6 Ways To Recession Proof Your Small Business

Last week at the North American Pizza & Ice Cream Show, I took an hour to step away from our exhibit booth and listen to the keynote speaker Jeff Joiner, from Midwest Venture Partners. Jeff is a professional trainer in the foodservice industry. Jeff’s seminar touched on a subject that all of us need to pay attention to: 6 Ways To Recession Proof Your Organization.

No matter if you own a small pizza place, ice cream shop, clothing store or other business, the steps he spoke about the recession proof your organization will benefit all. Here are my notes from his keynote speech:

Jeff opened by stating 25% of all businesses within the next 3 years will be gone, out of business. You have the choice to make now to be part of the 25% or use the recession to your advantage by strengthening your business and being part of the 75%. Those businesses that come through the recession will be stronger, have less competition to deal with, and will experience a sales boom like they have never seen.

1) Stop Selling Food

A restaurant should not sell food, they need to sell and focus on a feeling. Taco Bell sells “full.” Cracker Barrel sells “comfort.” Chuck-e-Cheese sells “fun.” Your customers can buy food anywhere; you must focus on a feeling. The focus on feeling must flow from your service, menu, staff and décor.

Feelings such as welcomed, pampered, comfortable, dazzled, important, entertained, excited, appreciated will all bring customers back before your food does.

Jeff also spoke about the difference between “too” and “for.” This was an “aha!” moment for most of us in the room. In an average restaurant, things happen “too” you. In a great restaurant, things happen “for” you. This is the difference between average and successful.

2) Get Rid of Satisfied Customers

Until hearing this part of the seminar, most business owners were happy with customers who said they were satisfied with their experience with the business. Jeff explained that satisfied customers were not acceptable, in fact satisfied customers were only one step away from dissatisfied. As an owner you must strive to create a business that creates customers that are past satisfied, past the next step of loyal and create customers that become apostles for your business.

An apostle will preach the message of your business. Now would you rather have a satisfied customer or an apostle customer? He used the example of “pizza by committee.” When a group of ten people are together, deciding on where to order pizza from, there is always one dissatisfied customer who will never order from one place. The key is the apostle customer who says they ONLY order pizza from your place and this is where the group follows like sheep and buys from you.

In order to develop and create apostles, you must have your entire staff on board. One bad staff member can ruin the efforts of even the most dedicated owner.

3) Invest in Growth

Your time is money. Time like money can be 1) spent 2) wasted or 3) invested. It may seem like going to Restaurant Depot to save $10.00 is time well invested, but it does nothing for the future growth of your business.

You must invest and spend your time out of the store fishing for business. If you get out of your business, introducing yourself to other small businesses, inviting them to come try your food, you will add to your sales. Within 5 miles there are probably businesses you have never been too. Take 30 minutes a day to visit these people, introduce yourself and the feeling you sell. Next time they are going out for lunch or dinner, you will be first on their mind.

10 new customers a week X $15.00 a visit= $600.000 a month in incremental revenue. If only half of these people turn into monthly patrons, the results are shocking.

-After 1 year = $27,000 a month increased revenue
-After 2 years = $97,000 a month increased revenue

The best part of this strategy is it takes no money. Just investing your time in growth!

4) Develop a Menu Strategy

DO NOT LOWER PRICES! This goes for all businesses, not just restaurants. Lowering your prices will devalue your product and it is almost impossible to bring the price back up.

-A decrease from $10 to $8 = 20% decrease
-A increase from $8 to 10$ = 25% increase

Your customers most likely won’t notice the 20% decrease and it is not likely to increase their sales frequency, but a 25% increase will catch the attention of your customers and is likely to lead to a sales decrease in their frequency with you.

Instead you should engage in menu engineering. Break down each menu item and determine how much profit there is. Then examine your past sales and determine how popular the product is.

If you have items that sell well but don’t make you much money, Jeff called these items “Plow Horses.” You must either raise the price or reduce costs in either the ingredients or portion size.

Jeff called other items “Puzzles.” These items have a good profit margin but are not very popular. You can reposition these items on your menu to gain higher visibility, use suggestive selling, change the name or recipe, or replace with another item.

The two other categories that Jeff positions menu items in are “Stars” and “Dogs.” I think it is clear what should be done with products that fall in these categories.

5) Give Your Servers a Raise

Teach your servers to get better tips. Teaching your staff to make great impressions on your customers will help you sell feelings and make for a happier staff that is making more money during the recession.

6) Abolish Indifference

Jeff asked the audience what the opposite of Up was? We all answered Down and were right. The opposite of Hot? Cold. The opposite of Love? Answers ranged from hate, dislike, don’t love but were all wrong. The opposite of Love is Indifference. Not caring at all. You must strive every day to abolish indifference! This will kill a business faster than anything else. To explain this fact Jeff displayed the reasons why businesses lose customers:

Death = 1%
Moves Away = 3%
Influenced By Friends = 5%
Lured Away by Competition = 9%
Dissatisfied by Product = 14%
Turned Away By Attitude of Indifference on Part of a Company Employee = 68%

If a customer is lost to another brand or concept, research shows that they are lost forever! With indifference being the number one reason by a long shot that you business will lose a customer, make it your number one priority to abolish indifference!

Jeff believes that if you follow the six steps he lays out for your organization, a growth of 10%, 30% or even 50% is attainable. The only problem is you must take action. Just reading this or having sat in the seminar will not change your business. You must get out there and take action today! None of these 6 steps required any money either, just your effort.

This directly relates to the free trial we offer new customers. It doesn’t require any money to increase your sales; you must take action though and follow the steps we provide in the “30 Day Action Guide and User Manual.” To those who have taken the manual and the free trial and showed tremendous sales increases, we salute you. You are in the 75% who will make it through the recession. Add these 6 steps from Jeff and there is no telling how much growth you will enjoy over the next few years.

Please remember these are my notes from Jeff’s seminar. I tried to be as accurate as possible. To learn more about Jeff Joiner and Midwest Venture Partners and how they can help your business, please visit their site by CLICKING HERE.