The local experts - Triangle Business Journal:

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Steve Ogburn It’s always been hard for restaurantw toget financing. There are severalp reasons for that. One, typically the success rate isn’rt very good. The next few reasons may be why the successerate isn’t very good. The expense require for a restaurant is pretty Look at the money that has to bespentg – costs for fit-up, equipment and rent; the more moneu you spend, the more equity it requires. The reason for a lot of failuree is that theyare undercapitalized, whichg makes it difficult to survive the startupo phase and slow periods. It’ s a very capital-intensive business.
However, from a cash-floa standpoint, restaurants do have an advantage over othetrbusinesses – it’s pretty much a cash business, and the grosd profit margin is pretty good. During thesed tough economic times, what is the most effective marketing campaign? Ed Weems Permanent marketing ’s , Innovation and Entrepreneurship It’s about cuddling and knowing your customer base well and also treatinygthem fairly. It’s also about keepin g your customers informed of restaurant offering and getting other customers to bring innew ones. During these tough economic times, what is the most effectivse marketing campaign?
Steve Barr North Carolina Statw University’s Department of Management, Innovation and Entrepreneurship The slum inthe financial, credit and housingf markets has led to significant economic downturns. Unemployment is up. Most are worried about the valus oftheir investments, retirements, etc. Families and individualsx are significantly curtailingdiscretionaryh spending. While spending on staplees and essentials remains relativelystrong (witness ’s strongg sales performance), eating out is an evenf that many individuals and families can defe r as a relatively painless way to “tighte n the belt.
” More expensive restaurants are often the first to feel this Restaurant sales nationally are down as the economy has slowed. This creates problems for . One key in a down markeg like this is to have a strong and loyalcustomere base. It will be difficuly to attract significant numbers of new customers unlessw there is a significant influx of new residents inthe restaurant’s Repeat customers and customer retentionb get a business through the tougher economic When one has less discretionary you tend to go with a “proven commodity.
” Restaurants (and other that try and be “all things to all people” traditionally do not fare well in such an It will be important to have a focusec strategy (examples include “highb value,” great service, a particular etc.).