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Rebecca Toogood is the owner of Garden Breeze restaurant in Moncton, New Brunswick

THE CHALLENGE

As the new owner of Garden Breeze Restaurant, a home-style restaurant in Moncton, N.B., Rebecca Toogood was both excited and anxious about the next steps to make the business successful.

It was one of the few home-style restaurants in the city and was known as a breakfast place among the local community. It had a contract with an adjacent hotel to provide breakfast to the hotel guests as well as cater to the customers visiting the adjoining Champlain Mall, one of the biggest shopping centers in the province.

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Ms. Toogood knew that the first order of business was to increase sales for the restaurant in order for her to make a good return on investment.  She recognized that the restaurant needed a makeover, the question was how to prioritize her spending and to determine a budget.  She found the prospect of spending money upfront a bit scary.

THE BACKGROUND

Ms. Toogood was born into a family of entrepreneurs. Her father owned a number of car dealerships in Moncton as well as interests in commercial real estate and in the hotel business. She liked the entrepreneurial lifestyle and at an early age decided to pursue this as a career.

In 2005, she graduated from the Ron Joyce Center for Business Studies at Mount Allison University and started working at her father's car dealership. While she was able to save money, she knew that she wanted to venture out on her own.

As a student, she worked as a waitress at the Garden Breeze Restaurant, which was started by her grandfather. She loved interacting with her customers and decided to explore opportunities of getting into the food service business.

One quick and easy option was to acquire a franchise, but Rebecca was not ready to take on the huge amount of debt required to acquire such an operation.  Around the same time, as luck would have it, the family decided to sell Garden Breeze Restaurant and offered it to Ms. Toogood.

Initially reluctant, it made financial sense for her to consider the purchase, so in Sept. 2012, she bought the restaurant in partnership with one of her uncles who had been involved with running it in the past.

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THE SOLUTION

Before spending any money, Ms. Toogood prepared a number of budgets with different scenarios and started to do a bit of marketing research on her customer base.  She attended a number of food industry trade shows and found out that breakfast was the fastest growing market segment in the restaurant business.

As the restaurant was known as a breakfast place, Ms. Toogood decided to build on this reputation by aggressively advertising in the local newspaper. As the restaurant also had a dedicated meeting and conference room facility, she also started targeting various groups for breakfast meetings. Around the same time, instead of doing a complete and expensive renovation, she started a phased plan starting with replacing the furniture and fixtures in the main dining hall.

THE RESULT

The plan worked and her average week-over-week sales increased by 25 to 45 per cent (as compared to last year). She also started targeting the lunch and dinner clientele by offering specials and value deals, as well as soliciting seasonal events such as Christmas functions.

One of the most surprising discoveries she made was around price sensitivity. Using available sales data, she was able to determine the sweet spot of pricing which would allow her to get traffic in while still making money.

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Next on her list are plans to increase weekday evening traffic through targeted offerings as she feels that there is room to grow the business by another 30 to 40 per cent.

As soon as the restaurant business starts running at peak efficiency, Rebecca plans on venturing into real estate investment.

Nauman Farooqi is a professor and head of the department of commerce in the Ron Joyce Centre for Business Studies of Mount Allison University .

This is the latest in a regular series of case studies by a rotating group of business professors from across the country. They appear every Friday on the Report on Small Business website.

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