Commercial Automatic Espresso

Conventional wisdom suggests that it may not be the best time to start up a new business or to invest in expanding an existing business during a recession. The natural instinct for most entrepreneurs and business people is to hunker down, lay low, trim expenses and hope to make it through the tough times relatively unscathed.

There's another train of thought that suggests the exact opposite strategy could pay significant dividends once the downturn is over. By spending money and expanding or even starting up a new business, you have the opportunity to capture customers from competitors who have folded, or from competition that has either fallen behind or is too busy cutting costs to worry about promotion. This line of reasoning doesn't work for all areas, but one where it has seen successful use is the restaurant industry, particularly in casual dining.

A good example that I'm personally familiar with is a restaurant in my neighborhood called Dale's Diner. Two years ago, Dale's didn't exist; as a matter of fact, Dale was working as a waiter in a well known, and very upscale steakhouse. Last year, as the first signs of recession began to make themselves known, Dale struck out on his own and leased a building that had formerly housed another restaurant. I first noticed the activity early in the summer and struck up a conversation with the budding restauranteur as he was repainting his dining area. As layoffs began to hit and people were in fear for their jobs, there was an increasing demand for comfort food and people found it in Dale's Diner. People cut extraneous expenses, including fine dining and Dale saw continued opportunity as higher end restaurants in the area began to close. Instead of simply sitting back and waiting for customers, he invested in new equipment including new coffee brewers and a pizza oven. He obtained his liquor license, installed a bar sink and portable bar and turned an unused nook into a lounge. As the recession deepened, the restaurant where he'd once worked closed down after forty years in business. But Dale's Diner had managed to thrive, since it was equipped to cater to the needs of customers who'd once eaten exclusively at finer restaurants but were cutting back, as well as providing comfort food and a warm atmosphere for customers who wanted a meal that was less processed than fast food.

If Dale hadn't invested in equipment for his restaurant, it's doubtful he would have seen the same degree of success

About the Author:

Harriet Langford is a small business instructor who recently wrote a case study about the most popular American manufacturer of Catering Equipment. Harriet frequently writes about the restaurant industry and has presented a number of papers about related topics including the impact of recession on fast food outlets, investing in commercial grade Restaurant equipment and how to retain professional waiting staff.