12 Ideas for a Profitable 2005

1. Join a co-op
When it comes to marketing muscle, size counts. Ten restaurants in the Boise area found that out when they joined Idaho's Local Flavor, a cooperative marketing campaign set up by Sysco Food Services. The campaign allows the participants to pool their advertising resources. Doing so has saved the individual group members about half the cost of ads.

Each Idaho's Local Flavor placement features the chef or owner of one participating restaurant—many of them with signature dishes showcasing Idaho products. "Our budget has stayed the same," Stephanie Telesco, co-owner of Brick Oven Bistro, told a local newspaper. "But we're getting far more—the impact is far greater than what we could do on our own." She saw immediate results after the first ad spotlighting Brick Oven ran.

Five restaurant owners in D.C.'s Georgetown neighborhood—which has lost some local traffic in recent years because of limited parking and a number of disruptive construction projects—pulled together to bring the community back with a "30 days of $30 menus" campaign late in 2004. Each restaurant created a special three-course menu for shoppers and others visiting the tony area.

Brian Reymann, owner of the Sea Catch Restaurant and Raw Bar, noticed immediate results from the promotion. "We had people call specifically because they had seen the ads in various stores and cross-promotions, and others come in and tell us they were here specifically for the $30 menu," he says. The $30 menu was offered during the otherwise-slow 5:30-7:00 period.

Similarly, more than 7,500 people visited restaurants in downtown Albany, NY, during a week-long promotion in which 18 restaurants offered a special $16.09 dinner promotion (Albany was founded in 1609). Surveys during the week suggested that 55 percent of the visitors had never before patronized the restaurant they chose. The event was such a hit that about half of the restaurants expanded it, adding a special lunch menu or extending the time for the specially priced menu.

Those partners need not be other restaurants, by the way. Meehan's Ale House in suburban Atlanta injected some new life into otherwise-sleepy Monday nights by offering a $12 martini and manicure deal once a month. Manicurists from a neighboring salon are on hand for customers, who often order that second martini along with appetizers. The special has brought in new customers and boosted sales on those nights by about a third for Meehan's.

2. Pack it up
Your guests may be too pressed to stop and linger over a meal, but busy lives don't diminish their desire to have someone else do the cooking. Once, QSR ruled the takeout world; today, it's a fast-growth area for full service operators. The boom in takeout shows no sign of abating, and often takeout sales are just icing on the cake. For Chili's and Applebee's , takeout orders now account for more than 8 percent of total sales; the latter chain estimates that about 80 percent of those orders represent incremental business. Ruby Tuesday, which introduced its Curbside to Go service in 2003, expects takeout to take off in the next few years.

But takeout isn't just for casual dining chains. Fork , a Philadelphia bistro and bar, recently opened Fork, etc. to sell meals to go and house-made charcuterie, dips, marinades, baked goods, produce and grocery items such as cheese, vinegar and olive oil. "It's very similar to a meal at Fork, but it's deconstructed," says co-owner Ellen Yin. It's too early to say how Fork etc. will impact the bottom line for the organization, but opening the deli (along with launching a new private dining room) was part of an overriding strategy to increase efficiency (one kitchen supplies all) and to take the guesswork out of food purchasing, Yin says.

Miramar , a French/ Cuban bistro that opened in Highwood, IL, last year, packages its Moules Mariniere, Seared Tuna Nicoise Salad, Bouillabaisse and Steak Frites for curbside carryout. Shortly after offering meals to go, Miramar was packing up as many as 50 meals a week, and chef/owner Gabriel Viti could see the potential. "We feel there is a lot of room for growth in this area," he says.

3. Slash Utilities
Small changes can have a noticeable impact on utility expenses. Richard Young, director of education for PG&E's Food Service Technology Center (www.fishnick.com), loves to talk about how foodservice operators can trim their gas, electricity, water and sewer usage. He suggests starting out with these simple steps to effect bottom-line savings:

• Upgrade your lighting from incandescent to compact fluorescent lamps. Their light quality is comparable to the old-fashioned, less-expensive standard bulbs, but fluorescents last perhaps 10 times longer and are energy misers. "If you take one of these and put it in your walk-in refrigerator, where the light might be on 16 hours a day, and your energy cost is 15 cents per kilowatt hour (the going rate in California, admittedly among the highest in the country), you'll save $50 a year," Young says. Multiply that by the number of fixtures in the restaurant, and the savings add up quickly.
• Change out the prerinse spray valves at the dishwashing station. Old-fashioned spray valves dispense about four gallons of hot water a minute; new higherpressure designs do the same job using only 1.6 gallons. So, as Young points out, operators save in three areas: water, hot water heating and sewer charges. Savings for a typical restaurant run $100-$300 a month.
• Replace traditional exit signs with LED signs, which "last virtually forever and use just a trickle of energy," he explains.
• Install plastic strip curtains on walkinrefrigerators.
• When shopping for new equipment, looking for Energy Star-rated appliances—still a relatively new phenomenon for commercial products— "is a slam dunk," Young says. Studies showed that two comparable restaurants using standard and connectionless steamers, for instance, had water and sewer bills of $2,000 and $700, respectively. Highly rated fryers use half the energy of their older counterparts; insulated holding cabinets trim electricity costs by a third; the list goes on.

4. Go bilingual
Hispanics represent an increasingly powerful and rapidly expanding segment of the diningout public. Forward-thinking operators are making them feel welcome. At Pizza Patrón, a fast-growth chain of takeout stores that operates in Spanish-speaking neighborhoods, counter help is required to be fluent in English and Spanish, signage is in Spanish and menus are bilingual. Last summer, Cracker Barrel Old Country Store started offering bilingual versions of its menu as well; the English translation is directly next to the Spanish text. It's color-coded to help the server (who may not be bilingual) understand what the guest is ordering. While many Hispanics are bilingual, the Spanish menu is a courtesy for the occasional family member who is not.

5. Bundle courses
Presenting separate items as part of a complete meal not only simplifies the ordering process for your customers, it offers an opportunity to tweak the food costs for an entire meal. El Bizcocho , a fine French restaurant at the Rancho Bernardo Inn in San Diego, has been offering two tasting menus with four and five courses for three years. Doing so not only gives patrons a chance to try things they might not otherwise eat, "It really gives us a lot of flexibility to drop more money to the bottom line," says Stanley Kaminski, corporate director of food and beverage for JC resorts, which owns the property.

Here's how: The bill for a tasting meal ($55 for four courses, $75 for five) may not necessarily surpass the average check, but portion sizes can be smaller, and higher-cost items can be teamed with more economical products. "You always need some incredible, slam dunk course—now, it's Kobe beef ribs; people see it, and they want it," Kaminski says. Beyond that, the kitchen can fill in the gaps on the other courses, plugging in what's available seasonally (and assumably at a favorable price) or menuing more economical species of seafood, for example.

6. Push the plastic
Reloadable gift cards were one of the hottest sellers during the past holiday season. In the past year or so since the Panera Card debuted, sales of the card rose 200 percent. Gift card sales at Fatburger Restaurants'.company-owned locations jumped nearly sevenfold after the fast casual chain converted from paper gift certificates to plastic cards. The cards are viewed as a convenient, easy gift solution and a way for parents to exercise some control over how their kids eat and drink. They also mean interestearning money in the bank for the operator.

As it says on the Fatburger card, "Plastic never tasted so good."

7. Tackle the turnover
Revolving doors cost the average restaurant $2,300 per hourly employee and $23,000 per manager, according to People Report. Experts counsel finding creative and more effective ways to keep staffers happy, such as involving them in decision making and asking what benefits they consider important. The right training can have an impact, too.

A cross-training program called Career Quest at bd's Mongolian Barbeque helped slash turnover from 150% to 30% within six months of its debut last January. Career Quest requires each employee to learn two unrelated jobs, such as tending bar, grilling or busing tables; to advance, they must master those two areas; workers who master five areas become mentors. Besides reducing turnover, the program has helped productivity.

8. Say cheese
If you're game, tackling the next hot menu idea can pay off. Dan Sachs, owner of Chicago's Bin 36 , thinks cheese is the next wine. He's so bullish on cheese, in fact, that he recently shelled out $35,000 to convert a space in his wine-centric restaurant to a cheese bar. Before the bar, Bin 36 listed about 15 cheeses on its menu; today, a separate cheese menu available at the 20-seat bar and throughout the restaurant carries some 50 choices.

Sachs says cheese is like wine in several respects. First, fine cheeses change from year to year, depending on environmental elements. More important, "People in an abstract way think they like it, and they may know a little about it. But at the end of the day they don't know much except what flavors they like."

That, Sachs argues, creates the perfect climate for profits. Facing 50 selections can be a little daunting, so Bin 36 thoughtfully (and strategically, from a food cost standpoint) assembles a variety of cheese flights. The flights are a win-win-win: Customers love the presentation (flights are the top sellers on the menu), the restaurant determines the mix of higher-and lowerprofit cheeses and both food and labor costs fall below the standard percentage for other items on the menu.

During the first full month of operating the cheese bar, sales at the restaurant shot up seven percent, or about $45,000. Not only did the expansion create excitement among regular customers, it also cultivated a new crop.

Promoting beverages has turned into an art at some establishments. Here are some of the more inventive solutions:

9. Move the bar
A redesigned prototype for Mitchell's Fish Market put more focus on beverage sales. Before the reconfiguration, bars were separate from the dining room; after, they were opened up and more engaging for patrons of the 10-unit growing concept. The results were palpable: beverage sales soared from 17 percent to 27 percent of total volume.

10. Make the fun
In Cincinnati, Bella Luna Restaurant owner Harry Stephens vowed that he would like to be known as a being a great seller of wine rather than for having a restaurant with a great wine cellar. That's why Bella Luna runs three inventive wine promotions:

• On weekly Wine Down Wednesdays, every bottle on the list sells for half-price. Wine sales go through the roof on those days, up from the average of one case to four or five cases a night. The restaurant makes a modest profit on each bottle; but more important, Stephen says, "the customers love it, servers love it because they sell a great deal of wine and I love it because I get people who are not dining at other restaurants."
• On the biweekly mystery wine day, guests choose blindly from a basket of five inexpensive bottles the restaurant is considering as new additions to its wine list; each bottle is $20. Stephens gets valuable feedback from servers and guests about each choice. "On weeks I don't do it, people are asking for it," he says.
• Finally, every Friday Stephens gives the key to his private wine stock to one server, allowing that person access to bottles ranging from $50-$125. Servers are trained to present the standard wine list, then offer guests something special from the reserve. If the guests shows interest, the server brings out four bottles and describes them along with their price. "We get 100% sales when we do that," Stephens says.

The upshot of all these efforts to make wine fun, Stephens says: A restaurant with $850,000 in annual revenues sells about 600 cases of wine a year.

11. BYO nights
A number of operators have found that regular bring-your-own wine nights provide a powerful value proposition and incentive to dine out. Guests like it because they can drink exactly what they want and not feel they're paying restaurant-scale markups on wines they might not like anyway. Savvy restaurant owners are using the practice to encourage guests on otherwise slow nights.

Chicago's One Sixtyblue actually plays up to wine collectors with monthly "dust off that bottle" dinners. Each $65 prix fixe dinner is designed to complement a specific wine.

12. Use promos
Specials and signature drinks can fatten checks and customer counts. Several restaurants in Los Angeles have launched lunchtime day promotions to encourage drinks orders. Luna Park features the "midday-midglass," a half-glass of wine for half the normal price. And the Cuban-themed Paladar in Hollywood runs a "$3 You Call It" call drinks and beers special from 11:30 P.M. to 1:30 A.M. on weekends to provide dinner guests incentive to stick around.

Beverages need not be alcoholic to be profitable, either. The Veranda , a casual establishment at the Rancho Bernardo Inn in San Diego, sells a variety of signature drinks; promoting those drinks at lunch boosts check averages by at least $4.50 per person. Ingredient costs for the drinks run about 70 cents. You do the math.