Can Your Restaurant Survive the Recession?

For those experiencing a recession for the first time, things probably appear pretty bleak. Restaurants seem to get especially hard-hit when budgets get pinched. But we should all remember that this is not the first economic crisis to occur, and history can hold fine lessons.

My paternal grandparents got into the restaurant business in the 1920's. During the Depression, they ran Mike's Café in South Whitley, Indiana. The business thrived through those tough times and later moved to North Manchester, Indiana. Grandpa sold his restaurant as a viable business shortly after my grandmother passed away in 1971.

Here are some of the things they did to be successful - in boom times and bust.

1. Know your customers. Grandpa and Grandma ran their business long before "Cheers" hit the small screen, but they were already familiar with the motto - "You want to go where everybody knows your name!" Regular customers were always greeted with their favorite beverage on the waitress' first trip to the table. Remembering a customer makes them feel special. We tend to frequent places that make us feel good.

2. Create the feeling of a bargain. My grandfather's hook was a bottomless 5 cent cup of coffee. People are frequenting restaurants less because they are trying to save money. If you make them feel like eating at your restaurant is a deal, you've weakened that argument. Low cost promotions can include free drinks during particularly slow periods. Or a shared appetizer for a party of four or more.

3. Make your restaurant a destination, not just a place to get dinner. For my grandparents, they installed countertop mechanical games, and later pinball machines and a pool table in an adjacent "game room". But there are lower cost options available as well. Depending on space and the ambience of your restaurant, consider having a "live music" night. There are a lot of great indie musicians out there who would welcome the additional exposure. Customers get dinner and a show for the price of their meal alone.

4. Limit your offerings and seek out local produce and products. Grandpa had a unique way of avoiding costly waste - he eliminated his meat on hand. When a patron ordered a steak, my grandfather slipped out the back door and down the alley to the butcher shop. He purchased the exact cut of meat he needed and marched it straight back to the grill. Grandpa earned a reputation for his steaks - and no wonder, no one served a fresher cut of meat! Buying local can reduce your cost as well as provide a fresher product.

Every restaurant is different, so take these tips and adjust to meet your business needs. Just remember a main ingredient to business success in any financial environment - think outside the box to give your customers the biggest bang for their (and your) buck!