keychain, it means that they
239. 9:20get um as many uh frosties or like
240. 9:25little little cones um as they want. And
241. 9:28so that seems silly, but what ends up
242. 9:30happening is that a lot of people drive
243. 9:32with four friends and they're all stoned
244. 9:34out of their mind and one person says,
245. 9:35"Let's go to Wendy's because they're a
246. 9:36regular customer and get a free Frosty."
247. 9:38But when they're there, they buy fries
248. 9:40and everyone else pays. And so it's this
249. 9:42tiny very free thing that creates 500
250. 9:45regulars for a new location. And so what
251. 9:48is the what's the equivalent that we
252. 9:51could do? Do you have like a an
253. 9:52interesting dessert or like or just like
254. 9:54you know I mean something and I know
255. 9:55obviously we're sit down but like
256. 9:57>> be a margarita pizza because it's cheap
257. 9:59for us to make and
258. 10:02>> okay
259. 10:03>> like a small margarita pizza something
260. 10:04like that.
261. 10:07That's kind of cool.
262. 10:09>> That works.
263. 10:11Yeah. I mean if they just get sodas
264. 10:13you're like you're like good to go. Um,
265. 10:16yeah, I like that. Um, and again, like
266. 10:19you can limit it and if you want, you
267. 10:20can just do it for one year and just see
268. 10:22how that goes. Um, but again, it's like
269. 10:24so, so this is um kind of like
270. 10:26marketing. So, we have to get people in
271. 10:27the door. So, these again, just like all
272. 10:29the other ones I did today, like I I
273. 10:31like to fix backend first, like let's
274. 10:32fix the monetization and the
275. 10:34profitability and then we can drive more
276. 10:35on the front end. So, from a grand
277. 10:38opening perspective,
278. 10:41do you have a budget right now that
279. 10:42you're planning on spending towards
280. 10:46promoting the fact that it's like brand
281. 10:48new or like have you run ads like you
282. 10:49run Open Table right now and that's like
283. 10:502500 bucks a month.
284. 10:52>> Yeah.
285. 10:52>> Yeah. Can you spend more on that or No,
286. 10:55>> it's capped.
287. 10:55>> Capp. Okay, got it. Um,
288. 11:00[sighs]
289. 11:05the best reopenings is trying to get
290. 11:07influencers in the area to come and eat
291. 11:10for free and then make videos.
292. 11:13you already are doing it.
293. 11:14>> We're like we're in the process of the
294. 11:16rebrand. So the whole space
295. 11:20will be kind of
296. 11:23bring all the people and that's
297. 11:27>> so I think so I so I do like the first
298. 11:31first 500
299. 11:34pizza promo
300. 11:37and just say like no big guys. I'm
301. 11:39kidding. [laughter]
302. 11:40Uh who take advantage of it? Um, but I'm
303. 11:43thinking about like it's like, hey, if
304. 11:46you're over like 10,000 followers, like
305. 11:48we'd love to have you come out. Um, it's
306. 11:51like either you do that or you just look
307. 11:53at the hashtag that's closest to you or
308. 11:56the five or 10 hashtags are closest and
309. 11:58then DM the people who are local um who
310. 12:01made those images because obviously they
311. 12:02rank high if they're high up on the
312. 12:04hashtag. And then again, it's not
313. 12:05because we care about the hashtag, it's
314. 12:06just it's an easy way to find people who
315. 12:08are local. and then invite them all to
316. 12:10the quote grand opening and then have,
317. 12:12you know, kind of like a red carpet
318. 12:13experience. They, they just get excited
319. 12:15about it. They make videos and then
320. 12:17those videos you can then use
321. 12:21to basically run the promotions on Meta.
322. 12:31>> It's kind of like the local ambassadors.
323. 12:34Yeah.
324. 12:34>> It's like, hey, like I would frame it
325. 12:36now like I'd frame it as like, hey, if
326. 12:38you're one of the locals in the area,
327. 12:39it's like, we want to bring you back in
328. 12:40because we want to show you what we've
329. 12:41done uh with the place and we're just
330. 12:42looking for ambassadors, people who just
331. 12:44who know people in this area who can
332. 12:45spread the word with us. It just it
333. 12:47frames it nicer than like, hey, if you
334. 12:48have 10,000 followers, come come promote
335. 12:50my It's it's a little better. Um,
336. 12:58and so when these people do this, when
337. 13:00they pick up the the pizza promo, they
338. 13:02have to leave a review,
339. 13:05which obviously should be five stars,
340. 13:08plus they have to make a video of them
341. 13:11getting their their pizza or whatever
342. 13:13with their keychain. Um, and so then
343. 13:15this gives you 500 videos that they will
344. 13:19post and that become ads.
345. 13:24plus the reviews. And so it's not like
346. 13:26you're just giving it like this way you
347. 13:27get a shitload of collateral. You get a
348. 13:29ton of organic buzz. Um and then you
349. 13:31obviously get the reviews boost right
350. 13:32off the bat. And if you want you can do
351. 13:34this and say, "Hey, you got to do it on
352. 13:35three platforms."
353. 13:39So it could be like Google, you know,
354. 13:41Yelp, Open Table, whatever,
355. 13:43>> etc. Um okay.
356. 13:47[sighs]
357. 13:48Now, when I run any kind of promotions
358. 13:51for brick and mortar, I like having some
359. 13:54A-frame that's sitting either in front
360. 13:56of the door. Uh, so like it's in the way
361. 13:59in the sidewalk. Um, are you in a heavy
362. 14:01foot traffic?
363. 14:03>> Okay. So, it's not standalone.
364. 14:06>> The restaurant isn't standalone.
365. 14:08>> It's in a busy neighborhood, so it's
366. 14:10standalone. [snorts]
367. 14:13>> But it's not Yeah. Yeah. It's not like
368. 14:14you're not getting Yeah. Yeah. Um, then
369. 14:17in that situation, what I would do is
370. 14:18I'd put the A from on the inside of the
371. 14:20door. So, it's almost like they walk
372. 14:21right into it. So, they that way they
373. 14:22can't miss it.
374. 14:23>> Yeah.
375. 14:24>> And that's what I'm gonna whatever my my
376. 14:25daily specials are, I'll do it there.
377. 14:27Uh, because then people notice it. Just
378. 14:28make sure it's handwritten. Print never
379. 14:30works.
380. 14:31>> Okay. Um,
381. 14:34okay.
382. 14:36The last very small piece, which I don't
383. 14:38know where this technically fits, is
384. 14:40that right now I think your average So
385. 14:42that's just a carry out.
386. 14:46Your average carry out right now is like
387. 14:4756 bucks or something like that. I feel
388. 14:48like I saw that number.
389. 14:50>> They basically didn't do carry out. You
390. 14:52could only do it over the phone. They
391. 14:54just put it on to effectively assume
392. 14:56take out zero and delivery zero.
393. 14:58>> Got it. Okay. My Okay. So
394. 15:02what I want to do is basically have a
395. 15:03carry out spend bonus. So, if we know,
396. 15:06and you'll find this out quickly, so
397. 15:08maybe just wait a month before you do
398. 15:09this one. Got enough to do. Uh,
399. 15:12once you find out what the average order
400. 15:14value is, I would just say, okay, if
401. 15:16let's say average order is 60 bucks, I
402. 15:18would say if you spend over 75,
403. 15:21you get a thing. Or if you spend over
404. 15:2380, you get a thing. Just to nudge them
405. 15:25over that average um to bump it up. And
406. 15:28usually that'll drive a significant
407. 15:30amount of margin on the carry out side.
408. 15:31If you like this video and you're a
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419. 15:49business owner, appreciate you and uh
420. 15:50enjoy.