Free restaurant marketing is my preference. However, if you understand the importance of investing in a restaurant marketing strategy, here are a few tips on where to look for funds. The goal is to ear-mark dollars which can then be invested and re-cycled as each marketing campaign pays off. If your restaurant has a sales issue and is short cash then investing in anything, especially marketing, seems an impossibility.
Here is where I have looked for cash (and found) in restaurants over the many years:
1) Government Tax Programs:
WOTC - Work Opportunity Tax Credit
The Work Opportunity Tax Credit (WOTC) is a federal program for employers large and small. It encourages the hiring of targeted groups of workers who historically struggled to find employment. Restaurants are well suited to benefit from this tax credit.
When hire new staff, follow the screening and filing processes to get tax credits from the government. Chances are that you are already hiring new staff that qualify for tax credits. Learning how the WOTC works gives you an opportunity for thousands of dollars in tax credits which can be ear marked for your marketing campaign.
Do you think it is too complicated and don't like paperwork? Then outsource the tasks but be prepared to pay a fee. My recommendation is to connect with your state's restaurant association for options. You can also reach out to ADP for help with WOTC paperwork >
If you do business within an area that has a special designation as an empowerment zone, you can claim a tax credit of 20 percent of the wages paid to the new employee up to $15,000 (top credit of $3,000). There are urban and rural empowerment zones, which are distressed economic areas designated by the government.
A qualified employee for purposes of the credit is someone who works full-time or part-time for a business located within an empowerment zone and who also lives within the empowerment zone.
You can see a list of designated areas for this credit from the IRS(PDF).
2) Inventory:
Consider the frequency of deliveries of products to your restaurant. Does the system for ordering products maximize cash and keep products fresh? Guesstimates fluctuate and extra inventory on the shelf is like storing cash. Why carry enough product for two months usage when there is a delivery twice a week? There are deep discounts for ordering volume but the basic principle of ordering based on products used keeps money in the bank. If there hundreds of items on the shelf and you are able to reduce inventory by 10%, that cash can be used for a successful restaurant marketing campaign.
On a side note, there is also the labor factor. More inventory is more counting and more calculations, more rotation and a higher risk of miscount.
Foir those who are not tracking actual usage for each item for each delivery because it "takes time" or "it's too difficult", this is when we begin to notice the successful vs those who survive.
Caution. If you have the vendor ordering for you, they are most likely not aligned with your goals. They also serve your competitors AND often receive a bonus. While it is easier for you, their goal is not the same as yours. A vendor will most likely help you keep more than enough product on hand. It may be time to "train" them as to how you want to keep the inventory lean.
Rarely do I find an operation without excess inventory. This is cash on the shelf which can be put to use immediately for a restaurant marketing campaign.
3) Vendors:
If you understand how to create an effective campaign to get a return within 30 to 60 days, and are able to recycle the funds into another campaign, you can talk to your advertising vendors for support.
While not every vendor will do so, there are a few who will invoice your business with a 15 to 30 day billing cycle. (This will depend on the age and reputation of your business.)
Schedule marketing campaigns towards the beginning of the month. This gives you a full month of responses. The invoice at the end of the month can be paid directly from the marketing campaign results. (Again, without a consistent history of success, this is gambling.)
Local newspapers have been known to work on invoice and many other marketing companies will also accept half the fee up front with the other half invoiced.
This can be risky if you do not have the skill and understanding of how to pencil out an effective restaurant marketing campaign. If you understand the five essentials to business success and have controls in place, this may be enough to give a slight advantage. Again, do not use this source of funding for testing campaigns.
This may seem an obvious option but many simply write a check when the payment is asked for instead of asking for an invoice. Ask for an invoice.
4) Not for Profit Businesses - Fundraisers
Non-profit organizations have 'armies'. I refer to non-profit organizations for restaurant marketing because they are typically paid at the end of a campaign. In essence you lend them a piece of your business for a small period of time and reward them for successfully participating. A non-profit business can be an ambassador for your business, if the reward is high enough.
First understand how much it typically costs to acquire a customer. For instance, if you send out 5000 postcards for $2500 and receive a 10% response, 500 responses cost you about $5 each. Instead of paying an advertising company up front the $5 each for those 500 customers, why not offer a non profit group $3.50 for each sale after the end of a campaign? This means the cost would be about 25% less and you would be also writing a check to a local community group for about $1750. (This works exceptionally well when you connect with a group of 100 or more participants since the work load is spread out.)
Keep these campaigns or events with non profit organizations short. Also, be sure there is ample number of people helping. Be involved and prepared to teach, assist, guide and inspire.
This one is very important to consider. It not only helps your business get found it also offers opportunity for you to do press releases and help those in your community more than you realize. Don't know where they are? Contact your local newspaper; they know.
5) Deposits:
Did you make a deposit three years ago that was "temporary"? When a business is new there are many deposits to assure the utility company (and others) you will not default. When the temporary time period expires, the deposit is then refundable. This depends on your state and agreement. Read the agreement. If $500 of your money is no longer required to be on hold, simply ask the company or organization for the process or the form to request your deposit. After all, you made it and have proven you are low risk.
Then take the returned deposit, add it to your marketing fund and begin to think about your restaurant marketing planning calendar.
Summary:
- Hire people and qualify them for tax credits.
- Check your inventory. Excess inventory is cash on the shelf.
- Ask for an invoice. Some will bend to get the business.
- Collaborate with non-profit organizations for marketing campaigns.
- Think back to when you started your business or started a new lease or rental. Are there any deposits on the books which are now available?
Did you find any money in at least one of these?
There are many others to consider but there is certainly not enough space or time here. These are not the only places to find restaurant marketing funding but they should give you a chance to think again about your business in a different light.
These are not new nor experimental. Others have already used these resources with success (as have I). If you hire a consultant and tell him/her you are short cash to create marketing campaigns, these are areas they would hopefully recommend for your consideration.
