How Restaurant Owners Can Create an Effective Marketing Budget

Your restaurant may serve fabulous food at unbeatable prices, but it’s all for naught if no one knows about it. That’s why restaurant owners need to create a marketing plan and give it a budget big enough to be effective while not so big as to squander your money.

The rule of thumb for restaurant marketing is 3% to 6% of sales. These are really guidelines rather than rules, but if you are outside the range, you should have a good explanation. If your restaurant is struggling, it’s all too easy to shortchange the marketing budget. Many good things can be done on a shoestring marketing budget, but don’t expect it to match the results of a well-funded campaign.

Throwing too much money into marketing is not only wasteful, it’s wrongheaded. The reason your restaurant is successful is because it’s a good business, and all that marketing does is make that success easier. You should be able to get your marketing message out on a 6% budget, although you might temporarily spend more for a short-term public relation campaign.

In all cases, it’s vital to measure your marketing return on investment (ROI), that is, the profit contribution of your marketing budget divided by marketing spending. The formula for marketing ROI is:

Marketing ROI = [Incremental Revenue Attributable to Marketing * Contribution Margin – Marketing Spending] / Marketing Spending

For example, suppose your restaurant undertakes an advertising campaign with a budget of $10,000 and shortly thereafter notices an increase in revenue of $50,000. This creates an ROI factor of 5.0. Now suppose the contribution margin (i.e. the  price of meal minus all associated variable costs for the meal) is 60% — that’s the incremental profit earned by each meal served, on average. Given the 60% incremental contribution and the $50,000 increment of increased revenue, we figure the margin ROI to be 0.60 x $50,000, or $30,000. Now subtract the marketing spending of $10,000 and divide the result by the same $10,000:

Marketing ROI = [$50,000 * 60% – $10,000] / $10,000 = 2,

This shows that every dollar spent on the advertising campaign generates $2 to net profits. In other words, it’s a good deal. If you spent appreciably more the $10,000 on marketing, your ROI would decline, making the investment less efficient.

Perhaps this sounds a little fancy for your restaurant, but it’s a good way to make sure you aren’t wasting your budget on inefficient marketing.

Other factors to consider when budgeting your marketing efforts include:

  • Spending less during the offseason and more during the busy season. There is no use investing heavily in marketing during months when all your customers are at the beach or the ski slopes.
  • Thinking imaginatively about promoting your restaurant through ads, websites, emails, signage, social media, brand awareness, and interesting web content.
  • Don’t let a sudden cash crunch stifle your marketing budget. Remember, IOU Financial is all about shoring up your working capital quickly and affordably. You can apply a loan from us to keep your marketing program chugging along on all cylinders as you work through your cash problems. Remember, those problems will only get worse if your customer volume dries up.

By committing to your marketing budget and continually measuring its effectiveness, you can ensure that you spend the optimal amount promoting your great restaurant. Bon appétit!

7 Smart Bookkeeping Tips Every Small Business Can’t Live Without

For small business owners, bookkeeping serves as their personal scorecard. Numbers show your success and failure and give a quantifiable shape to your business results

In a small business benefit, your future is on the line. You need to have a good overview of all the expenses and revenue. Perfect bookkeeping can save you a lot of time, money, and nerves.

To help you establish an effective bookkeeping strategy, we’ve assembled this 7-tip list. If you like assessing the numbers and want to keep crucial business matters in your own hands, bookkeeping is the way out. Let’s explore more.

Never mix personal and business finances

For an up-and-coming brand manager or CEO, it may be tempting to achieve as much as possible in as little time as possible.

The over-dynamic outlook could lead to severe financial consequences. In a lot of cases, company heads will use company money for personal expenses and vice versa. Doing so will only cause additional chaos.

When your business is only starting, spending a lot of money is an attractive thought. To prevent tax-related headaches, issue a business credit card along with a separate business account. Taking care of this takes mere minutes and allows you to earn your company a proper credit rating.

“One might find it surprising that a lot of small businesses and startups fail because of improper financial allocation,” explains Josh McCarty, a marketing and economics writer at Brilliantassignment.co.uk. “Separate your finances because mistakes will happen once your business grows.”

Make use of automation

Bookkeeping was once considered a difficult and time-consuming activity. Accountants and bookkeepers had to do everything manually, but a lot has changed in recent years. With the development of AI technology and automated software, bookkeeping has never been easier. There are no more tedious instances of manually creating spreadsheets.

Bookkeeping software makes our lives easier. For one, the data you need is stored in the cloud. Unlike physical storage, cloud storage is safe from any compromising.

No matter the conditions or situation, your data will be stored safely. In addition to this initial security feature, small businesses should immediately connect their banking accounts to bookkeeping software.

By establishing this connection, you will ensure that your books are up to date and that there is no need for last minute checks.

Do regular check-ups

Most bookkeepers and companies keep track of their reports and records on a quarterly basis. A tip that will make your life easier is to check your reports on a weekly basis. The interval here will give you enough time to grow your business, but you’ll also be able to identify any changes in your revenue.

Having a clear overview of your transactions and the overall financial state is a business advantage you deserve to have.

With each new product launch or a promotion, you can see how good the move was by looking at the reports. By analyzing reports from a certain period, you can see if a move was successful or not. If it was, you can repeat it and invest more money or stop implementing it if it was a failure.

Use tracking software to monitor your employees’ hours

Running a small business can face you against some hardships. If you have a dedicated team of employees, tracking their hours might be somewhat difficult manually.

Without knowing exactly how much has someone worked, you risk budgets deficits, imprecise payments and other spending that you don’t need. To prevent this from happening, have your entire small business use time tracking software.

Employees will also find the change refreshing. With time tracking software, they will know exactly how much they’re being owed and when they have vacation time and what was their sick time.

Bookkeeping will be much easier, and your small business will grow exponentially. Integrate the tracking software and the time tracking software for ultimate efficiency and swiftness.

Always track business expenses

Brand growth is something everyone wants to feel, but not to experience. Why is this the case? When small businesses grow, there is another echelon of responsibilities that you have to take over.

Business expenses are just one of them. Even though you might feel good about having a bigger budget, you will find it annoying to file tax reports. Overspending is often a case, and precisely because of that, you need to track your business expenses.

When traveling, make sure you keep every receipt and categorize it accordingly. There are several apps that allow you to scan the receipts and store them on the cloud.

The move might seem simple, but it’s a bookkeeping tip that every small business can’t survive without. By tracking your business expenses, managing your budget and filing tax reports will be much easier.

Don’t be afraid to ask for help

At the beginning of every company’s life, you can most certainly handle all numbers by using off-the-shelf software. However, once you start experiencing growth, you might feel overwhelmed by the sheer number of tasks needed.

Keeping track of everything is important, but many companies tend to shut down because they’re hesitant to hire a professional.

Although it may seem like hiring a professional bookkeeper is unnecessary spending, it’s a massive benefit that can save you a whole fortune. Letting a professional handle your bookkeeping will free up valuable time you can use to focus on making your business grow. Associating yourself with a professional is an investment for the future.

Have your deadlines and tax obligations in a visible place

Bookkeeping is both monitoring the growth of your company and working from deadline to deadline. From tax reports to building business credit, it’s always beneficial.

Tax reports have to be filed, but even the most important deadlines can be missed if you’re overwhelmed. Thus, before undertaking anything new, you should write down all upcoming deadlines and obligations.

Having visible dates will allow you to run your small business without unnecessary stress. Additionally, missing deadlines and ignoring obligations will only bring you problems with the law.

The IRS has many useful tools for calibrating your calendar. If you’re more of an old-fashioned person, you can write them down on a piece of paper. Knowing your deadlines allows you to plan accordingly and increase revenue.

To conclude

Every small business relies on impeccable bookkeeping. Implementing these tips will require minimal effort and bring you maximal results. Remember to always be organized, prepared, and aware of upcoming deadlines. With recent developments in technology, you will rely on software to do the heavy lifting. Just by implementing these tips, you will ensure a fast and beneficial period of business growth.

Guest Post: About the Author

Scott Mathews is a professional content writer in such topics as bookkeeping, work productivity and marketing. Scott`s the biggest passion is blogging and travelling. He regularly takes part in different career growth conferences and contributes his posts to different  websites. Contact him on Facebook and Twitter.

LinkedIn Strategy: How to Get Your Employees to Use LinkedIn to Benefit Your Biz

Any professional has likely heard about LinkedIn and even created a profile on the social media platform. However, with the wide reach of over 562 million users, LinkedIn is a valuable tool that should be utilized to promote your business. Below are ideas about how you can help your employees to use this platform not just for their personal needs, but to benefit your company:

Become Authority Figures

To set your company apart from the competition, an effective way is to facilitate your employees to becoming authority figures in their respective niches. LinkedIn is a platform that can help with this goal, allowing employees to post articles and blogs on their profiles.

A marketing expert can write about the latest trends, while a mechanic can write about tips on preserving a car’s value. When online viewers search for keywords related to the content, they read the articles and start to form trusting relationships with your employees.

If your team members can become known in their fields for their authoritative and informative content, you will improve your brand recognition and attract new customers.

Network

To find new clients, business partners or investors, you should encourage your employees to network. LinkedIn makes this objective easy by promoting online networking that transcends time and location constraints.

Your employees can join industry-specific groups where they can join conversations and make important connections. They can search for specific individuals and reach out to them on the platform.

LinkedIn Showcase Pages allows employees to create pages that highlight a certain area of the business, and then share that with a target audience. For example, if your business needs an investment to explore franchising opportunities, you can create a page that reflects your earnings and profits, as well as goals, and share that with interested investors.

If your team members are encouraged to make connections on LinkedIn, your company can leverage that for business opportunities.

Recruit

Increased competition has made it challenging for some businesses to recruit and retain employees. LinkedIn can offer an advantage to your HR department in this regard.

LinkedIn makes it easy to search for candidates based on their current position and experience. Instead of posting an ad on a general career site, such as Indeed, you are able to do a targeted search and view detailed information to make faster and more informed hiring decisions.

LinkedIn Career Page is another option for candidate searches, helping prospective candidates come to you. The Jobs tab on this page lists current openings as well as insights from current employees about the company and their positions.

The Life Tab helps candidates determine if your company would be the right fit for them. This tab offers photos and videos shared by your employees as well as any written content that can be shared about your company culture.

This helps your business share benefits that candidates can expect if they join your team, and allows your hiring managers to connect with potential employees on a more personal level.

There are multiple opportunities that LinkedIn offers that can benefit your business. Some of them, such as promotion and marketing, may require a financial investment. If you need a partner that can help you grow your business, IOU Financial is ready to help. We work with small business owners to help them finance their goals. Contact us today to learn more about our easy and fast loans of up to $300,000.

Starting a Home-Based Business: What You Need to Know

Starting a home-based business takes a lot of hard work, but for millions of Americans, it really pays off. More and more people are discovering the possibilities of being small business owners on their own terms as the nine-to-five workday increasingly becomes a thing of the past. Even large companies are hiring freelancers who can work remotely in order to save on costs, from insurance to office space.

Growing a business from your home can be extremely lucrative and rewarding, but it has to start with careful planning in order to work. Not only do you have to be very focused and have goals set from the beginning, you also have to remain motivated throughout the process of garnering clients and expanding your business. Fortunately, there are several tools at your disposal, from websites to grants and other funding opportunities.

Keep reading to find out how you can start a home-based business and what you need to succeed.

Know Your Stuff

Before you start thinking about the details, it’s important to look at big-picture things first. You’ll want to be very knowledgeable when it comes to the area you want your business to be in, and you’ll need some experience, too. Very few entrepreneurs have found success with a business that they’ve never worked with before. For instance, if you want to become a consultant, you need to be well educated in whatever area you want to consult in, acquire the right licenses and certifications, and stay patient as you grow your business. Keeping realistic expectations is imperative for entrepreneurs.

Hire the Right Help

Depending on the nature of your business, it may be in your best interest to hire people to get yourself up and running, and keep it operating as a successful venture once it’s fully launched. Even if you plan an independent business that you fully oversee, ask yourself if there are people you can recruit to make you stand out among the competition. For example, if you’re going to be selling handmade works of art on a site like Etsy, should you hire a professional photographer to take eye-catching photos of your products? Has your company grown so successful that you need a second (or third or fourth) set of hands to help you create your crafts? Think about what types of employees will take your business to the next level, and then start lining up interviews. Be sure you’ve adequately prepared yourself on the job interview process by doing your research on what to ask, what you can’t legally inquire about, and what to look for in a candidate.

Stay Productive

One of the hardest things about running your own business is having to stay productive all the time on your own, with no one to motivate you. You have to be your own cheerleader, which means it’s extra important to create a space in which you can work efficiently. This includes setting up a home office without distractions and making the most of natural lighting, which can boost your energy and keep things running smoothly. It’s also important to make sure you have the right equipment for the jobs you’ll be doing; you can’t expect success if you don’t start with the right tools.

Network

Starting a home-based business usually means you can make your own schedule and set your own rules, but it also means a lot of solitude and not much time spent checking out other businesses. Networking is important to entrepreneurs because it allows them to make connections with like-minded people that could be useful now or down the road, and it also provides a support system that is helpful in the first few years of owning a business. Get online and create a web presence on social media; Facebook, Instagram, and LinkedIn are all great places to start. You can also check out conventions and similar businesses that are local.

Keep Your Personal and Business Lives Separate

It can sometimes be difficult to separate your personal and business lives, especially if your office is inside your home, but it’s imperative that you do everything you can to draw a line between the two. This means having separate bank accounts, keeping different sets of books, and making sure your tax liabilities are taken care of. Getting organized and keeping excellent records will help, as will having business credit cards and email addresses.

Starting a home-based business can be a very lucrative venture for you, but only if you put in the work. Start with a solid plan — talk to someone who’s been doing it for a while to get some advice — and use all the tools at your disposal to build up your company.

Guest Post: About the Author

Brittany has spent over 20 years as a CPA, and is writing a book about financial literacy. She also runs Financiallywell.info.

Looking to start a business? Be sure your budget is in order with our Business Budget Smart Sheet available for FREE download!