This article was first publish in the December 2022 edition of Savour magazine.
Owning and running a hospitality business is all-consuming and we often get stuck inside our operations. If we’re running the floor or working in the kitchen, we often don’t allow enough time to work on our businesses to ensure they are running efficiently or looking forward to the future and what challenges lie ahead. Taking some time to study the market and consider what is going on both in and outside of your business can really pay off by allowing you to discover what you should be focusing your attention on to increase efficiency and profitability.
Marketing plan
Having a marketing plan is key to a successful business, especially when you create a strategic marketing plan outlining goals (using the analysis from your SWOT, PESTEL, customer journey and feedback) to create a well-rounded plan. Whether your goal is to increase sales, and awareness or just keep above water, knowing where you stand and how you think you can achieve your goal is very beneficial.
Using the analysis of your SWOT and PESTEL, create a set of informed goals you wish to achieve. Include sales increases, profit margin targets, brand recognition and market share. Use these goals to inform decisions you need to make. Don’t do something if it doesn’t help you reach a goal. Now you have these goals, think of some ways you could achieve them. One idea can go towards multiple goals and some goals will have many ideas, e.g., radio ads may increase brand recognition, market share and sales but will not increase profit margins. Developing new menu items, running up-selling competitions and promoting certain menu items could all increase profit margins. There are many strategies you can employ to achieve your goals and developing these can be fun. But whatever you decide to do, once you have your strategies in place, make sure you have a way of measuring their success.
Measuring successes can be difficult but make sure you use your goals to help determine this. Having a marketing plan and following it can be very rewarding and is usually much more successful than just running promotions ad hoc. Once you have done it, you will become more comfortable developing them in the future. You can use the Restaurant Association marketing plan template from our member resources.
MARKET SWOT & PESTEL
Two classic business tools are the SWOT analysis for evaluating your own business and the PESTEL analysis for evaluating the external market. Take some time to fill these out and get several people to consider them for you as well. Start with a brainstorming exercise and then remove less relevant/frivolous ideas.SWOT –
Strength, Weakness, Opportunities & Threats – Internal Analysis
- Strength – What are you really good at? What things do you have that others don’t? What is your competitive advantage? This includes talent, physical setup, location, financial position
- Weakness – What keeps you up at night?
- Opportunity – What areas of opportunity are there? – Opening for another service, starting a food truck, starting delivery services, developing product to sell offsite?
- Threats – What opportunities of others could affect you? New development nearby, local competitors doing a refresh, new entrants to the market?
PESTEL – Political, Environmental, Social, Economic & Legal – external analysis
- Political – What’s going on in the political world? Changes to legislation, tax reform, trade policy – and how may they affect your business in the future?
- Environmental – Physical changes to the environment such as new developments, climate change issues, do you need covered outside seating?
- Social – What’s trends and movements are there? Keto, low carb, social conscious, environmental efforts, etc.
- Technology – What new tech or knowledge is there that could affect the industry? Uber Eats, Lab grown protein,
- Economic – What’s going on in the economy, growing, possible recession, interest rates, etc.
- Legal – Changes or threats in the legal arena. Employment law obligations, food control plan requirements, labelling and nutritional information?
Once you have completed this, hopefully, you will have identified some areas you can focus on and use in both your marketing and general business strategy. Keep them and refer to them from time to time and create updates to see what has changed.
Customer journey and service blueprint
Another insightful exercise to do when you have some downtime is a customer journey and service blueprint. These two models are a great thought experiment for you and your management team to get a top-down look at what is really going on in your business and where you can and should be making changes.
Customer Journey
Write down what a customer does when they come to your establishment and all of the touch points, important moments and interactions they have from as early as when they arrive in the carpark to when they leave and/or even write a review. See it from the customer’s perspective. Get in their shoes and remove your own impressions and bias. Use this exercise to identify any issues or barriers to making the customer experience a pleasurable, effortless, and swift one. You can also extract possible opportunities as well, for example, do you need an electric car charge point? Half my customers just buy coffee, should I put in a coffee window? Currently, we don’t offer dessert menus after the main, should we? The bathrooms are very dated, is this reflecting badly on our image? Make sure you include the menu selection, ordering process, feedback opportunities and payment process.
Service Blue Print
This exercise is the same as the customer journey but from the venue’s side of the time line. It looks at what the customer sees, what they don’t and what goes on to support the operation. What happens after a customer places an order for a meal, how is this managed, who is involved, where are there delays, communication breakdowns etc.? There are many ways of doing this. I won’t go into detail in this article, but the main idea is to expose inefficiency or ineffectiveness in the operations. It could expose issues like double handling, blind spots, over-management or wastage and areas for improvement such as up selling opportunities, systems that are needed and areas of consolidation.
STAFFING PLAN
Planning your staffing for the year can also help curb some anxieties and give your staff an idea of what to expect. Staffing is a major challenge in the industry at the moment and showing your staff you care about their progression and future will help with retention. I forget the origin of the quote, but I do believe in the concept that training and preparing your staff for their next role, whether it is with you or not, will only pay dividends in the future.
Promotions – are there any promotions that you may want or need to give? Aligning these with any milestones for the business or personal development goals can be a good idea to ensure credibility.
Performance reviews – it’s never too late to introduce a performance review structure to guide your employees towards greatness. Using their job descriptions is a good place to start, but make sure they know about it early in the year so they have time to think about it and work on any areas they may wish to.
Succession – if one of your key staff leaves, can the second in charge step up? If not, how big is the gap? It can often be much easier to promote an employee than hire externally and reducing the gap can be a great way to motivate your staff and protect from a future breakdown.
Training – what training can you give to your staff and when? If external, then what is available during the year? Having a professional development plan for each employee is a great way of keeping track of who needs (and wants) what. You can find a PDP plan template here.
MENU ENGINEERING
Having a goal of increasing your profit margins is always on an owner’s top five list. The only way to do this properly is to know what you are currently tracking to achieve by knowing your dish costings (check out the Professional Development workshop on food cost and menu engineering to introduce the concept of the menu engineering cycle). The idea is to understand your dish costings and analyse the sales data to inform your decisions but the key to this is to fully cost your menu honestly, involve your team and pay attention to details.
The best thing you can do to ensure 2022 will be a stellar year for you is to write down exactly what you would like to accomplish in detail.
Write down the tasks you will need to complete to move you closer toward accomplishing that goal. When looking over the list, if there are tasks you don’t feel equipped to tackle on your own, ask for help.
We all get stuck, some people just stay there. Being helpless is a mindset. Being average is a choice — and so is breaking free from it.
Don’t do it alone, get other perspectives, ask your staff and peers or get advice from the Restaurant Association business mentor, contact the RA Helpline on 0800 737 827 for details.