Do you think your level of re-investment is too high, too low, or just right?
Independent restaurant owners who understand the critical value of re-investing know that their real margins come from smart investments that help them keep up with guest expectations as well as their own mastery of profit.
These owners typically operate at the head of the pack and have profit percentages at least in the teens.
I want you to be one of them.
The Ones Who Have It Right
Restaurant owners who re-invest at just the right level:
- Understand a sober analysis of their restaurants’ strengths and weaknesses.
- Have multiple initiatives in place to improve elements that make for great guest experiences and more than their fair share of profit, like investing in better service, dining rooms, menu offerings, and management.
- Hone their message and brand story to attract lapsed users (and non-users) and build a culture that attracts people.
- Feel that the future looks bright and have a sense of optimism and excitement even in a flattish market.
- See how team members understand the plan, and their families know that they are grateful they work in a company that has one.
- Express excitement about 2025 and operating in the age of AI.
The Ones Who Under-Invest
Others are stuck—too scared to reinvest or too unsure how to finance reinvestment. Inside their restaurants, it must be like 2019, because “Old Town Road” is playing over and over and over again.
Their profits are poor, percentages in the low single digits: the dreaded average zone made up of successful and unsuccessful operators.
These owners:
- Have not kept up with management techniques or technologies required today for running a highly profitable restaurant.
- Have not revised their offerings to reflect what people want now.
- Don’t have a message or story that people want to hear.
- Watch the competition that has handled these issues fly right by them.
- Tell me they don’t have the funds to re-invest, but I can quickly show them otherwise.
- Have team members wondering what the plan looks like, and they tell friends about concerns because they work for a company that has no plan.
The Ones Who Over-Invest
And all the way on the other side of that spectrum is the over-invested crowd.
These high-net-worth individuals have way over-invested in restaurants. They funded a concept or a management group that did not have the internal capability to succeed. And they don’t know what to do.
It can be attractive for high-net-worth individuals to invest in restaurants for all the wrong reasons. But these individuals have sophisticated business skills in other industries. When I show them how restaurant experience and adjustments to their concept, marketing, and organization will pay off, they quickly understand the new strategy.
Maybe the operator’s past success came at a smaller restaurant, or their restaurant does not have the concept and messaging or management technique that will maximize ROI.
Applying proven technique, we correct that.
So which are you—under-invested, over-invested, or wisely invested?
