Looking for guidance please

H

HannahBananas

New member
Hi Everyone,
I’m really at a loss here about this economy and my business. There is absolutely not 1 negative thing out there about our food and service, people love us and our return rate is really amazing to me that I actually did it on my own. The website is up and running ok, revention and online ordering is fine. This is my challenge. I’m used to doing 42k to 46k a month, now I’m barely doing 18k. I see the same people and also a lot of new ones, it’s just that they don;t eat out as much. I believe that the media has scared people to no end and they are just paralysed. I’ve layed off my best friend and I’m cooking alone midweek days just to keep labor where its supposed to be. I’m tired, confused and trying not to panic. I’m seeing a new insurance person today to try to get more affordable policy, I turn off equipment vigilantly to save gas and electricity. My business plan just does’nt work with the amount of income I’m getting. Trying to make rational decisions is getting harder each day. I never bought into the “daily special” pie deal because its always been about the tase and service, but when everyone in town is doing 2 pies for 15.99 with a 2 liter my Grande cheese and awsome sauce isn’t as strong an attracter as it used to be. I even added a slogan to all my new ads, Hannah Bananas, “when taste matters”. I also am running a huge christmas eve drawning. I went to all the businesses I deliver to and did a straight gift card exchange, I’m giving away free pizza for a year and hundreds of dollars in gift cert. from surrounding businesses. I’m supporting that with a half page ad and some air time on a local station I got from more gift certificate exchanges. My bills at home are piling up, the stress is unbelievable. I’m big on faith and hard work so when the sun comes up I gp back in and go right back at it. I’m adding oven baked sandwiches to the menu and Im trying to make them more attractive price wise but I still need to make my 26% food cost or im scrwed. I do have access to cash from a relative but when is enough? All my equipment is brand new, the building looks great, I just need that golden ticket to get me through this crap. I’m losing very loyal employees to the ski areas, so when I do get busy again I muight have to train a whole new crew which sucks! I really don’t believe that slashing prices is the answer because if I do that and things get better, will my guests pay the old prices? OK, Ill calm down. I see some catering links and read some sites that charge 94$ bucks a month for resources on how to get through this, has anyone used these, and are they something I’m already doing? As always thanks for your time and I hope I can network through this. I think even 30% more sales would get me through, I just gotta get there.
 
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Hi Hannah,
Might I suggest that you go out to other businesses around you and see if they’re experiencing similar drops in sales? You may want to target restaurants that are similar in price as you. If lots of them are seeing 50% or more drop in sales, then could quite possibly be attributed to the economy. But if they’re not, then it may be more than that.

You need to understand why people have stopped coming in as often or worse, stopped coming in altogether. Once you know that, then it’s a matter of making adjustments that will bring them back. Maybe price adjustments, menu additions, kick-backs, etc… all could be contributing factors. Do you offer delivery? I saw my delivery percentage jump upwards when the price of gas was over $4. People just didn’t want to drive as much.

Do you have a loyalty program to reward frequent diners? Do you have a referral program that has those loyal customers talking about you to their friends and colleagues?

It looks like you’ve got a very nice restaurant. I wish you all the luck and with your determination and hard work, I’m sure everything will turn out fine.
 
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Here is just a thought take it for what you paid for it and hopefully I can type it in so it makes sense.

First off this time of year things always tend to slow down. I was typing a manager’s meeting for our manager’s and opened up last Novembers meeting just for ideas…ended up just printing it out and using it with some comfort in knowing this too shall pass.

This time of a year for us instead of panicking (which is usually done while twiddling our thumbs) we need to motivate and get busy. It is the perfect time of year to work on perfection. Cutting labor, doing some much needed cleaning, revamping the menu, checking our food cost, checking our portion control costs and most important MARKETING!

Instead of cutting prices why not use the money you would have spent in food cost for marketing. So lets just say you were gonna slash prices and in doing so you lose a buck per pizza…use that for some new marketing. A dollar goes a long way in marketing. Did you ever think the guys who are “busy” because they are slashing prices aren’t really busy because of that…they market like crazy!

Just an idea to think about.

Hang in there.

Kris
 
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You need to wake up and smell the coffee. Every business is suffering now. Your competition is also down. Customer confidence is down and even the people who have money are not spending it. In one sentence you mention your ‘great’ return rate. Numbers don’t lie though. 46k to 18k is a 60% drop. You have lost 60% of your business. Still think that return rate is so hot?

Focusing on cutting costs is not the way to go. It is a temporary band aid at best. Close your shop one day a week and take some time off to get your thoughts together. It is far more valuable than the few hundred in sales you would get that day.

What kind of marketing are you doing? Having a misguided opinion that you are somehow above things like having a ‘daily special’ might also be an area you can improve.

Focusing on sales building and marketing is the only way to save your business. Slogans like, “When taste matters” aren’t going to do it. It sounds almost pedantic and insulting because taste matters to everyone. It is backhandedly calling people cheap. Good taste is the ticket price, everyone thinks their pizza is good. Have you ever read, “Come to Joe’s where the food is mediocre !” Focus on what you can do for the customer. They aren’t spending money because they have less.

Last week the sales numbers for Starbucks and MacDonald’s were released. Starbucks comp sales were down almost 4% while Mac’s were up 9%. Very few people outside of the restaurant business know what grande is, but they all know what gourmet coffee is, and they know it’s effect on their wallet. Mac focuses on value. Value to the customer. They have incredible quality control. It is so good that they do not need to advertise the quality of all beef patties and other ingredients. People might scoff at eating at McDonald’s, but the sales numbers don’t lie here either. Your customers are looking for value.

Obama isn’t going to fix the economy tomorrow. It is going to take years. Saving a few cents a day in gas by turning the ovens on and off all the time isn’t going to buy you any time, and depending on your ovens might actually be costing you money, as it often takes more gas to heat up an oven than to maintain the temp. Focusing on sales is the only viable option you have left.
 
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Although I may agree with some of the facts pizza mancer quoted, I completely disagree with the post.

First off no president is ever going to “fix” our problems. That is why they are OUR problems. And even if they could so what just lay down and wait until the final breath?

HB you don’t post prices on your website so I can’t really comment on what you are charging but I have been at both ends of the spectrum. We spent about six months buying into the “value” deals. Selling pizzas for dirt cheap. We were crazy busy. Had to staff the whole gang on Wed and Thurs when we were doing them on those days. We were selling hundreds. We were slamming. But at the end of the day…I WASN’T MAKING ANY MORE MONEY THAN CHARGING WHAT MY PIZZAS ARE NORMALLY. Twice the work, without any pay off.

And as a matter of fact it did just the opposite. Our Friday and Saturday sales dropped terribly…why? People aren’t going to pay twice as much for a pizza as they did two days ago. When the group here finally convinced me of the harm I was doing all those eager customers disappeared and went to the next shop stupid enough to do a gimmick deal. They WERE NEVER LOYAL customers. I am seeking out loyal customers looking for a great pizza. I am looking for customers who sees a pizza like I do…ya know the pizza you take out of the oven and say mannnnnnnnnnnn THAT IS A GREAT LOOKING PIZZA! My pizzas are great, I use great products and I know the competition is willing to sacrifice the quality of their product to make a couple of bucks. You use grande cheese,you need customers who appreciate that.,…it does make you different…they may not understand why your pizzas are better but you do you don’t have to sell 2 pizzas for 15 bucks because people will buy one of yours for 15 bucks. You just got to keep your name in their face…by marketing.

After being in business 14 years and opening two shops we have had our share of hard “seasons” I know for a fact it was the quarters we found all over the place that saved our place. It was a bandaid but the wound healed. When we are aware of quarters we end up saving dollars.

I think being confident in your product is great…and it is great to advertise your confidence. We just started carrying soup and as we were passing out samples someone asked what kind is it? Our waitress jokingly said it is the best soup you will ever taste…just try it…as he cashed out he agreed and we truly believe the soup is the best they will ever taste.

Hanah make sure you are doing all the basics you hear about here. Every order Every time. Boxtopping, magnets, menus are not options. Make some specials where you bundle products. It forces them to up their ticket price without costing you. Have suggestive selling contests. ALL THE TIME.

Keep turning the friggin oven off if you aren’t using it…check your phone bill rates, credit card rates, food rates, use a scale, continue to cut labor,invest in some great marketing and hold on tight. It is just for a season.

Kris
 
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Some good reading here…
I am looking at this thread and thinking of a:
What not to do list, and a:
To do list.
I hope you can get through your downturn in sales and come out of it with success in the future.
 
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Pizzamancer:
You need to wake up and smell the coffee. Every business is suffering now. Your competition is also down. Customer confidence is down and even the people who have money are not spending it. In one sentence you mention your ‘great’ return rate. Numbers don’t lie though. 46k to 18k is a 60% drop. You have lost 60% of your business. Still think that return rate is so hot?

Focusing on cutting costs is not the way to go. It is a temporary band aid at best. Close your shop one day a week and take some time off to get your thoughts together. It is far more valuable than the few hundred in sales you would get that day.

What kind of marketing are you doing? Having a misguided opinion that you are somehow above things like having a ‘daily special’ might also be an area you can improve.

Focusing on sales building and marketing is the only way to save your business. Slogans like, “When taste matters” aren’t going to do it. It sounds almost pedantic and insulting because taste matters to everyone. It is backhandedly calling people cheap. Good taste is the ticket price, everyone thinks their pizza is good. Have you ever read, “Come to Joe’s where the food is mediocre !” Focus on what you can do for the customer. They aren’t spending money because they have less.

Last week the sales numbers for Starbucks and MacDonald’s were released. Starbucks comp sales were down almost 4% while Mac’s were up 9%. Very few people outside of the restaurant business know what grande is, but they all know what gourmet coffee is, and they know it’s effect on their wallet. Mac focuses on value. Value to the customer. They have incredible quality control. It is so good that they do not need to advertise the quality of all beef patties and other ingredients. People might scoff at eating at McDonald’s, but the sales numbers don’t lie here either. Your customers are looking for value.

Obama isn’t going to fix the economy tomorrow. It is going to take years. Saving a few cents a day in gas by turning the ovens on and off all the time isn’t going to buy you any time, and depending on your ovens might actually be costing you money, as it often takes more gas to heat up an oven than to maintain the temp. Focusing on sales is the only viable option you have left.
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bullseye…I agree 100%

I would guess your prices are HIGH to get that kinda dropoff…something seems off for that kinda drop
 
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“When Taste Matters” does have a squishy feel in these tough times. Taste always matters to me.

BECAUSE TASTE MATTERS feels more powerful and focused on the customer. Whatcha think?

Yeah. NOw is when all the weak ones cut marketing budgets to save money and “save their business”. Less moise in the marketplace, less clutter . . . market big and often. But have a plan.
 
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NicksPizza:
“When Taste Matters” does have a squishy feel in these tough times. Taste always matters to me.

BECAUSE TASTE MATTERS feels more powerful and focused on the customer. Whatcha think?

Yeah. NOw is when all the weak ones cut marketing budgets to save money and “save their business”. Less moise in the marketplace, less clutter . . . market big and often. But have a plan.
Click to expand...
I like that! In fact I like it so much that I added it to the end of the quote on my web site. It used to read “If you have never tasted Daddio’s pizza we admire your loyalty but pity your taste buds.” I have now added BECAUSE TASTE MATTERS to the end.
 
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Thanks for the support guys.

I was thinking about this post again at work and some of the responses. Basically I have always seen Hanna’s as an early adapter. I would bet they are at the top in terms of number of orders placed online out of tt participants. Things aren’t going back to the good old days in the 80’s when Domino’s was king, and all you had to do was open a Domiclone to make $20,000 a month.

How did you jump at one new aspect of the pizza market, yet fail to see the ice bergs coming straight for you? Make no mistake, things will get worse for the next 4 years. Not ‘just for a season’, especially the winter season where you should have stronger sales than the rest of the year. Band aids aren’t your solution. (If things don’t actually get worse, I will be very happy to heat my shoes, but you don’t need a crystal ball to see where this is going). The best defense is a good offense. An offense of heavy hitting marketing, sales building, and customer retention. If you take cost cutting to the extreme, you should just close up shop and then you will have zero expenses, now that makes no sense so why even go part way. Did you even look up how many BTUs your oven uses to heat up and how many it uses to maintain the cooking temp?

Things like suggestive selling contests were popular and useful in 1987 when suggestive selling was the newest fad. That was two decades ago though, it is easy, fast, free and and takes minimal training. If you and your staff aren’t doing it 100% of the time you have bigger fish to fry. If you don’t have the basics down then call Kamron Karrington and order his book. Although there is nothing in there about the new economy (online ordering, SMS and email marketing, long term strategy…), it will give you a good hold of the basics.
 
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I wont say much but all I can say is that it is very slow for us. We have been doing pretty much the same advertising each month and our product is great. Like on of you guys said that we see same customers and no complaints or anything but still very very slow. Its friday 9pm now and its dead. 6-9pm was good but now just stopped and I know it used to be steady till 11pm but not anymore. I am busting my behind advertising and i will keep doing that.
 
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Hey All,
OK, lol thanks for all the comments and I see we are all sharing as usaull which is awsome. Let me update you all. I took some great advise from a couple of new friends who actually called me directly from this forum. I’m standing strong on my prices and keeping my quality and service as high as its been from opening day. I am however marketing to my exsisting and “lazy” customers who have’nt visited us in over 30 to 90 day list that my POS has stored for me complete with email addresses and mailing addresses. I also am taking advantage of my " corp" competitions advertising by adding oven baked sandwiches to the menu as well as a couple of “hometown” favs that were missing from it in the begging. One being pulled pork sandwiches which I put on the special list one night and sold out in 3 hours! My sales for the week are up around 10% from last week, I have seen more new guests this week than I have for a while, mostly from word of mouth. I’m rolling out my new menu complete with new sandwiches and a couple of “local fav” additions along with some advertising for Thanksgiving thru Christmas season so I can go strong till my busy season in the Summer. I went out and did gift certificate exchanges with other businesses in my town and they were very excited about my ideas and my Christmas Eve drawing and only one person said he wasn’t interested in joining the cross business promotion. I did a few other things on the proprty like putting up my Christmas lights early as I think people want to feel good now, whats better than Christmas and good food for that!!? I also bought a 3" X 2’ LED scrolling sign for my window that faces the stop sign at my intersection and loaded it with a ton of information that advertises for me 24 7 including my new homemade soups and pulled pork sandwiches. The bottom line is this. We are all here for a reason. We all had a spark, a drive, a purpose for opening our perspective shops. I had to stop being a victim and take control of my own destiny and not let the economy steer it for me. With some really awsome advise from new friends I took a step back and realised why I wanted to open my store in the first place and reasigned my self to those principles. I will succeed, I will be here tomorrow, and no matter what happens I will adjust according to my standards not the actions of my competition. Thank you all so much, I hope I may have helped others with a couple ideas and I wish you all the very best Thanksgiving and upcoming Winter season!!!
 
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well, here are my 2 cents…I have noticed in my 15 years of business is…a week before thanksgiving up to new years eve are pretty slow. except for day before thanksgiving and christmas eve… I use this time to get everything ready to blast again in the jan feb mar…get all my menus I need, do my updating and spending time with my family. On the other hand I have been very fortunate. During this recession I have had an increase in traffic and I am sure its because I can feed a family for half of what it costs to go to other places. While I still maintain I am higher end pizza.
 
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