An industry health check and 3 surprising business drivers

March 25th, 2015

An industry health check and 3 surprising business drivers

Published in Restaurant Business Daily

By 

Peter Romeo, Director of Digital Content

Attendees of the Restaurant Leadership Conference are presented with no fewer than four detailed reports on the health of the industry and what trends are contributing to or detracting from it. The consensus was that sales are accelerating, albeit moderately, because underlying macro factors like employment and general economic activity are improving. Declining gas prices were hailed as having a particularly positive effect on restaurant prices.

Bad weather temporarily chilled the economy in the first quarter, noted GE Capital’s Todd Jones, but the more persistent problem is income stagnation. About three of every four jobs lost during the Great Recession were middle or high-paying positions. Only 56 percent of the jobs that have been created since then fall in those income brackets, Jones said.

Traffic remains a challenge. Jones noted that customer counts for full-service restaurants are finally increasing, but TKn2K’s Victor Fernandez noted that overall industry traffic is still 11 percent below the pre-2008 level.

The statistics reeled off by the sales and traffic handicappers were leavened by the mention of some unexpected trends that could change the numbers. Among the new currents they noted:

1. DIY restaurant food

In a validation of restaurants’ addition of butcher shops, food markets and other sources of raw groceries, the National Restaurant Association’s Hudson Riehle noted that 48 percent of consumers say they would buy food from a restaurant to cook at home. The interest in what he called DIY food was particularly high (64 percent) among patrons aged 18 to 34.

2. Summertime blues

The optimal weather conditions for the industry’s busiest season are cooler-than-normal temperatures, said Riehle. But the forecast for this summer calls for higher-than-usual temperatures along the coast.

3. Exceptional spiciness is the new normal

For the first time since Technomic started collecting data, a majority (54 percent) of consumers prefer spicy foods. “It will be a really important part of menu innovation for years to come,” said the research company’s Darren Tristano. 

Why Your Business Needs Business Insurance

Three Common Myths About Liability and Understanding the Value of Insurance

From Gregory Boop, former About.com Guide

The first question often asked by the business owner is: Do I need business insurance?

The answer is, “yes!”

In ten years as an attorney, I have always advised my business clients to obtain insurance for the risks and potential risks facing their business. In that time I have heard every rationale for why a business owner believes they do not need insurance. And, before we go on, I want to address the most common myths that lead some business owners to choose not to secure insurance.

·       Myth #1: Nobody will sue me, my business does not make a lot of money, and you “can’t squeeze blood from a turnip.” My business is not collectible.

FALSE. Everybody and every business can be sued. Everybody and every business, once a money judgment is rendered against them, can have that judgment collected. Judgment liens do not “go away”. Judgment liens can be renewed. Wages can be garnished. Equipment can be seized and sold. Bank accounts and assets can be seized to pay the judgment. Everybody is collectible at the hands of a persistent attorney.

·       Myth #2: My business is a corporation. The corporate format protects me from liability, so I don’t need insurance.

FALSE. The corporate format does nothing but protect individual investors, owners, and officers from personal liability for the actions and debts of the corporation for corporate purposes. But, under the laws of all states, the “corporate veil” of protection can be removed – or, “pierced” – under some circumstances. When that occurs, the owner may be liable personally and must answer a judgment with personal assets: your house, your car or, maybe, your life savings. When this occurs varies by state. But, a simple rule of thumb is that the smaller you are the more likely this will be.

·       Myth #3: If I die or become disabled, my family and my business partners are friends and they’ll just work it out.

FALSE. Most small businesses do not survive the death or disability of a principal member. Most children do not follow parents into the family business. Most businesses do not have the cash flow necessary to pay the estate of a deceased member for its interest in the business and the business may be dissolved. Finally, in my experience, remaining family members and business partners rarely work things out after the death or disability of a member.

Once you understand that these myths are simply false, you will be more secure in your decision to purchase insurance and value insurance as an investment in your business.

There are other myths that I have run into over the years; but, to summarize, I have yet to find a business owner with a cognizable reason for not having insurance. Your business needs to be insured.

Click here for more information from the original article.