Industry Update
Opinion Article22 April 2014

Restaurant for Sale

By Ignacio del Riego Cuesta, Director of Learning & Development at Oryx Rotana Doha

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del Riego Cuesta

If you ask a "marketer" what are the basics of business, he´ll tell you that in order to sell something a link has to be made to one or more of our needs as human beings. Accordingly to Maslow´s Theory our needs are segmented into five hierarchical chapters: physiological or basic life survival, safety and security, love and belongingness, self-esteem and self –actualization. Applying this theory to marketing, your ability to effectively appeal to one of these motivational drivers is a key determinant of your potential success.

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Hotel business is answering many of the needs that we have. Sleeping and eating are clear physiological needs for us, right? There are many other needs that our industry covers. Some related to safety and security, belongingness, self-esteem… Let´s talk about business.

Today the world is in a crisis. Actually, half of the world is in a strong crisis and the other half has been and still is in a chronic crisis. Too many small business, restaurants and bars, close because "the revenue doesn´t pay the bills". In many cases new entrepreneurs take over, with the hope to survive, confident they can do better than others. Some are experienced managers or waiters, some immigrants convinced of their capability to succeed, some savers willing to go into business… We keep seeing this businesses struggling. Owners complain… "it´s because of the crisis. Before everything was different".

If you pay attention to those businesses you will realize that they are operated like ten years back when "everything was different". The quality of their products, promotions, menu… even prices, are same as few years back. I´m not here to give a lesson on how people should run their business but… if everything was different than now… why to keep doing the same as before? How can we expect our business to behave differently, when we operate it the same way as before the crisis, when market was different? And in any case… is it not clear that without changing any of the factors in the formula… result will remain the same?

We eat because we have to eat. When I say "eat" I mean eat and drink, of course. Breakfast, lunch, brunch, dinner… We also eat to do business; how many deals and important decisions are made around a restaurant table? We eat to celebrate… whatever! Eating supposed to be part of many celebrations but in reality it becomes the way we celebrate. Birthdays, anniversaries, weddings, divorces, funerals… A great manager I had at the beginning of my career used to say: "people are desperate to have fun and celebrate. We only need to give them an excuse to go out and do it in our outlet".

How often you find a hotel outlet or a restaurant coming up with something different? Innovative? Winning strategies seem to become insufficient; Ladies Night, Happy Hour, Football... are not making the difference anymore. What to do? Good example is some popular Night Clubs; never stop coming up with parties, theme nights, new DJs… For sure in a restaurant the challenge is not easy. What can be done? How can we surprise our guests? How can we give them a reason to come one more time during the week? How can we get them to bring some friends to our place? How can we show them how much

we appreciate their loyalty?... At the end of the day… how can we make the difference, beat our competition and grow our business?

I want to share with you a case. Think about a small restaurant. We could even call it a "ranking file restaurant"… with low investment, no Michelin stars, "battle style" furniture, no marketing or advertising… The owner is not an educated man with a certificate from a Hotel School. He is a worker. He opened his restaurant and some months later he opened a second one. His restaurants are full of customers. Word of mouth is his "marketing campaign". Asked about his success he said that he sells food in a different way than others do. He decided to sell cheaper and make packages as a permanent promotion: Sandwich with a soft drink in a quite good price. Looking at the price… he mentioned that he knows it is cheap. He said: "while others have to sell certain amount to make some money, I have to sell three and even four times more quantity to make that money". The difference here is that this entrepreneur is making three or four times more revenue than most of the restaurants like his. He is working harder, but he has opened a second restaurant in a record time and is planning to open more very soon.

Ignacio del Riego Cuesta

Originally from Madrid, Spain (1972). Studied in École hôtelière de Lausanne(EHL) 2007-8. More than 15 years of Hospitality experience in Europe, America, Africa and Middle East. Currently working as Director of Learning & Development in Oryx Rotana Hotel, Doha, Qatar. Career interest in people related aspects for business development.

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