Investing in a small restaurant or bar has many advantages for the buyer, including a well-established and existing client base, cash flow, brand awareness and staff who already know how to run the show. However, new ownership can create new problems of its own, from managing employees to creating a relationship with customers. You may find that you inherit unenthusiastic and incompetent staff, that you clash with personalities due to your management style or that current customers are alienated by any big changes you make to the decor or menu.
Here is Investment Square’s guide to investing your money in an existing restaurant, so you know what to expect and how to manage any problems that may arise.
Be transparent with your employees
Change is often perceived as a painful process and can be so if you need to let staff go, alter any codes of conduct in the workplace or switch up the working process. People and staff usually resist change from new management, but you will find that if change is made for the right reasons, it will soon be accepted. This can be anything from stopping employees playing their personal music during dinner and ensuring royalty free music from a site such as https://www.melodyloops.com is played, or simply cutting back on the amount of discount each staff member gets.
For example, spending patterns in society have recently changed, and people are now more likely to choose a restaurant which offers a range of healthy food and choices which suit a wide variety of dietary requirements. Encourage staff to get on board with promoting a new menu with vegan, gluten free and super salads by bringing their ideas to the table – by involving them in the process, and rewarding them for it, you will encourage them to embrace change.
Some simple things to keep in mind while trying to make a smooth transition include:
- Rewarding ideas and innovations from employees, and making time to listen to them and their suggestions
- Make time to train all staff to work with your code of practice and get employees involved with implementing changes
- Ask around for volunteers for responsibilities within your new business
- Explain to your new employees why changes are being made to keep morale high
- Only change policies if you strongly believe that they will improve production, increase profit and strengthen customer satisfaction
Review policies before changing them
Of course, change is inevitable when new management comes into play, but both employees and customers will want reassurance that these changes are happening for the right reasons. Take some time out to conduct a review of the restaurant business you have taken over before insisting on any big changes. There will be many policies, advertising strategies and food-prep techniques already in place which you may wish to review.
Unless you plan on doing a complete overhaul of the menu, decor, and ethos, your loyalty begins with keeping your restaurants established client base. You might want to implement a loyalty program, if there isn’t one already in place, as this could prove critical in keeping long-term customers throughout a management shuffle.
Before changing up any policies already in place when you take over, remember to:
- Seek input from members of staff in each area of the restaurant before implementing anything new
- Research and talk to regular customers to find out why they like to come back again and again
- Check on local health and safety and fire regulations to ensure that any new policies you implement work with this, and that any policies currently in place meet guidelines
- Find out what loyalty programs have been used in the restaurant previously, and which ones proved to be the most successful
Generate loyalty with an upgraded rewards system
As mentioned above, you will obviously be making changes when entering into a new business in an existing restaurant, but it’s all about keeping any existing and loyal customers happy. By honoring any previous commitments and showing customers that you value patronage, you will encourage people to keep coming back, even though their favorite place is under new management.
Restaurant rewards are a great way to create one-to-one interactions with customers and create benefits such as:
- Tailored promotions for each niche of client base
- Encouraging customers to return again and again or to spend more money when they dine
- Building a database of likely diners for marketing campaigns
- Gaining intelligence about customer preferences
- Giving your customers a reason to keep returning to your establishment
- Direct advertising of new menus or events
- Keeping in touch with customers about any concerns they may have to changes you are making
- Using the information you have gathered from a loyalty program to attract and target new customers and keep your business growing
- Becoming customer-centric in your business planning
Ensuring you have a smooth change of restaurant ownership can be tough, but it’s not impossible! Remember that your customers might include different people during different times of the day or segments of your business; say breakfast, afternoon tea, evening drinks and take out. If you are taking on a bar, be sure to keep in mind that these establishments are especially sensitive to change, as people choose where they want to drink based on the clientele that goes there, entertainment available, drinks offers and management style, which can all easily change when new owners step in.
Some extra tips for ensuring your takeover is a smooth one include:
- Train your employees on where to find answers to any questions your customers may have, or information that could be needed by anyone on the phone or in your establishment
- Arrange regular meetings with staff to go over any new procedures, talk about potential problems or tensions, learn more about each other or to go over successes
- Avoid hiring too many staff at a time, let people learn the ropes so that you are not training everybody all at once, and therefore always have staff who know what they are doing and where everything is
- Set performance goals for your staff to work towards
- Choose a rewards scheme which reflects your customers and their spending habits
