Halo Community - Restaurant POS Blog

Impact of Playoff Hockey on Restaurants

Thu, 16 Apr 09 17:00:00 UT

We aggregated local restaurant sales in Vancouver for the first playoff game which was last night (Wednesday). We took a cross section of casual dining, fine dining, pubs and sports bars and compared yesterday's sales to a typical non-hockey Wednesday.

We saw some interesting things.

Overall, sales were up, but what you can't see is that almost 20% of the restaurants that we polled actually saw a decline in sales. Nearly all of those restaurants were in the fine dining category and likely have few or no television sets to see the game.

Some restaurants were up as much as 110% over a typical Wednesday's sales.

The makeup of the increase won't surprise hockey lovers (or beer lovers, for that matter). While food sales were up a respectable 16.4%, beer sales were up over 70%.

We also looked at the sales pattern over the evening.

Sales built steadily and then dropped of significantly when the puck dropped. This did not happen across the board however. Those in the pub and sports bar categories showed considerable strength in sales even after the puck dropped.

The BC Restaurant and Foodservices Association is encouraging their members to put promotiions in place to take advantage of the increased dining. As well, they've put together a partnership with a major electronics retailer to give their members a discount on flat-panel televisions. Smart.

What does Playoff Hockey do for a City? - Part 1

Wed, 15 Apr 09 17:15:00 UT

Two years ago, we helped the BCRFA understand the impact of playoff hockey on the restaurant industry. It was covered by most of the major media outlets in Vancouver and even had some national coverage.

In 2007, we saw a jump of between 10-40% in sales for each playoff game. The average increase was 23% and was seen across the board from full service to pubs to quick service and delivery.

More stats will be available tomorrow morning after the first playoff game for the Vancouver Canucks.

For now, here's a link to the story that ran in 2007 in the Vancouver Sun.

Vivonet Celebrates 10 Years Today

Wed, 15 Apr 09 16:00:00 UT

Q: Ryan, why don't you start off by giving me a history of the company.

Ryan Volberg, President and CEO: Vivonet was founded on April 15, 1999. Seeing an opportunity to utilize the internet to bring an end to the huge gap between the 125 year old cash register and expensive client server point of sale packages, Kevin and I dedicated ourselves to delivering a web-based point of sale and payment processing system for restaurants and retail. Ultimately we would go nine months without income, cashing in RRSP’s to make mortgage payments until an Angel investor in Seattle provided the first seed capital.

I decided to share our idea of “providing the business power of the world’s best retailers for the price of a cash register” with the top hospitality industry executive at NCR – a US $4 Billion leader in retail systems. Within a few months his belief in our vision overwhelmed him and John left his 13 year career at NCR (he was the Senior VP of Hospitality Marketing Worldwide when he left) to take over the presidency of Vivonet – with me continuing in the position of CEO. John moved his wife and three kids from Atlanta to Bellingham and one of the first things we did was to get out into the industry and share our vision with prospective partners. One day in early 2000, in a chance event John and I ran into most of the senior executive team of Micros Systems Inc. at the corporate offices of McDonalds in Oakbrook, Illinois. Micros is the world-wide leader in restaurant POS. Within 2 months we had a deal with Micros for $2.5 Million in equity investment and a world-wide distribution deal.

At this point Kevin and I were looking like geniuses… and then the dot-com crash hit. Micros, possessing the exclusive rights to our application decided not to release it as promised but rather to sit us out of the game while they suffered through the tech decline. The problem was that, with Micros possessing the exclusive rights to sell our product, we had no path to revenue, and to make matters worse, if we were to go out of business (and how could we avoid this having no revenue?) Micros would gain the rights to all our source code. Kevin and I began to formulate a plan.

We went to our investors with a proposal: Invest an additional half million for a legal war chest to battle Micros and a second half million to seed the creation of a subsidiary in the Automotive industry. Our investors said yes and we began the simultaneous process of starting up in a new business in an industry we knew little about while taking on a $600 Million company.

The legal process with Micros was a US old-school hardball education that money can’t buy. Despite enormous financial hardships during 2002 and most of 2003, Kevin and I never missed a payroll – often forgoing our own paycheques for months at a time and often borrowing money from the bank personally to loan the company – over $300,000 at one point. Many of our staff took pay cuts and unfortunately many were laid off, but our Automotive business began to take off and within a year was breaking even. Meanwhile after a nine month legal process involving every delay and intimidation tactic in the book the inevitable could be delayed no longer: By late 2003 it was time to have our hearing with Micros. http://sec.edgar-online.com/micros-systems-inc/10-k-annual-report/2003/09/29/Section2.aspx

Within minutes of Kevin and I showing up in Maryland with our two attorneys Micros was offering to settle. With our legal war chest all but depleted we agreed to a settlement that saw us regain all rights to our software as well as getting back all shares Micros owned in Vivonet for $10. We had beaten the giant, preserved the value of our shareholders’ investments and simultaneously built a profitable software company in the automotive industry. http://www.darbylaw.com/professionals/xprProfessionalDetails4.aspx?xpST=ProfessionalDetail&professional=406

In December of 2005 we closed a US $3 Million round of venture financing from three prominent VC’s – two based in BC and one in Toronto. With these funds we have been able to grow our point of sale and payment processing business by over 600% this year and are projecting the same for next year. We currently employ 51 terrific employees, many of whom have been with us since 1999. In 2006 we completed the sale of our automotive subsidiary to our US partner. The deal has netted Vivonet shareholders a 5X return on invested capital.

Late in 2008, we purchased DAS systems based in Kingston, Ontario. DAS had created not just software but a platform for building robust, extensible applications to serve the retail and restaurant industries. The platform that they created forms the basis for the next generation of Halo Secure Web-Based POS.

Q: At what point did you realize that this was a great idea?

Ryan Volberg, President and CEO: When I was VP Sales at Timeac I realized that the emergence of the internet was setting the stage for a new type of POS system. I suppose the real moment that I knew we were on to something though came when John Kirk (Sr. VP of Hospitality Marketing Worldwide) joined Vivonet in 2000.

Kevin Falk, CFO: In the late 90's the POS industry was stuck in a world of disconnected islands of information with very expensive server products that could be purchased to consolidate your operations -- it could take weeks just to get a rolled up report of your operations. If you were a small business there was no cost effective method to determine the status of your multi location business. At this same time businesses were beginning to leverage the web as a cheap transport to connect B2B -- not web-based yet -- just using the internet as a transport system. Ryan and I watched this emerge, and determined that POS and multi location management was a perfect application for this.

Q: What were the biggest challenges you faced when you started?

RV: One of the biggest was convincing investors how big the opportunity was. Most of them couldn’t believe that the majority of 500 location and down restaurant chains couldn’t answer the basic business questions such as "What are my best selling items" and "what were chain-wide sales yesterday?". Also, it has always been a challenge being o the leading edge of technology and in the beginning we were too far ahead of the customer adoption curve. We are just now seeing the kind of customer adoption of SaaS POS that we expected many years ago.

KF: Initially it was financing -- convincing angels and VC's that this was the future -- secondarily it was technology, we were the first web-based POS system -- no infrastructure had been created yet. We had to build it all ourself.

Q: What did it feel like when that first investor said "yes"

RV: Great! Seeing your dreams come to life requires capital and when you are able to bring people on board whether they are investors or employees it is a powerful moment. One yes makes 100 no's worthwhile.

KF: Relief -- then excitement.

Q: Did you ever think...maybe we're crazy?

RV: Of course. And them sometimes I think that the market is crazy because what we have is so much better than traditional (non SaaS) offerings in our market and often we have to work very hard to get customers to believe this. I really believe that you have to be a little crazy to start your own technology business, or any business; it's definitely not for everyone but for me, I can’t imagine doing anything else.

KF: Certainly, I still feel that way. That is the joy of being an entrepreneur. At least now more people are crazy along with us.

Q: At what point did you think, this thing is really going to work?

RV: When we partnered with Micros, but it turned out that older established companies are perhaps the WORST partners for heavy innovators. In reality, once we began selling with predictable regularity to scores of small and medium sized customers I knew we were on our way. Selling in this fashion means you have broad appeal and a formula that works for customers. Any business can get lucky and sell one big deal, but selling 50+ "boring" (they're not boring at all really!) deals per month, every month is a sure sign that you have a real business.

KF: When the cash projections showed that we CAN run this as a service and be profitable.

Q: What advice would you have for other entrepreneurs who are starting out now?

RV: Perseverance is the number one trait that an entrepreneur must have. Resilience too. You must keep advancing, fixing problems, overcoming obstacles, and fighting for every inch of ground until one day you reach your goal... only to set a new one. Technology changes so fast you must also be incredibly quick to make decisions and willing to listen to those round you because most often it is not the idea that is yours but the responsibility of the decision placing the idea into action.
KF: Don't be afraid to make mistakes and admit you are wrong.

Q: Very few companies make it to 10 years...what's the difference with Vivonet?

RV: Perseverance as noted above, as we have overcome far more than our share of hardships including the current world-wide economic slowdown. The other difference is that we have always meant well and even when we screwed up, the PEOPLE we worked with (not the companies, or employees but the PEOPLE) felt that and helped us get to the next level - and we did.

KF: Drive and commitment to our values.

The Ultimate Menu Ingredient

Mon, 13 Apr 09 19:45:00 UT

Google-izing Your Restaurant

Mon, 13 Apr 09 18:30:00 UT

Survey diners at the end of every meal and make menu adjustments accordingly

Crowdsource the job of sommelier

List other restaurants that your customers might also enjoy

Open-Source the restaurant - Give away all of your recipes

Take customer suggestions to improve dishes based on your open-source menu

Stage bake-offs and cooking challenges - the winners get on the menu - Apple's App Store applied to the restaurant industry.

Develop a community within your customer base - get your customers talking to each other

Put videos on your website teaching people to cook and use your customers in the videos

In addition to Jeff's ideas above, here are a few of my own (that I mostly stole from a co-worker - thanks Dan):

Customers can handle the truth

Show recommendations on the menu from other customers. It would beat the dreary response of "Oh, everything" we get from many servers when asked the question, "What's good on the menu?"

Imagine looking at a menu where it clearly stated 77% of customers liked this item.

That might take it a little to far for our comfort level, but what if we dialed it back a notch and just put on the comments from both sides.

People who loved this item commented: "Loved the spice", "Hot, but really well balanced", "Favorite Thai dish on the west side"

People who didn't like this item commented: "Waaayyy too hot!", "First few bites were okay - then I started sweating"

Much of our satisfaction is based on our expectation. Would you order this item? If you love spicy food then yes. If you're like me and you start sweating at just the thought of a Hunan pepper, then you'll probably pass. The funny thing is, other than knowing that the item is a Thai dish, we don't even know what it is. The recommendations are that powerful.

Your descriptions might not be cutting it

Let people look at your menu in different ways. Alright, now I know this might smack of 2 am post-bar visits to Denny's where the only thing you can do is point at an image of a stack of pancakes and grunt, but hear me out.

How many times have you been at a restaurant that only had descriptions on the menu and found yourself craning your neck to see what other tables were having. Clearly, there's a need. We just need to find an elegant solution. I think the right technology may already be almost here (sorry, we don't sell it). Look at the Amazon Kindle or Sony Digital Reader. When those go color, that could hold some promise.

For the Calorie Counters

Give people the information they want. For the health conscious, what if you went above and beyond any state or provincial regulations concerning health and offered to email the nutritional information for the items on your customer's bill so that they could enter it into their own diet planner? Not only would you get permission to email your customers but you'd show genuine concern for their needs.

So here's the skinny. Every day, restaurant owners create a wealth of data that needs to be harnessed. If we used it well, we could better hear what our customers are saying, both with their words and more importantly, with their actions.

I had the chance to spend some time one-on-one with Jeff on my radio show. If you're interested, you can listen in here.

Jeff posted an excerpt from his book on this topic on his blog. Click here to read it.

9 Ways Restaurant Owners Can Use Twitter

Wed, 08 Apr 09 23:15:00 UT

The Two Big Things to Keep in Mind

The two big things I keep I in mind when Twittering

Twitter is like being at a cocktail party: Engage as you would at a cocktail party. Don’t run around the room yelling “I have a restaurant! I have a restaurant!” You’ll be ignored at best, and asked to leave (unfollowed) at worst.
Let your passion for your business shape your posts.

Don’t talk about how great your service is, talk about how passionate you are about serving.

Don’t talk about how great your ribs are, talk about how careful you are about selecting the finest cuts.

Tweet from the heart – not from the wallet.

1. Today’s Specials

There are two ways to convey this.

You can either be factual:

Today’s Special: Spaghetti and Meatballs 7.99

Or you can tell a 140 character story and show your passion:

Just finished making the sauce for today’s special. Spaghetti + Meatballs $9 Come on by for lunch. 223 Main Street.

2. Food and Beverage Preparation Tips

Show your customers that you’re passionate about food and drink. It doesn’t matter if your location is downtown or in a suburban mall, if you’re in this industry, show your customers how much you care.

Videotape yourself doing simple things like seeding tomatoes, cutting onions, garnishing a plate. Post these to your website and share it with your customers.

You can even just grab the instructions done by someone else – like in this post:

The right way to dice an onion– SAFELY - http://www.chow.com/stories/10134

3. Recognize Your Staff

Your restaurant is only as good as your staff. Celebrate your staff to your customers. It’s like saying “Look how great my restaurant is” without saying “Look how great my restaurant is”.

Consider this post:

Jules is an amazing employee. Even when we get slammed, she’s so cool under pressure. We’re so lucky to have her.

How would that make Jules feel? How about the customers that get served by her tomorrow?

I’m always reminded by a story that my grandfather told me about seeing Elvis in Hawaii and watching him interact with his roadies. “You can always tell how big a person is by how he treats his employees.” Still good advice.

You can also post extraordinary service by your staff

Jon is taking the afternoon off to caddy for four ladies who came in for lunch. I don’t know who’s luckier. Me, the ladies, or Jon.

4. Funny Customer Stories

Depending on the situation, you may want to ask for permission from the “victim” of the story to ensure you don’t offend, like in this fictitious post. (The post is fictitious, but it did happen at my house. Sorry Kiana)

Poor little kid in the restaurant today. Thought the wasabi was guacamole. Wow! Good lungs. – We now have a new warning on the menu.

5. Congratulate Our Customer

Your customers celebrate events all the time in your restaurant. Anniversaries, birthdays, promotions, divorces, engagements. Here are a few ideas.

Mr. & Mrs. Jenson – Thanks for spending your 50th anniversary with us. Simply wonderful to see love last for a lifetime.

J.D. You’re finally free. Time to live your life to the fullest. He never deserved you anyway.

Congrats to Tom Miller on your promotion to the corner office! He’s now running XYZ! www.xyz.com

Go Angels! Congrats on winning the City Championships! I’m declaring Angels Day! Wear an Angels cap and get 50% off dinner.

6. Share Guest Comments

When a guest loves your restaurant, use Twitter to tell the world. Just make sure to put it into the context of the passion you have for your business.

It’s okay for them to say “Mary’s Diner has the best bacon…EVER”. It’s not okay for you to say the same thing (remember, we’re at a cocktail party here).

Instead, post something like this.

@tunagirl So glad you enjoyed the bacon. We get it from a local organic farmer and then drizzle it with maple syrup. How do vegans survive?

7. New Menu Items

When you launch a product, you’ll probably promote it by giving samples away. Let the world know:

New Bailey’s Cheesecake recipe is perfected. Premiere tonight! Come by for a free sample! 223 Main Street.

In spite of the fact that this is very "Look at me", it probably won't raise anyone’s hackles, especially if the rest of your posts are varied.

8. Interesting Ingredients

Being in the restaurant industry, you’ll notice and appreciate products that mere mortals will never even see. Consider this post:

Chilean Baby Back Ribs – SOOOOO much meat. It’s the way they’re cut. Found them at Bob’s Meats. They’re tonight’s special.

9. Promoting Businesses Around You

Some of your posts should be about promoting the businesses around you. Remember, you’re at a cocktail party. It’s completely appropriate to say “There’s a jewelry store across the street having a 50% off sale. I bought 5 pairs of earrings today.” And if it’s okay at a cocktail party, it’s okay on Twitter.

Doing this for your neighbors endears you to both them and the customers that found out about the fantastic sale. That’s always good for business.

Here’s what that post would look like on Twitter

Dazzler’s (across the street) is having a 50% off sale. I bought 5 pairs of earring! Come by for lunch afterward and show me what you got!

Other ideas?

Have other ideas? Success stories? Tell us about them. And be sure to follow both @haloPOS and @bradbrooks

To Catch A Thief

Mon, 14 Apr 08 17:00:00 UT

Barry was somewhat naive when he first opened up his first restaurant. That naivety was short-lived when a nearby competitor, who was a franchisee of a different system, confessed to him that they regularly underreported their sales to their franchisor.

"Aren't you concerned about getting caught?" asked Barry.

"Nah, they hardly ever check. And besides, I don't do it every day, so it would be tough for them to prove anything," replied the competitor, "You just stay under the radar. Don't be super-greedy and you'll be fine."

Barry considered the advice and began to underreport his sales. Just a little, but it was enough to put just a few more bucks in his jeans each day.

When Barry opened his second location, his cavalier attitude changed. He didn't want to set a bad example, since he knew that it could lead to theft from him by his own employees. So, in the months leading up to his second opening, he gradually reduced the gap between his real sales and what he reported. Corporate never even asked what he was doing differently to account for his 8% increase in sales.

Now, Barry owned 3 locations of the franchise and he was considering 2 more.

He ran his business by the numbers and while he trusted his employees to a point, he was all too aware of the temptation that a business which dealt with cash could provide to a just-above-minimum wage employee. That's why he insisted on getting his sales numbers via email at the end of each day from every location.

This morning however, the results puzzled him. About an hour before closing last night, he happened to stop by one of his locations on the way back from his cottage. The manager was out on a break, so Barry did a quick sales report on the POS system at the location.

This morning though, the sales for that location were less than the report that he'd pulled. He'd need more information, but already, his gut was churning.

In the next blog entry, Barry will assess the situation and consider his options for confronting his employee.

Ryan Volberg is the CEO of Vivonet, a company dedicated to ensuring restaurant success.

Entrepreneurial Spirit Gone Wrong

Thu, 27 Mar 08 17:15:00 UT

Brad Brooks, the Director of Strategic Accounts told me an interesting story of one of the most elaborate bar scams that I've ever run across that depicts this topic well.

It was in the early 1990's on Vancouver Island and the owner of a popular club became concerned that one of his bartenders might have a drug problem. Several times a night, the employee would excuse himself to go to the restroom. The owner began to watch closely and go into the restroom immediately after the employee, expecting to find remnants of drug activity. But each time, the owner found nothing.

The owner KNEW that drugs were involved. After all, what else could it be? The bar had been fully equipped with liquor dispensing guns and an inventory system that rivaled Fort Knox. Every night, each bartending station was counted and balanced against the receipts. The last bartender that had been caught stealing was charged by the police. In the mind of the owner, it was a completely locked down system.

But one night, the owner happened to go into the restroom and noticed one of the ceiling tiles slightly askew. Hoisting himself onto the back of the toilet and then onto the supports that surrounded the stall, the owner peered into the false ceiling. He was puzzled when he found empty bottles of cheap brands of rum and vodka.

Puzzled, he carefully replaced the ceiling tile and returned to the floor. At night end, he checked the restroom again and discovered that the empty bottles had been removed.

The next night, he visited the restroom and checked the hiding place after each employee used the facilities. Then, the first empty bottle showed up. He had found his culprit, but he still didn't know what was going on. By the end of the night, there were four more empty bottles in the false ceiling.

He called the police so that he wouldn't jeopardize his business with a false accusation. He presented the evidence to the police and they agreed to speak with the employees. The guilty employee immediately folded and confessed to his scam.

This bartender had bypassed the liquor system inside the bar. He had a hot water bottle that was strapped under his shirt, just beneath his arm, filled with a cheap brand of alcohol that he had smuggled in. When customers ordered an alcoholic drink, he used the alcohol he had in the hot water bottle.

He would apply pressure to the bottle where plastic tubing running up his body and down his arm to his finger tips allowed him to create the illusion that the alcohol was dispensed from the liquor gun. He would then pocket the cash from each drink sold this way. His cost was less than $1 per shot. The bar charged $4 per drink and he would pocket the cash. Based on three bottles per night, this employee was siphoning off over $300 an evening of revenue from the bar. Since the owner left the re-ordering of the alcohol to the bartenders, he did not notice that his alcohol supply was not being depleted as rapidly as it should have been.

Regardless of the systems you've put into place, a cunning and determined employee can always find a way around them. While this may be discouraging, it underscores the importance of shedding the naivety that will eventually make you a victim. Instead, you must be both diligent in your application of controls and in listening to that little voice inside that telling you that something isn’t quite right.

Ryan Volberg is the CEO of Vivonet, a company dedicated to ensuring retail and restaurant success.

Restaurant Case Study with Agnes- Business Killer 4: Non-traditional Competitors Cont'd:

Wed, 12 Mar 08 18:00:00 UT

While her realizations did not make her competitors any less threatening, it was interesting to see Agnes as she used those competitors to provide the clues to what her customers really wanted. Combining those astute observations with her own experiences and desires gave her the ability to compete with companies that had much more in terms of marketing resources.

Agnes used a disciplined approach to draw in customers and, at the same time, to drive more profits to her bottom line.

Each month, she focused on a single aspect to improve her odds against much larger competitors.

Month 1 – The Menu- One simple change that created instant favorites with both her staff and customers.

Month 2 – Service standards - How attention to the smallest of details made the biggest difference.

Month 3 – Delivery - Paying attention to the convenience factor essentially added the equivalent of 40 extra seats.

Month 4 – Minor renovation - Marrying restaurant design and branding gave her restaurant a distinctive, yet timeless feel and breathed new excitement into a mature concept.

Month 5 – Advertising and Promotion - How creating an anchor to tie all of her marketing, resulted in priceless word of mouth in her community.

In the end, Agnes was successful. But more than that, Agnes has come to a new conclusion about the level that she must compete at in order to continue to thrive.

It simply isn't enough anymore to stand still. If you're not moving ahead in this economy, then you're losing ground.

As we say goodbye to Agnes, take from her the lessons of accountability, focus and execution and be brave enough to apply them in your own business.

Ryan Volberg is the CEO of Vivonet, a company dedicated to ensuring retail and restaurant success.

Restaurant Case Study with Agnes- Business Killer 4: Non-traditional Competitors Cont'd:

Wed, 12 Mar 08 17:30:00 UT

While her realizations did not make her competitors any less threatening, it was interesting to see Agnes as she used those competitors to provide the clues to what her customers really wanted. Combining those astute observations with her own experiences and desires gave her the ability to compete with companies that had much more in terms of marketing resources.

Agnes used a disciplined approach to draw in customers and, at the same time, to drive more profits to her bottom line.

Each month, she focused on a single aspect to improve her odds against much larger competitors.

Month 1 – The Menu - One simple change that created instant favorites with both her staff and customers.

Month 2 – Service standards - How attention to the smallest of details made the biggest difference.

Month 3 – Delivery - Paying attention to the convenience factor essentially added the equivalent of 40 extra seats.

Month 4 – Minor renovation - Marrying restaurant design and branding gave her restaurant a distinctive, yet timeless feel and breathed new excitement into a mature concept.

Month 5 – Advertising and Promotion - How creating an anchor to tie all of her marketing, resulted in priceless word of mouth in her community.

In the end, Agnes was successful. But more than that, Agnes has come to a new conclusion about the level that she must compete at in order to continue to thrive.

It simply isn't enough anymore to stand still. If you're not moving ahead in this economy, then you're losing ground.

As we say goodbye to Agnes, take from her the lessons of accountability, focus and execution and be brave enough to apply them in your own business.