Should your restaurant be on Facebook? Well, Facebook has over 400 million users, and it claims that 50% of its active users log in at least once per day. It’s a great way to promote your restaurant and its goings on and best of all, it’s free. So the question is really why you wouldn’t be on Facebook. To help get you started or to help you get the most out of your restaurant’s current Facebook page, we bring you 9 ways restaurants can use Facebook.

1. Create a Facebook Page
This one seems obvious. Creating a Facebook page is simple: Just sign up and fill out the basic information about your business. Click here to sign your restaurant up for its own business page. You can also designate yourself as a local restaurant under the “Local” option. Many smaller restaurants have abandoned their own website in favor of their Facebook page. Some restaurants have both and link them together.

2. Use Updates to Convert Fans to Your Marketing Goals
Posting simple status updates about your business — or really, anything you think is relevant — will be seen by users in their homepage news feeds. This is a great way to keep your “fans” updated with your goings on as well as to stay top of mind when your fans are thinking about dining out.

3. Interact with Your Fans as Much as Possible
When a customer approaches you in real life to tell you what they think of your business, you’ll listen. So why not on Facebook? You might hear some useful criticism, or some timely compliments. Also, when you respond, you’re more likely to get them to respond — this additional activity further increases the chance your fans’ friends will see and learn about you.

4. Create and promote events online and offline
Let people know about a special Mother’s Day brunch or a regular Friday Happy Hour by sending invitations and ask people to RSVP on Facebook. This can be a great way to increase viral marketing as information about Facebook Events travels through news feeds from your network of friends and family outwards to create a greater social media footprint.

5. Use Multimedia to Show Off your Food and Dining Experiences
Photos and videos say a lot about food, if not the overall style of your establishment. Make sure to let your fans see what you offer by posting your latest or most prized dishes. Also, photos and videos of events and happy hours can be great PR.

6. Integrate Your Page with Other Marketing Efforts
Are you also running some sort of contest or special on another site? Make sure your Facebook fans know about it. Integrate all your marketing channels. The more touch points you have with your customers and potential customers the better chance of success you have.

7. Use Existing Applications to Promote Your Story
Polls, quizzes and other types of applications are readily available within the admin section for page owners, and they just take a few clicks to install. Start off modestly, try a few, and see what works.

8. Make your Page engaging with applications
Show your restaurant’s great ratings by displaying the Zagat application or add a reservations widget through Open Table on your main page; display a video of the chefs making the house’s special; allow users to click through an interactive menu. The possibilities are endless.

9. Create an App Just for Facebook Fans
A little more advanced and this is for restaurants with larger marketing budgets, but it’s worth exploring whether or not an app would make sense for your users.

If you are a restaurateur thinking about ways to increase sales, increasing marketing, making capital expenditures, or otherwise investing in your business and looking for a restaurant loan, try Advance Restaurant Finance, LLC (ARF). ARF has been making short term business loans to restaurants for almost a decade. Despite the economy, ARF never stopped making business loans to restaurants, and ARF makes restaurant loans up to $1,000,000 per location. If you are looking for a restaurant loan, ARF is one of the first calls you should make.

ARF is a lender you can trust, and our team of experienced hospitality specialists provides a funding solution with no surprises, a quick and simple funding process, and professional and personal service.

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Today, offers to get your “credit score” for free are everywhere. When you rely on this free credit score, however, you find it can vary significantly from the credit score used by a lender making a credit decision. Why? Because these scores are just estimates of your general credit worthiness, and not the credit score used by your lender to make credit decisions.

What is Your True Credit Score
When making a lending decision, lenders only use credit scores provided by a limited number of organizations. The most widely used score is your 3 digit FICO score calculated (and owned) by a company called Fair, Isaacs (the 5 categories that make up your FICO score are discussed later in this blog). The 3 national credit reporting agencies – Experian, TransUnion, and Equifax – in addition to providing your credit report will also provide a 3 digit credit score that each calculates using its own proprietary formula.

Virtually every lender in the US only uses your FICO score or one or more of the scores provided by the 3 national credit reporting agencies when making a credit decision. Lenders may make a credit card or auto loan decision based on a single credit score, while others such as mortgage lenders often will look at multiple scores. Not surprisingly, each of these scores – since they are calculated using different formulas – will vary somewhat. Also not surprisingly, since lenders pay for the right to access these scores, none of the organizations that own these scores will give them away for free…even to you.

What about the Free Scores
The free scores you see advertised are simply estimates of your general credit worthiness and are different from the credit scores lenders actually use, although they may appear similar. Consumer reporting agencies and other companies sometimes use an estimated score to illustrate a consumer’s general level of credit risk. How can you tell whether a score is estimated? Ask the company if the score is used by most lenders. If it’s not, it’s likely to be an estimated score.

Why do Fair, Issacs and the 3 national credit reporting companies charge you for their credit scores while other companies give you theirs for free? Basically, 2 reasons.

First, Fair, Issacs and the other companies charge for their credit scores because they can. Lenders find those scores useful in making credit decisions, so they will pay for them. On the other hand, lenders do not find the other estimated scores valuable and will not pay for them.

The other reason, of course, is because most, if not all of these other companies are actually trying to sell you credit monitoring services for anywhere from $8.95 to $14.95 per month. The “free credit score” is their hook to get you on their site and get your credit card information.

Don’t be fooled. If you want to see the credit score that lenders use to make credit decisions about you, go to one of the 4 companies that provide those scores and pay the $14.95 or so it costs to get it. For example, at www.myfico.com, you can get your FICO score for $14.95.

The 5 Parts of your FICO Score
These are the 5 general categories that make up your FICO score.

1. Your payment history is about 35% of your FICO score – if you pay your bills on time, this improves your score and, if not, it hurts your score.

2. How much you owe is about 30% of your FICO score – FICO scores are calculated in part based on the amounts you owe on all your accounts, the number of accounts with balances, and how much of your available credit you are using. The more you owe compared to your credit limit, the lower your score will be.

3. Length of your credit history is about 15% of your score – generally a longer credit history increases your score, but a short history can get a high score if it shows good credit management.

4. New credit is about 10% of your score – If you have recently applied for or opened new credit accounts, your credit score will weigh this fact against the rest of your credit history. If you need a loan, do your rate shopping within a focused period of time, such as 30 days, to avoid lowering your FICO score.

5. Other factors are about 10% of your score – Several minor factors also can influence your score. For example, having a mix of credit types on your credit report is normal for people with longer credit histories and can add slightly to their scores.

Want a Free Copy of your Credit File?
Go to www.annualcreditreport.com. This site, set up by the government, allows you to request a free credit report, once every 12 months from each of the 3 national consumer credit reporting companies: Equifax, Experian and TransUnion. But remember, you can get your credit file for free, but not your credit “score.” That will still cost you.

If you are a restaurateur who wants to increase sales, enhance marketing, make capital expenditures, or otherwise invest in your business and are looking for a restaurant loan, try Advance Restaurant Finance, LLC (ARF). ARF has been making short term business loans to restaurants for almost a decade. Despite the economy, ARF never stopped making business loans to restaurants, and ARF makes restaurant loans up to $1,000,000 per location. If you are looking for a restaurant loan, ARF is one the first call you should make. ARF is a lender you can trust, and our team of experienced hospitality specialists provides straightforward funding solutions with a streamlined funding process, professionally and personally.

About 5 years ago, Dr. H.G. Parsa, currently the chairman of the Foodservice and Lodging Management Department, Rosen College of Hospitality Management, University of Central Florida studied restaurant 1st year failure rates and also why most restaurants failed.

Even though we’ve probably all heard the urban legend that 90% of all restaurants fail in the 1st year, Dr. Parsa came across a foolproof source for learning exactly how long restaurants remained in business: the health department. “Every restaurant has to be inspected by the health department before it opens, and the license has to be renewed every single year. The only time they don’t renew you is when you’re closed. I thought, ‘Wow, there we go — when a restaurant opens I know it because of the license, and when it closes I know because it’s not renewed.’ The research was done credibly, scientifically. That’s the point.”

Data was collected over four years from among 1,400 restaurants. The result: Fewer than a third of restaurants — just 29.6 percent — went under.  You can read Dr. Parsa’s study here.

Not satisfied with that, however, Dr. Parsa decided to study the reasons restaurants failed. Not surprisingly, the reasons are several and varied. According to Parsa, the factors that can lead restaurants to ruin are several — some are more obvious than others — and include the following:

Location
The No. 1 reason that restaurants fail, Parsa found, has to do with population density and location. The highest failure rate in restaurants comes about, “believe it or not, in downtown markets,” he says. “As you and I know, the highest number of restaurants per capita is in downtown locations. High real estate costs and hard to get labor make operating downtown difficult, but the single most important factor is simply that most downtown businesses operate Monday through Friday for breakfast and lunch. “Very little for dinner,” he says. “Very little for the weekend.”

Rainy Days
Parsa’s second most common reason is one you won’t find in many books. He says most entrepreneurs and restaurateurs have enough capital to open the restaurant, but not enough capital to survive for three to six months of the “slow days, the rainy days. So insufficient capital is the reason.”

Why so ill prepared? Parsa says that entrepreneurs think, “Once I open the restaurant the money will start coming in.” That’s a mistake, he says. “They need capital to survive for three to six months without a paycheck.” How much they need depends on the concept.

Size
A third factor, Parsa says, is that size matters. “We found that the highest rate of restaurant failure happens in the smallest restaurants, the mom and pops.” Why? Because such small operations tend to carry with them relatively low entry and exit barriers. In other words, it is easier for anyone to get into the business and easier to get out when fortunes wane.

“Say I’ve got $70,000,” Parsa says. “I bought myself a grill, I can make my scrambled eggs — I’m a chef. Simple as that. Because of the low upfront investments, everybody tries to get in because it’s easy. Nobody thinks about opening a book store or a movie theater because they have high fixed costs.”

Quality of Life
The fourth most common reason restaurants fail, Parsa says, has to do with quality of life. He questioned 50 operators. “Many, many times restaurant owners quit because they can’t take it anymore. They burn out,” he says. Dollars, of course, play a role even here.

High variable costs mean high maintenance or, more specifically, “high management,” he says. “That means somebody has to closely watch what’s happening. Because of that they have to be in the business every day, seven days a week. They can be married to their wife or husband or their business, but not both. That’s reality.”

Retirement
Yet another factor is ill health — that of the owner or a family member — leading to retirement. “Because of this they find they can’t stretch the time between the family and the business, so they leave,” Parsa says.

Retirement and the failure to adequately plan for it is another potential torpedo. “Restaurant owners don’t live forever,” Parsa says. “At some point they have to retire. “Too many, though, have no transitional plans. “Most restaurant owners never, ever have transition plans. They think they’re going to live forever. “Most restaurateurs never have a plan to get out. There is no exit strategy.”

Taj Mahal Syndrome
Another factor that contributes to restaurants going belly up is what Parsa, who was born in India, terms the Taj Mahal Syndrome. The famous landmark, he says, was built “not for a living person, but for a dead person. Nobody lived in that building.”

Restaurants are the same way, he says. “People want to build but that’s it; they don’t know what to do with it once it’s built. Restaurant owners most of the time have a dream of opening a restaurant, like the Taj Mahal, but they don’t know how to do the next level, managing it and building it beyond. They thought that once they opened things would happen automatically. They don’t. They never realized it’s more about what happens after a restaurant is built. It’s what I call entrepreneurial incompetence. They are competent enough to come up with the idea, but totally incompetent when it comes to taking it to the next level. That’s why they fail.”

The Right Dream
The key for anyone considering opening a restaurant, Parsa says, is to realize that his dream should not be opening a restaurant, but having and operating one.

“Opening is the first step only,” he says. “Do you have enough money to survive? Do you have the managerial skills to run it? Do you have plans for somebody to (care for) your family? Can you take time off and be involved in your kids’ lives? Do you have a life plan so that the restaurant is a part of your life, not your life itself? Most restaurant owners don’t think in these terms. But if you’re reading this article before you open your restaurant, really think it through — location, the concept, the finances.”

A restaurateur must remember, he says soberly, that “a restaurant is a living, breathing, real thing. Not a toy to play with.”

If you are a restaurateur thinking about ways to increase sales, increasing marketing, making capital expenditures, or otherwise investing in your business and looking for a restaurant loan, try Advance Restaurant Finance, LLC (ARF). ARF has been making short term business loans to restaurants for almost a decade. Despite the economy, ARF never stopped making business loans to restaurants, and ARF makes restaurant loans up to $1,000,000 per location. If you are looking for a restaurant loan, ARF is one of the first calls you should make. ARF is made up of hospitality experts with financial products tailored to fit your needs delivered by your own personal banking team with no surprises and with over 10 years in business, you know we will be here when you need us.