Anyone with a good small business mind?

[Hosnon]

I'm looking for advice on a situation involving a small business (specialty restaurant). The business' main competitor had a fire and nearly burned to the ground. There has already been a noticeable uptick in sales.

What is the best strategy to seize the opportunity and dominate the market? Even with insurance, I assume the competitor will be out for at least 3 months.

Thanks!

[Mikey929]

1. What?

What a strange question.

How about offer to split your profits with the guy until he's back on his feet. Do you really want to take advantage because he had the misfortune of having a fire? You should offer to help him rebuild. If you two work together, he would get back on his feet faster and then the two of you could BOTH be earning a good living.

[twilight_sailing]

39. What a strange reply.

[Dora]

2. A direct-mail coupon campaign?

Does Val-Pak work in your area? I used to work in a mom & pop mexican restaurant, and the monthly Val-Pak coupons always guaranteed an influx of customers on the day they were mailed in our city.

I disagree with the first poster. It's too bad that your competitor experienced a fire, but hopefully the business and personal losses will be covered by insurance. There is nothing wrong with you seeing an opportunity to increase your business and trying to find a way to make the most of it.

[Hosnon]

13. Good idea. I'm advocating an increase in advertising.

And yes, I disagree with the first poster. It is the responsibility of the business to get insurance in case of a fire...the competitors are not obligated to help rebuild.

[jgraz]

3. small business mind?

Is that like a semi truck driver?

[ayeshahaqqiqa]

4. Where was the competition advertising?

Was it a different strategy than the restaurant you are trying to help? A campaign aimed at regulars at the other place could help, especially since it is a specialty restaurant.

For example, my husband and I love Middle Eastern food. If our favorite spot was shut down, we'd be looking for another place serving the same type of food. A sympathetic ad in the local paper or on a flyer (or even the internet) saying, "We're so sorry you have lost your place for hummus and tabouli. But we offer both of those, plus baba and falafel and schwarma--why not give us a try?" or words to that effect--and we'd be there in a heartbeat.

[napi21]

5. Do you operate asimilar cuisine to your competitor?

If so, your best approach is to heavily concentrate onquality and customer service. Be very careful of overextending your help. It's fairly easy to contron thefood quality, but when restaurants get very busy, many times the tension takes it's toll on the help, and transfers to poor service to the customer. If you have to hire more people,now'ss the time to do it. A bad experience on a first visit, and that potential customer will never come back!

[bscottsmith]

12. you got it

best advice yet

[Hosnon]

14. Thanks. With the increase in business, they need to be sure they can handle it. nt.

[Rosemary2205]

19. Amen from a former fast food manager.

In the end it's all about the quality, cleanliness and the service. Promotion will get a few in the door but it won't keep them.

Make sure the lighting is appropriate, the place is always SPOTLESS (including ceiling light fixtures and HVAC vents) - a little extra spent on labor now will pay off for years to come.

[Hosnon]

28. Thanks. nt

[YOY]

6. Live music, comunity event tie-ins, just being hands down better than the competition in taste/value

For some ideas....

[Hosnon]

18. Hmmm...community events. Great idea! Food at local churches, perhaps? nt.

[angstlessk]

7. Why not have a 'fire sale'? RED HOT food n all?

[Castleman]

8. I don't know abut helping the other guy

however, if you make a superhuman effort in the customer service department, treat every single customer as though they are the most important thing in the world, they'll come to like YOUR way of doing things and will stick with you even when your competitor re-opens. I've done consulting for restaurants, and it is amazing how little thought is put into customer service.
If you have any serving staff that give the "single person" treatment, ie, ignoring them because the small check will likely not result in a big tip, get rid of them, or train that behavior out of them. Needless to say, don't skimp on portions or food quality at this time, if anything, bump it up a notch. Then count the profits.

[catnhatnh]

9. Try benevolence....

...and I mean the real thing-not play acting.You have been handed a true opportunity to both do good and do well.Find some way to help your competitor, be it a charity fund drive or loaning the use of your kitchen.Speak well of him at all times-remember that friends and customers of his are eating at your establishment and your attitude will come through to them loud and clear. Turn out a good product and a good attitude-don't let the rush of customers lower the value of what you deliver, remembering that those from the competitor are balancing what was to what is-any you win over are yours to keep. Also you will sleep better at night...Regards,Cat.

[midnight]

23. This does resonate will with me. I think this is the best of both

worlds. Something like this happened to a restaurant here. The smaller store, loaned a lot of jobs,and kitchen space,and has grown phenomenally over the very gracious gesture. Good luck with your decision.

[seabeyond]

10. good food, good service, good prices..... wink

[Cleita]

11. Something I used to do when business slowed down was

a coupon campaign. I would run an ad in the local newspaper with a clip out coupon that could offer a discount, a free meal with the purchase of another (a two for one deal), or a promotional special at a special price. Even though it drew in people that were always looking for deals, it also brought people into our restaurant that had never been there before and became a regular repeat business.

[Hosnon]

21. Thanks! I like the coupon idea. nt.

[porphyrian]

15. Repeat customers pay the bills.

You want to make sure whoever comes to you once keeps coming back. There are all kinds of creative ways to do this, as others are listing here. Your competitor will have the opportunity, with their insurance money, to rebuild and have another grand opening. Anticipate this, and maybe have one of your own before they can. Do what you do well, and do it a lot. And good customer service is always important, especially today with so many lame service corporate clones.

[Hosnon]

24. Good point about the re-opening.

Do you suggest a similar "re-opening" at some point?

[porphyrian]

32. Well, you don't have to have a fire or even close to have a grand opening.

Businesses do it all the time. Even if you don't call it that, maybe a "customer appreciation celebration" instead, you could take some of the wind out of their sails. Certainly they'll be looking to do the same to you.

[Hosnon]

34. Oh...(places gas can down). I like the customer appreciation celebration. Great idea. Thanks. nt.

[eallen]

16. That's not really a market advantage, except in the very short run.

When the competing restaurant reopens, if it was popular, it likely will experience a few weeks of good business, from the pent-up demand of those who missed it. The restaurant business is tough, if for no other reason, people like both variety and familiarity. I'd almost suggest what the other poster did, but with a twist: Create a new dish similar to one that was popular at the competitor, not named the same, then advertise that 10% of the price for that dish will go to help rebuild the competition. Unless you're running a chain, go for good will. Or so it seems to me. And I have nothing against crushing a competitor, when that works.

:hippie:

[Hosnon]

25. Few more details:

The business I am asking for has been around for 30+ years and has remained number one in its market. The competitor came along several years back and has established itself where no other business could before.

As a result, it is highly possible to push them out of the market or at least gain much of their previous market.

Great ideas too. Thanks!

[eallen]

33. In that case, consider opening a second site, near the competitor.

Either in a slightly better location, or even right on top. If the owner is in straits, see if they'd like to work as manager at the second site, or will take some other deal. Or steal the owner's manager, who might bring part of the customer base. If the competitor doesn't own their property, but leases, talk to the landlord, and see if they'd like a different tenant. If your goal is to displace, don't go for half-measures.

I'll send you my consulting bill.

:hippie:

[Hosnon]

36. Thanks...not sure if they are prepared to open a second location - I'll

run it by them though.

Thanks!

[KurtNYC]

17. Only a couple types of restaurants make good profit

If you don't have any money in this "specialty restaurant" yet then don't put any in. If they are trying to lure you in by saying that their competitor burned down that is a red flag right there. No one with a profitable business lets other people in when they are in an uptick. Most individually owned restaurants are money pits.

The only restaurants you possibly want to be in are:
- pizza with delivery (cha-ching!)
- sandwiches (ala Subway / Blimpie), and
- anything else where food cost is less than 15% of the check price

[Hosnon]

26. I'm not going in...friend of mine. Plus the business has been around for

30+ years and has been a huge success.

Business has been down a bit due to certain conditions and the newly arrived competitor.

We are simply trying to find ideas as to how best to capitalize on the situation.

[TlalocW]

20. Personally...

I think your move of setting your competitor's place on fire was a pretty savvy business move. :)

TlalocW

[Hosnon]

27. Haha! It was more of an act of God.

The owner is a big Karma-person and was reluctant to even report possible illegal business practices for fear of divine retribution (never reported).

[TlalocW]

31. What's funny is that this happened fairly recently in Tulsa

A guy who opened a new bowling alley in a mall on the east side (which doesn't have much traffic anymore except for the bowling alley) set on fire an old 1950s-era bowling alley to try and get more business. Shame too because it's a garish pink building - has some sort of arcing architecture to it. Very reminiscent of the times.

TlalocW

[Hosnon]

37. Interesting...but there is definitely no foul play on my friend's side. Like I said, they

were reluctant to even call them on possible illegal business practices:)

[CK_John]

22. On one street in NYC there are about 10,000 jewelry shops and

whenever you see a BigMac do a 360 turn and count how many other fast food places are clustered around. Why? Because spin off is good for business.

Small business makes two major mistakes: a)under pricing(giving away product) and b)isolation away from the market(location).

[Ganja Ninja]

29. Beware of expanding too much and too fast.

Your competitor will be back probably faster than you think. If you expand and then can't maintain your newly acquired customer base it could leave you with a surplus of inventory and not enough sales to pay your suppliers.

[Hosnon]

30. How quickly do you think they can reopen? nt.

[Ganja Ninja]

35. 60 days if there isn't any thing suspicious about the fire.

[Hosnon]

38. Thanks...that brings up something I hadn't thought of: I wonder if business was

bad and it was intentional for the insurance...???

[Mikey929]

40. Facetious, People

Sorry, I thought it was clear I was being facetious. However, I do believe some graciousness and showing of sympathy is appropriate, unless you two are absolute and total strangers. If you blatantly go after the business of a burned-out competitor, it will look shallow and shameless. I would not want to patronize such an establishment. I believe in capitalism but also believe in karma and the circle of good deeds.

Or, if he rebuilds, you can call Tony Soprano to torch it again. :)