The U.S. Small Business Administration reports this country has 29.6 million small business owners. Restaurant entrepreneurs counted among them, this collective group of owners constitute an army of hard-working Americans pursuing a passion and build something for themselves, be their own boss and support their families and local economies.
It goes without saying that small businesses like restaurants require hard work as well as tremendous time and financial commitment. Here at Kabbage, we sought to understand what that commitment looks like, including what’s on the minds of restaurateurs when it comes to increasing revenue, and the technology investments they’ll make in 2018 to achieve those goals.
A 2017 Kabbage survey, polling 400 established business owners, unveiled the motivations and commonalities that link all business owners across all industries. The results? First and foremost, all business owners have a tremendous amount of hustle. More than 60 percent take only one vacation per year, and when they do, 75 percent still work. It showed 86 percent work on the weekends, dedicating a significant amount of time to their business and passion.
It also found business owners will make technology investments a top priority. One in every three business owners plan to invest in technologies to get back more time in the day, alleviate manual processes and, ultimately, grow their business in 2018.
Restaurant Industry Goes Even Further
To understand more about the specific types of technologies restaurateurs and other business owners plan to invest in 2018, Kabbage conducted a follow-up survey, polling 800 business owners.
The new findings show an overwhelming focus on mobile technologies, with 63 percent planning to invest; a well-advised investment given nearly 85 percent of all mobile users searching for a restaurant go on to make a purchase. The total average across all industries is 51 percent. In fact, restuarants and bars are among the most bullish to invest in mobile, trumped only by accounting services (70 percent) and marketing agencies (67 percent). This includes developing apps, mobile advertising, and automating texts to help acquire new customers or deepen existing relationships.
The survey also found nearly half (45 percent) in the restaurant industry plan to increase their social media advertising budget by at least 20 percent this year, boosting their presence across Twitter, Facebook, Pinterest and Yelp. What’s more, nearly in one in four (23 percent) plan to invest in real-time analytics or big data solutions, to help analyze and identify growth opportunities. This is an emerging opportunity for all small businesses as insights, typically available only to large corporations, are becoming increasingly more available.
Like any other investment in a restaurant, the amount needed for digital marketing efforts, specialized equipment or new locations can vary depending on the scope of the goals and price tag. Often, these costs can exceed well beyond what’s available in the budget or offered by traditional lenders. In these situations, it can be tempting to revert to unfavorable financing options such as credit cards, personal savings or asking family for funding.
There are newer ways businesses can accumulate cash, such as peer-to-peer lending, crowdfunding sites or alternative lending. These services give restaurant and business owners alike greater accessibility to significant amounts of working capital to meaningfully grow their business. For example, Kabbage, recently expanded its lines of credit to up to $250,000 to allow growing businesses get the capital they need to make larger and more strategic purchases, and manage cash flow needs during seasonal cycles. To understand more about financing solutions, and which products are best, business owners should research their options.
Whether you’re a distributor expanding its line of products, a caterer gearing up for the wedding season, an expanding brick & mortar restaurant or a food truck in need of a new vehicle, there are options available. Opening and growing a financially successful food business requires much more than simply having a good idea. And this year, those in the restaurant industry are clearly making key investments in technology and marketing to build their businesses. Now that’s a recipe for success.
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