During the third quarter of 2014 Black Box, a financial performance benchmarking company, reported that restaurants saw the best sales trends in two years. The Restaurant Industry Snapshot from TDn2K’s Black Box Intelligence and People Report showed same store sales rose 1.6%; a great indicator of economic growth. The study is based on weekly sales from over 20,000 restaurant units representing more than $45 billion in annual revenue.

This has been the best third quarter for same-store sales since the first quarter of 2012. Victor Fernandez, executive director of insights and knowledge for TDn2K, parent company of Black Box Intelligence and People Report commented on the positive same-store sales for the second consecutive quarter, “The industry is clearly going through its best period over the last couple of years, as consumer confidence, real disposable income, the labor market and overall economic growth improved during the third quarter.”

Experts predict another quarter of positive sales growth in the industry. Wally Doolin, chairman of TDn2K brings attention to the fact that in Q3, ” same-store sales improved by almost twice as much as traffic, which means that a significant part of the improvement in sales during the quarter came from an increase in average guest checks.” To read more about the main factors that will determine the industry’s performance during the next two quarters, click here

It is challenging for fast casual enterprises with limited service to find the time and opportunity to make a real connection with their guests. It is natural that in a busy, crowded environment the staff can act in a very transactional manner to keep the lines moving, however the guest values a true connection with employees. According to the feedback system Goodsnitch, guests were 57 percent more likely to recommend a restaurant if they singled out a specific employee for praise. Some enterprises are adding floating staff in the dining areas to increase throughput and elevate the service.

The salad fast casual concept Tender Greens are very busy for lunch service and are adding staff in the dining room with the sole purpose of engaging wit the customers. Noodles & Company have been testing the effect of adding floating dining staff for this purpose for the past two years and have plans to roll out in all their stores by 2016. Tender Greens CEO Erik Oberholtzer states,”We are adding a greeter or store brand ambassador to walk the restaurant engaging guests throughout their experience…this person will greet guests upon arrival at peak times, answer questions, suggest specials or chit chat with regulars. They will follow up with guests throughout the experience to see how things are going.”

For tips on how to train staff, know your core audience and how to build customer relationships, click here

There are many challenges one faces when working on a proposal to obtain a small business loan for a restaurant. Restaurant loans are known to have high rates of default, and after investing in startup inventory and equipment it is difficult to re-sell if the business goes under because these are items that while 100% necessary to open up shop, also lose value at a very rapid pace (it would be a good idea to look into leasing equipment and fixtures). Tom Swenson, founder and chief executive officer of Bank of Montana writes, “If you are proposing a start-up business, you are de facto proposing something that doesn’t meet typical bank underwriting standards..Start-up businesses have no historical income. Traditional bank lenders rely on historical (tax-return verified) income in order to assess credit risk.”

So how do most restaurant startup companies typically begin operations? Roughly 80% of companies rely on the founder’s savings, 20% get funding from a business partner and up to a third of startups get funding from friends/family or charge credit cards. For those who do receive bank loans, most have personal guarantees from personal property such as home equity which is very attractive for a bank in a proposal. Another important note to include in proposals if it applies to you is to make the lender aware that you are committed to staying on at your job while starting the new business (if the existing household income is high enough to support debt repayment).

Of course a strong business plan and previous experience in the food industry are also positive aspects to include in a proposal to a lender if it applies. To read more about raising restaurant startup funds and how to strengthen a proposal to a bank lender, click here