Restaurants Enter Survival Mode

Retailers and restaurants are some of the most common small businesses in America. It takes a lot of hard work and dedication to finally open up the shop of your dreams. Yet both are struggling as consumers cut back discretionary spending.

Forbes has a "Restaurateurs' Recession Survival Guide" story worth a look this week. The timing couldn't be more pressing.

According to NPD Market Research in Port Washington, N.Y., sales are down year-over-year at two-thirds of restaurants across the country. The hardest hit: small, non-franchised eateries with table service.

So how can you keep people coming back for seconds when unemployment is shooting up? Here are some tips from Forbes:

First, rethink your price list, says William Bender, a Santa Clara, Calif., restaurant consultant. Those monstrous, "market-price" stone crab claws may have been a hit last year, but cash-strapped diners are looking for cheaper alternatives.

Special promotions work, too. According to Hudson Riehle, head of research for the National Restaurant Association in Washington, D.C., gift cards and promotions consistently rank at the top of their studies on what people want from local restaurants.

As for how to get the word out, Rosati says that direct-mail campaigns, while expensive, have proved more effective than coupon value-packs (or "marriage mailers") containing his competitors' offerings.

Don't forget to tap your value chain for help. Vendors know you're probably hurting–ask nicely and they might be willing to extend payment terms (to a point).

Finally, keep your spirits up. The gloomier the news, the more restaurateurs "lose hold on their smiles and hospitality," says Bender. Beware: Employees and customers can feel those negative vibes, souring the dining experience.

What advice would you give restaurateurs to help them survive these turbulent times?

(Photo Credit: Forbes.com)

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