Seasonal Restaurants - Preparing for the Off Season
Part One - Operations
Whether you own a seasonal clam shack on the shores of New England or are the General Manager of a ski resort in Colorado, you have experienced the challenges of a seasonal business. Many seasonal businesses only have a three to four month “busy” season, when there is more than enough business to be profitable; it is what happens in the “off” season that often determines whether or not these businesses make it until their next busy season.
It is crucial to have a plan in place to handle off-season challenges, ensuring that customers have their favorite local restaurant to come back to. It may not be possible to be profitable in the slower months, but with the correct operating procedures, you can survive the off-season’s inevitable downturn in revenue.
Here are four operating procedures to focus on:
Manage Your Cash Flow - The single most important step for survival of your seasonal business is rigorously managing your cash. This takes discipline. Calculate what your cash flow needs will be based on both your fixed and estimated variable expenses. Know what your break even point is, as sometimes a viable cash management strategy is to close the business for the slowest portion of the off season. During the busy season, set aside a certain percentage of revenue to create a reserve that will help carry you through the off-season, so as not to go deeply into debt, if at all. Get to know your banker, and establish a line of credit to tap into, as it is important to stay current with your bills.
Adjust Your Offerings – Changing your menu can impact both food and labor costs. Consider replacing some menu items with less expensive, seasonal and local ingredients. Cooking with what is locally in season is always less costly than using out-of-season imported items. Also, reducing the overall number of items on your menu and increasing product cross-utilization allows you to carry a smaller inventory (see Manage Your Cash Flow, above), thus reducing the amount of possible waste. Furthermore, less labor-intensive preparations allows you to work with less staff. An example that combines these concepts: In the winter months, a menu built around stews, casseroles and braises allows you to use less expensive cuts of meat, seasonal root vegetables and less labor.
Hire, Train and Schedule Wisely – Having a core staff from the local population can be crucial to your success; you will easily be able to supplement your staff for the busy season, and will not find yourself short-staffed when your seasonal hires leave. It is important to cross train your staff, as it will allow you to schedule fewer people during slow times, cutting down your labor costs – a server who can mix drinks saves also scheduling a bartender for a slow lunch shift. In these ways, you will always have well-trained people available who can handle a wide array of jobs in a thinly staffed environment. However, staff and schedule judiciously, as under-staffing can lead to burn out, more waste due to error from stress and distraction, and a negative guest experience.
Attract the Locals – In seasonal communities, the local population becomes the core of your customer base in the off-season. Cater to them and actively attract them to your restaurant. A good way to increase off-season sales is to offer locals discounts: deeply-discounted wedding receptions, special weekday prix fixe menus and/ or corporate meetings and events. An appropriately engineered menu will allow you to do this without severely eroding your profit margin. It is important to curry favor with the locals, because their great experiences at your restaurant will turn them into your best marketing tool, as we wrote in our blog Attracting Customers. They are likely to recommend you to other locals in the off-season, as well as the in-season visitors who may not know about you.
Maintaining a seasonal business has unique challenges beyond those faced by other restaurants and food service operations. By properly planning ahead to ride out the slower season which you know is coming, you will be able to make it through to the next busy season in good financial shape.
Don’t know where to begin? 4Q Consulting can develop customized operational guidelines to help you grow your business. Email us today for a free business consultation at www.4qconsult.com.
All original content copyright Noelle E. Ifshin, 2012-2013.
Noelle E. Ifshin,
4Q Consulting, LLC
244 5th Avenue, Suite 1430, NY, NY 10001