How to Be #1 or #2 in Your Market

My goal is the teach restaurant owners and managers like you, to focus on Eight Basic Fundamentals that lead to a better life and financial freedom.

Today we are going to talk about market position and why 80% of your menu items might be chasing your customers away.

When I was a kid growing up in Vermont, my dad worked for GE. I am a GE kid. Because of this, I have always had my eye on the GE stock price. One of my management hero’s is Jack Welch, the former CEO of GE from 1980-2000, back when GE really kicked ass. For fun, take a look at the GE stock price history some time and you will see that it sky rocked from 1980 – 2000 when Jack was the CEO, and since Jack retired GE has been completely knocked out of the Fortune 500 for the first time since 1919, and their stock price has cratered.

During his tenure Jack focused on TWO major points of focus.

Point #1- Building a great team of managers and leaders, Jack created an evaluation process he called the 20-70-10. I did a podcast about that a few months ago, I recommend that you go back and check it out.

Point #2 was that GE must be #1 or #2 in their market. If they could not be or become #1 or #2 in any market for any product they were getting out of that business.

GE got out of the small appliance business. This was a real ballsy move because GE used to be the greatest small appliance maker, in the world, but times changed and the competition got better, so GE did the smart thing, they got out.

This is what we are going to discuss today. I have some simple points to help you understand why you should tighten your focus and become #1 or #2 in your market space.

  1. You must know who you are and what you are trying to do, you must pick a concept.

  2. You must become #1 or #2 for that concept in your market. You must look at your overall market and determine where you fit in today vs where you want to fit in tomorrow.

  3. You must have a narrow focus with boundaries. You must be your concept every day in every way.

Let’s get started…


You must know who you are and you must be able to tell your employees and customers who you are in 30 seconds or less. Your people must know who you are and what you do. Your customers must know who you are and what you can do for them.

  • Can your employees tell your customers who you are and what you are the World’s best at in 30-seconds?

  • Can your customers tell their friends who you are and what you are the World’s best at in 30-seconds or less?

Here are some simple concept ideas that you can shoot for.

Burgers, Pizza, Tacos, Ribs, Steaks, Sushi, Seafood, Italian, Mexican, or an Irish Pub.

But know this - Being the #7 Taco joint or #7 pizza place in town is a recipe for disaster and it’s killing 80% of all the restaurants in America…


Look at the Overall Market in your town, where do you fit in?

For a great way to think about this, the next time you are in the grocery store - Go to the cereal aisle. Look at all the different cereal options. Look at how they are situated, who is on the top shelf, the middle shelf and who is on the bottom shelf. Ask yourself what separates one brand of cereal from another?

It’s the same thing with your restaurant. Take a step back and look at all the restaurants in your market, where do you fit in. Which category do you fit in. Burgers, Pizza, tacos, ribs, steaks, seafood, pasta or what-ever…

LET’S STOP THE BUS… I know what about 80% of you are all thinking right now, You are thinking – I am all of those things… I have all of those things on my menu, so I am open to a larger portion of the market. I offer lots of OPTIONS… I offer everything for everyone…

I know you think you may be all of those things, but here’s the real question?

How WELL is that working for ya?

This is a BIG problem, most restaurants want to be all things to all people. I’m sorry to inform you that you cannot do that very well - for very long.

Here’s why…

This is what most chain restaurants are doing, they have a GOOD or OK version of everything on their menu so they can appeal to the masses. They have steak, chicken, fish, pork, burgers, pizza, pasta, tacos, burritos, enchiladas, dumplings, ribs, salads, wraps, and more… BUT the common theme between every dish on the menu is OK-ness.

When the server asks - How’s your dinner ma’am… she replies, It’s OK…

The server thinks - great, - let me get away from her before she starts to complain.

The way the big chain restaurants win is because they have a winning system, they know how to execute and operate on a large scale for purchasing and marketing.

The way to beat the chain restaurants is to have a great simple concept that fits your market, that you can become #1 at, and then build a good system that works for you, your people and your customers.

Look around the country, every town has a place where all the locals go, every town has THE place that is world famous for ONE thing. When they have visitors from out of town they bring them - there… To the one of a kind local place, that kick ass at one or maybe two things… That is what you really want to be – isn’t it?

The local place that is world famous – for something awesome like The Food Guru’s World Famous Chicken Lips.

This is why I whole heartedly recommend that you narrow your focus and get strategic. Look at your sales report, what are you really selling?

What would happen if you cut your menu to only the top 20% of your food and bar menu items? Really, I'm serious, just run the report and look at the facts. Then, write down the top 20% of what you sell. Then get rid of all the rest of the crap that is clogging your pipe.

Think about it like this. The best items on your menu (the top 20%) are delighting your customers and creating repeat business. BUT - 80% of your menu items are just OK and they are NOT creating repeat business. Another way to say that is – 80% of your menu items are chasing your customers away… Huh, What?

That’s right folks in your quest to follow the heard and be like everybody else in the market place, 80% of everything that you sell is not as good as the top 20% of the things that you sell and are therefore – most of your menu items may be chasing your customers away.

80% of your menu items are chasing your customers away…

Here’s a better way to say that. Decide on a concept and keep the items that support the story that you want to tell… SIMPLE!

Marketing & Hotel Clerks:

This story is a little complicated for many reasons but it's a fun exercise. Think about your restaurant from the point of view of an outsider. Imagine you just checked into a hotel, and you wanted to go out and eat, what would you do. Most people would ask the front desk clerk for a recommendation.

You would ask, where do you recommend for dinner? The smart clerks would ask you a smart question, what TYPE of restaurant are you looking for?

STOP: I’m not telling you that they would be making a good recommendation, I’m telling you that they would be giving you A recommendation, from THEIR point of view.

I know a lot about this subject for a few reasons.

  1. I worked in resort hotels for 20 years.

  2. I live above a hotel and we have a revolving door of front desk people, some are really great, some not are so great…

Quick tip… make friends with all the hotel front desk managers in your town, I’ll cover this tactic in a future podcast, but for now let’s get back to the front desk.

The front desk clerk will usually ask - what type of restaurant are you looking for Sir?

Most people are looking for Main categories, such as steak, seafood, Italian, tacos, burgers, sushi, etc. Do you get the point?

When you are the #1 restaurant in your category – people will naturally recommend you when people ask them the question. Most front desk people recommend THREE places. So- You better make sure your restaurant is on their short list. This is why being the #7 Taco joint in town is a recipe for disaster.


You need a REAL Solid Concept with boundaries to help you stay focused. You need boundaries, boundaries help you stay focused in your area of excellence. This will help you build a winning brand.

If your goal is to serve the best sushi in town, putting a burger on the menu would be an obviously bad idea. But, adding sushi to an already oversized average menu might seem like a good idea. It comes down to focus and context.

When you know what your concept is – you can start to build a brand. Most restaurant owners hate the idea of building a BRAND because, it seems TOO much like a chain restaurant or too fast food like or like too much work. Most independent owners think everybody already knows who they are. And this is another one of the main reasons why 80% of all restaurants go out of business in the first five years.

The truth is that the market has no idea who and what you are. A few people sure, but the entire market, no way, stop dreaming. Most restaurants fail because they don’t know who they are or what they stand for. And even worse, their people have no idea who THEY are and what they are trying to accomplish… AND even worse their customers don’t have a clue of what to expect when they walk in the door.

Here's one for ya: The difference between and entrepreneur and a proprietor is: The Proprietor is focused on making money by getting the most out of every customers wallet and beating the guy next door…

The Entrepreneur is focused on building a brand… that will stand the test of time.

Think about McDonalds & Starbucks - they both have a uniform way of doing everything and the market knows exactly what to expect.

In & Out Burger - The biggest local burger chain in America, They have raving fans. People actually wear In & Out T-Shirts as a sign of belonging – but nobody wears a McDonalds T-Shirt.

Think about Subway – tons of stores… then think Jimmy Johns = Same concept, but more simple and more fun. I like Jimmy Johns, I get the number 9 every time and it’s Freaky Fast…

Think about Tacos – I have local favorite taco joint, but I would never go to Taco Bell - Cheap Garbage…

Let’s look at another industry, Hardware vs Home improvement.

The local hardware store owners and employees are all freelancers - doing their own thing, no consistent message or branding.

Then, we have LOWES. Lowe’s not in the hardware business, they are in the home improvement business – Big difference. Lowes people all wear a Blue Vest and have been trained to walk and talk in the same direction with the same language. I hope you get the idea, let’s get back to Restauranting…

Let’s imagine that you want to be the number one taco joint in your market. You must determine what type of taco joint you want to be. You can be anything from a street cart to a sit down restaurant with margaritas and lots for fun.

My favorite taco restaurant is Bar Taco, it’s in the Hyde Park Section of Tampa. These people know exactly who they are and exactly what they are trying to accomplish. They serve great tacos on shiny clean quarter sheet pans and they have fabulous margaritas and other libations that fit the concept beautifully. The décor and music is beachy and all their people wear blue aprons and blue gingham shirts. Great place… Bar Taco is a small growing chain, I think the only thing that can hurt them is complacency or worse - an IPO.


Let’s wrap this baby up… Here are the key points we discussed.

  1. You must know who you are and what you are trying to do, you must pick a concept.

  2. You must become #1 or #2 in your market, or you will be invisible. You must look at your overall market and determine where you fit in today vs where you want to fit in.

  3. You need a narrow focus with boundaries, and you must stick to your concept every day in every way. For the next ten or twenty years… ready go…


Hey, before you go…


First off, love the podcast. It's good to know everyone is going through the same kinds of problems as I am. I got your book a few weeks ago and I just finished the part about increasing prices. You talk about two different 10% price increases. I love the idea of this, but in my area, people are pretty price-sensitive, so I'm afraid if I increase my prices, people might stop coming in and go somewhere else--even my long-term customers. Would love to get your thoughts on this.

Rob, thanks for the question, I love it… This is a really good question because it dove tails into today’s episode and is one of the scariest things to most restaurant owners.

In my book Restauranting 101, I show you how the get TWO 10% sales increases in the next 90-days. The first part is to raise your prices by 10% and the second is by improving your marketing and in store sales system. Rob is concerned about raising prices, as I am sure most of you are.

Before we go there, I want to talk about who and why people are price resistant.

First, because of the tech industry we assume that prices should be going down, getting lower and lower - Like the dropping price of a VCR or DVD player or a TV. This may be true, but have you seen the price of an iphone or an iwatch lately, these are going up, up, up, so the point is moot.

Second, look at a service like Mediacom, dish TV or Netflix, once again, the price is going up not down.

Now look at our industry, the restaurant industry, everything is getting more expensive, groceries, insurance, rent, and especially payroll. So here’s my answer.

If you are already over-priced, you just may kill your business by raising prices.

Here are a couple examples.

If you are the #7 taco joint in your area, and the market price is $3 for a taco, and you arise your price to $4, this may make your life worse.

On the other hand, let’s imagine that you are the #5 pizza joint in your market and the average price for a pizza is between $10 and $20. If you are charging $11, and raise your price to $12 or even $13, nobody will notice or even care.

The second part of the price equation is the level of quality, service or experience that you offer.

In all the world we have commodities, goods, services and experiences.

A commodity is flour, sugar, corn, beans and wheat. The prices are set by the market.

Then, we have goods, such as a Tombstone pizza or a DiGiorno self-rising pizza. The price is higher but pretty much set by the market. People will go to the store and compare prices. Most people will pick a cheaper one because, after all it’s just a frozen pizza in a grocery store.

Then we have a service. Domino’s provides a service, they deliver a pizza piping hot to your door. They have lots of national competitors like Papa John and Pizza Hut.

Then we have an experience. Going to Wolf Gang Puck’s Spago in Beverly Hills is a World Class Experience, complete with excellent service and even movie stars… We are willing to pay what-ever it costs for the pizza because of the overall experience. We are not just getting a pizza… We are getting a World Class Experience.

What I teach my people is to move your restaurant from a commodity to a World Class experience. When you do that you can charge whatever you want because you are in a world of your own.

The secret is to create a special and memorable world class dining experience.

This can happen anywhere from a taco truck - to a five star ding experience at the Ritz in Paris. All it takes is imagination, hard work and persistence. The secret to success in our business is to add VALUE to the experience of dining at your place.

Please remember what Aldo Gucci said - Value is remembered long after the price is forgotten…


My Name is Peter Harman, I am the Food Guru. My goal is to start a restaurant revolution where every restaurant owner in America has the information they need to create financial freedom and live the life of their dreams.

If you have any questions or comments or an idea for a future podcast, please send me an email at foodguru@foodguru.comI would love to hear from you.

Thanks for listening

Now I want you to get out there and – Start a Revolution…!

Post Production:

Hey there if you are still reading I have a few more tid-bits that you may be interested in.

As you have probably deduced by now, I am a chef, restaurant owner and restaurant coach.

I have written a book called Restauranting 101, it focuses on Eight Basic Fundamentals that will propel your restaurant into the top 5% of all restaurants. Restauranting 101 has the power to change your life and it's available on Amazon today. I encourage you to read it, and if you really like it, buy a few extra copies for your key people. These eight basic fundamentals have helped me and my teams accomplish amazing results,

I’m sure it will help you and your people too.

I am also a restaurant coach, I want to help you build a better restaurant. I really want to help you get strategic and build a simple system that gets you where you want to go.

This is not a big webinar on skype, this is me and you – one on one – talking about you and your restaurant. AND - I don’t brag about my clients, this is a private session… I’m not going to talk about you to anybody but you.

I want to help you, the independent restaurant owner who wants to improve and just needs someone who understands their issues and can help them sort things out. If you are struggling today, I implore you to come to and sign up for a free 20 minute consultation. What have you got to lose?

I’m not going to yell at you. I’m not going to laugh at you. I know your pain. I’m going to ask you a few questions and listen to what you have to say. My goal is really simple, I want to help you WIN in the restaurant business. I want to help you to build the restaurant of your dreams. I want to help you build the life of your dreams.

Thanks again for listening, I look forward to hearing from you.

When the student is ready… The food guru will appear..!

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