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A Discussion on the Small Restaurant Business with Rieva Lesonsky

The restaurant industry is becoming extremely dynamic. Factors like luxury, convenience and costs are kicking into place, and restaurant owners need to constantly be on the tip of their toes. Reliant Funding is committed to assisting restaurant business owners across all verticals achieve their dreams, and we reached out to one of the best in the business with the goal of providing actionable intelligence to small business owners across the US.   

Recently we had the pleasure of speaking with Rieva Lesonsky, the CEO of Small Biz Daily. Our conversation with her explores innovative concepts for restaurant owners to take note, and overcoming the frequent challenges business owners face.

Our full conversation is below. It has been edited for brevity and clarity.

The key takeaways from this discussion are:

  1. Take a positive approach to Yelp, and any other bad reviews. Understand why people say what they say.
  2. Passion alone cannot sustain a business. Take due notice of industry trends, and squeeze them in to your restaurant.
  3. Research on what your restaurant needs, it’s a critical aspect to every business.
  4. Target cheaper methods of expansion like food halls.
  5. Make the shift to technology and apps.
  6. Create exciting experiences.
  7. Prepare for the next generation, from today.

Reliant Funding: As a small business owner yourself with Small Biz Daily, you understand how much small businesses constantly change, so how can someone keep up with what’s happening next and what people are looking for?

Rieva: That’s exactly right. I’m a small business owner myself so I’m not just covering this, I live this every day. You know, OK somebody is late paying me. How do we pay ourselves what you know all the struggles that happen? One of the things that you have to do no matter what industry you’re in is you need to keep up with the technology. The problem is like in a lot of cases some business owners even some restaurants think I’m a restaurant. I’m a face to face business.

Why does my website matter? I was in Kentucky two years ago and giving some guys some workshops and there were like three different restaurant owners at the table and everybody was complaining about ratings and reviews sites. There are so many other responsibilities outside of coming up with great food and managing your workforce for restaurant owners to deal with today. You can’t ignore social media. You can’t ignore Yelp and other rating and review sites.

Reliant Funding: What was the idea behind your book? Who is it directed at? Why is that this book hasn’t been written before? Or what is it providing new value to?

Rieva: My co-author and I sat there and we both cover small businesses, but he also owns his own business. One of the problems is as a small business owner, there’s so much on your plate right here managing your business so you’re working in today you’re also looking ahead at the future like what do I need to know.

So we’ve put together small business hacks that’s one hundred shortcuts to success. And we came up with the concept of we’re going to take one hundred small business topics and make sure that there’s no chapters more than 600 words. The whole idea of it was to give you the shortcuts the way to get what you need to be done without taking your entire day week or whatever spending time researching it. We just tried to shortcut it for you and say here’s what you need to know here’s how to deal with it. Now do it and move on.

Reliant Funding: How does a restaurant owner hit the market? What are they doing to react to market forces?

Rieva: Well, I think you have to pay attention to market forces. And I think what you can do is to incorporate what you see as the trends into what you’re doing. I’m not telling you to change your passion but I’m telling you that if you look at what some of the trends are. For instance right now, there are more vegetarians. I’m not telling you to open up a vegetarian restaurant.

I’m just saying add vegetarian options to your existing menu. Those are the kind of things where I think sometimes people tend to over niche things like all of a sudden when people started talking about gluten-free foods a couple of years ago. Gluten-free bakeries will work in huge cities like New York or L.A. or Chicago where you have a big enough population that the subset of people who need that kind of food is large enough for you to sustain a business.

It might not work in a smaller city so open up a bakery and have two or three gluten free options and you’re done. The key is to within your structure to offer; so we know that one of the trends is people are demanding more vegetarian food. We also know that one of the things that are moving on restaurant menus from other research from technology these companies that do research into what where people are wanting and so many are breakfast foods.

People want to have been able to have some breakfast foods all day. So let’s say you’re open all day and you have a full breakfast menu. I’m not saying at dinnertime you have to offer your full breakfast menu but what are your three most popular breakfast dishes. Offer them at night you know because from the research and from consumer demand that they want to be able to order a French Toast at 6:00 p.m. as well as 6:00 a.m. So accommodate those wishes.

Reliant Funding: Do you have any specific resources you know as you talked about places to look for this sort of research?

Rieva: Yeah. So if you’re a restaurant owner you need to get Nation’s Restaurant News. I mean I subscribe it’s just it’s an amazing resource. We cover on small biz daily we have a weekly newsletter that goes out every Wednesday and it’s free. You can sign up for it.

Technomic is a company that do a lot of analysis of menu trends so they look at what’s going hot all across the country and they say hey this is what we know is what is really is moving. Then there’s both Intel and NPD who are both huge research companies that charge thousands of dollars for their reports. I’m going to put in a plug here for social media because on social media if you find the journalists who are covering the industry and you follow them,there’s a lot of information you can find just from following them on Twitter. You don’t ever have to interact with them, but if you use it as a resource of information coming to you, you can get that in really quickly.

Reliant Funding: What’s your advice for a restaurant owner on handling their reviews and being proactive mitigating it? The introduction of Yelp to the world the first time where it was like you can’t hide from your customers anymore. What do you think restaurant owners or food service the food service industry owners should be thinking about here?

Rieva: There’s research that shows 89 percent of American consumers trust online reviews as much as they do personal recommendations from people they know. So 89 percent is a number you can’t ignore. I would say read them every day. Set aside some time to read your reviews and see before you try to get yourself in that state where you’re not going to be defensive. See if there’s any similar patterns or people are complaining. Because if there is you might have a problem that you’re not aware of.

Sometimes we know people are there they’re just trying to be critical because they like to hear the sound of their own voice. But you should at least go into every negative review and say I’m really sorry you had that experience. I’d like to talk to you about it. You have to call everybody on the phone. Their complaints are legitimate and they just want to be heard. And if other people see that you’re responding they’re just gonna think wow, what a great business owner and what a great restaurant.

Reliant Funding: Every restaurant owner reaches a point where he thinks I need to do more with my restaurant. How do you think they should really be approaching the idea of a franchise or expanding to a second store?

Rieva: So I think you have to make sure that you are truly you have everything down to a science. Very few franchises start when the owner only has one location. You have to prove that you’re capable of running multiple locations on your own. To franchise your business you’re selling your process. McDonald’s franchise owners have a lot of latitude on how they want to internally design the McDonald’s part. But summer in coastal locations are a little bit more nautical in that.

You also have to decide is your concept what’s the nationwide appeal. How are you going to stand out. There’s already so many restaurants and so many chains across the country. What’s going to make you different. There was a pizza restaurant somewhere in Michigan in Detroit or the Detroit area and they didn’t think they were ready to open multiple locations. So they got a food truck and they went to the areas the bars you know where people hang out at night with their food truck and that’s how they. Then eventually at some point they had several trucks that went out only at night to certain areas getting you know people coming back from a bar back from a ballgame.

They were able to expand their business without spending a ton of money and also able to build the brand where people who may not have known about them because they were located in a certain part of town. Now people started to know their name because they were essentially everywhere but they were everywhere with trucks and they still had their there their original location.

One of the fastest growing aspects of the food industry these days are food halls.It’s not like a bunch of fast food restaurants in a row, it’s more like flavor. The foodie culture it’s more artisanal and it’s a great place to go with the if in your city. You might think of opening a branch in there. It’s much smaller. You’re you know your share of rent and overhead and labor is much less. And again it’s a way to spread brand awareness and a way that you can experiment with different dishes or kind of targeting different demographic audiences and see if you can incorporate those ideas into your original concept.

Reliant Funding: I think one of the challenges to this off premises sustaining is how to build loyalty and it’s all about the experience. How can business owners help customers remember their restaurant the next time that they’re looking for something to eat?

Rieva: So the number one thing is I think is deliver on your promise. So if you tell somebody who’s going to be ready at 2:15 then that food better be ready at 2:15. There is a restaurant by hour at my house that my husband and I have ordered from and every single time I have gone there my food has been at least 15 minutes past the time that they said. The last time I came home and I said to my husband I am not going to do that ever again. So you have to make sure the food is warm, it’s on time and you know sometimes you can throw something a little extra in there.

One restaurant no matter what you order throws in a little for a pack of Oreo cookies. It’s just sort of here’s a treat. Sometimes that kind of is something you can do a loyalty program. There’s this so much technology at play now. McDonald’s has an app now where if you you can order what you want on that app and then pull into any McDonald’s and it recognizes because it’s a beacon on your phone. And five years from now that technology is going to be a lot cheaper and a lot more accessible. It’s all about convenience. Every American wants things quickly and easily. Provide convenience to your customers.

Reliant Funding: What are some other things out there that you think restaurant owners and small business owners in general should definitely be taking advantage of these days?

Rieva: If you want people to come in give them a reason to come in. Millennials don’t want to come and sit in a bar and get a drink but they would if there was some activity at that bar the fun was built in, like trivia nights they can participate in. Or maybe concoct your own ice cream sundae day where it’s not a dessert bar but people are going to pay for the ingredients so it’s not going to cost you any more money. People are crazy these days, crazy busy crazy whatever. So give them a reason to come in and chill-relax and yet be able to personalize their own experience because that’s what it’s all about these days. People want personalized experiences.

Reliant Funding: Do you have any other pieces of advice to restaurant owners or small business owners in general?

Rieva: Teenagers and Gen Z spend most of their money on food than they do on clothes on video games or anything else. There’s a company or an investment bank Piper Jaffray that do these studies of the teenage market. And three years ago, food hit the top for the first time ever. Plan what can you do to attract that teenage market. Because those teenagers grow up with more money to spend and then they have families.

There are times of the day that you’re not busy like maybe three, four o’clock in the afternoon that you could offer specials to teens to come in for like two hours before you start getting busy with the dinner crowd. Make it easier for them to study or plug in their devices and just chill out. It’s a great way for the next generation to get to know you.

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