I was thinking of setting a three year goal to convert my store from traditional pizza shop atmosphere into casual sit down. Eliminate phones (not entirely), self kiosk, online/app ordering and sit down service inside a 1875sqft place. We do have outside capabilities. I’d say we could seat 45 inside and another 20-30 outside.
It’s my position that with the minimum wage increase to $15 sooner than later has me thinking of converting my counter help to tipped employees and driving ticket sales three times the check averages. More upselling, beer and wine sales etc.
it might be like starting a new business,you will have to build new customer base?
Yeah, my fear is the time and money to educate and get word out.
quote from Michael Shepherd’s ebook:
So we started tinkering with our product. We installed a
new oven to give us a more authentic pizza bake, we expanded our dining
room and added a patio. Our casual counter service went to full service
complete with beer, wine, and liquor. We even scaled back our delivery
service because we were so certain our new venture was going to be so
successful and busy that we simply wouldn’t be able to do it all.
This dramatic change that we rapidly implemented, was a quasi-failure.
While our pizza was much, much better - many of our existing customers
just didn’t have the palette for an old school style pizza made in a brick
oven. Many of our customers did not like the fact that we had taken away
the counter service and replaced it with a server that they now felt
obligated to tip. Sales suffered. We totally misread the customer base and
tried to force upon them a new USP after they had already accepted and
loved the old one that we had slowly built over 10 years. We are slowly
nudging them to accept our new USP, but they have also nudged us back
toward our old one. "
Been there done that. If the facility significantly changes it is often just like opening a brand new restaurant. You lose X amount of your existing customer base and it takes time to build a new customer base. It is like evaluating a change in a recipe or a particular method of operation. If you change one variable it is not going to kill you and maybe even a couple but if you change many variables its like the proverbial box of chocolates from the movie, “you never know what you are going to get”.
Come to think of it there is a Mexican restaurant near us that has been successful for many years. The owner decided to upscale the decor and menu. Then he installed some fancy coffee espresso and related equipment. He told me it cost him one million dollars. This was before he was finished remodeling. He was very confident that it was going to really increase his sales. The place really look nice. I remember some of the customers that used to eat there. They would sit at the high tables and watch sports and have a few beers, and some good Mexican food. He also had families that came in to eat. When I saw his new place almost completed I could not visualize those guys sitting at the high tables watching the sports drinking beer, etc. going there. Last time we talked he said he was not getting the sales or achieving the bottom line he needed. I would estimate he lost 1/2 of his customer base and from all reports nobody is interested in his fancy coffee/espresso machines. He said he had 44k in that equipment and it is barely being used. Big steps require a lot of thinking and planning. If it works everybody is happy and the bottomline works; if it doesn’t you will sucking canal water for a long time. Sometimes I think we get kind of bored with our restaurants even if they are successful and we think or want to kick it up. We want bigger, fancier with an expectation that the bottom line will really go up. A few people can do it but there are others, and maybe the majority that cannot do it. Not sure why they can’t but I suspect that now instead of being the owner/manager of a proven controllable restaurant they get into things they have never experienced. Now they have to be designers or have a clear picture of the design they want. They have to anticipate what their particular target customer base will like in terms of menu and atmosphere. They may have to complete revamp or start from scratch, a new menu. Talk about variables.
Awesome feedback guys thank you so much. The only thing not addressed is the rise in minimum wages. Which one comes first (chicken or the egg), 1. I rise prices first or wait till the competition does it first? If I do it first, I’ll lose some people to higher prices and I let the competition do it first then I will lose to the shops that cut corners with under the table workers, under reported revenue etc