HOLIDAY HANGOVER

In the restaurant industry, we have found most people don’t feel compelled to cook during the span from Thanksgiving to Christmas. People are out and about, shopping and getting ready for the holidays. This was great for retailers and restaurants since sales were excellent!

Getting ready for the holiday rush, retailers, and restaurants ramped up to get ready for what was to be a record year. They ramped up supplies as well as staffing. 

After the excitement of the holiday season, the holiday hangover slump is here. Credit Card bills start to pour in, spending is slashed and New Year’s resolutions are focused on eating better, spending less, and drinking less coffee especially out. With this looming, January through March becomes brutal for restaurants and retailers.

All operators know it’s coming, but every year we are frustrated when it actually hits and not as prepared as we should have been. Can we remain profitable? This is the dark side that many will never experience.

YOUR TEAM NEEDS TO EAT TOO

You hired all these people, now what?

Your people bought presents, and they are feeling what everyone else is feeling. They have bills and expenses and need to work and keep earning. But now your sales are way down. This means you have to adjust your costs FAST to make it through the next 3 months.  The next few months are always that struggle restaurant owners see. Our operations will likely bleed and deplete that cash reserve you put away and had to dip into the very first week of January. Gift cards are being used, and cash flow has taken a massive beating.

The first thing you look to cut is labor. I received multiple requests for time off right after Christmas through New Year and was never so excited when people wanted to go on vacation. I said to myself, “Great, I don’t have to feed hours to those staff members for a couple of weeks!” Imagine being relieved to NOT have staff in this economy.  

But employees will return, and the same messages start to come in, “I can work all the hours that you can give me!”

It’s a perfect storm of disaster. Sales go down, weather patterns are unpredictable, and we see some really nasty storms and travel issues in the Northeast. When this happens, BUSINESS STOPS and sales erode. Not to mention, many states’ minimum wage step-up plans are in effect with minimum wage increases as of the first of the year. So there is another percentage bump in labor with no way to offset it. Where does it come from? Directly from the bottom line!

I compiled a list of ways I support them to share in hopes that this too can bring your business some relief.

COURSE CORRECTING & MONEY IN THE BANK

I find this is the absolute best time to meet one-on-one with each member of your team. Discuss expectations, let them know what’s coming, and more importantly use this time to address and review where they are at today and where you want them to go.

I have developed for my team self-assessments for them to go through. One for operational systems and one for Key Performance Indicators that are all tied directly to their compensation plan. It’s a time to sit, talk and discuss the basics.

Go over how they feel they are doing, where you agree and where you feel there needs to be an improvement and the action plan to retrain, relearn, brain rinse and make adjustments necessary.

We then go over and address the metrics of our compensation plan and whether they are executing it or not.

You see our people get really comfortable and develop habits, some good, some bad. But it’s because we take our foot off the gas, only to get frustrated when we then feel our standards are all out of whack.

This “engagement” time is absolutely necessary, to then hit the ground running when sales begin to pick back up. I call this course correcting, getting your people back onto the course your business needs. 

This time is crucial for connecting with each one of your team members. They see that you CARE and that you have taken the time to help them get better. This directly impacts the culture in your business.

Sometimes during these conversations, the result is a mutual agreement that the relationship is no longer a fit and that is OK. I would rather come to that place mutually and plan an exit, rather than have a team member be disengaged and go through the motions. (see my article Quiet Quitting)

This training and coaching time leads directly to the retention of your best people and leveling up of your entire team. It’s hard to do, it’s uncomfortable, it takes a lot of time, but in the end, pays off dividends. This is putting money in the bank. Invest in your people now, and get a return from them when you need it most.

ADJUST YOUR SPENDING, DUH!

Scrooge shouldn’t come before Christmas, he should come after Christmas! 

This is a no-brainer. Of course, during these months, you and your team become scrooges. Watch EVERYTHING. It’s all about balancing the spending versus the income right now. If you were ever going to take a risk and push some items in your business, the time is now. This is an opportunity to teach your team to think on their feet, suggestively sell and laterally sell, moving customers to another item if you run out of what they ask for. For example, I am in the coffee, donuts, and breakfast sandwich business. I teach my team if we run out of chocolate glazed donuts, move a guest to a chocolate cruller or some chocolate donut holes, after all, they are the exact same thing. This is a skill set you would assume that most people know right? Nope, it’s up to us (leaders) to teach, repeat, preach, coach, and repeat 14 more times.

What I mean by this is, don’t be scared to run out of something and move a customer to another item if you can during these months. I work closely with my team on every purchasing and supply ordering decision. If we are light on some packaging and normally would order an extra case, we hold. While we risk pushing it and finding another solution in the event we run out of something, this change is huge for us to make the budgets we set.

We estimate the sales and budget all spending, ALL spending. Your BUDGET becomes everything!

We are in New England, and in my next life I am becoming a weather person, they get it wrong so many times and still have a job. I remember one day I had my weather app opened up, and it said it was raining. I went to the local news’s weather site and TV station, and they said it was raining. You look out the window, and it’s snowing and business literally stops. In these scenarios we understaff slightly and communicate to our team that when posting schedules in the event the weather goes our way, we would like to extend people’s hours that are willing and have the availability.

By communicating at this high level of transparency with my team. The door will swing both ways for us. People will see the state of how the day is going and offer to take off or stay depending on what’s happening. This makes the conversations so easy, helpful, and amicable for everyone.

It truly becomes a game with my leadership team, can we make the budget? Can we make the budget and increase the sales? It’s all about the budget, baby!

DON’T STOP MARKETING

I used to fall prey to this mentality every single time. The minute the sales fluctuated, I cut everything—especially marketing. But now I have learned that this is definitely not the time to take your foot off the gas.

I run a QSR restaurant, so I am going to talk about what I do. If you are a retailer, the same principles apply to marketing in your industry.

Focus on some healthy options to align with your guest’s New Year’s resolutions. I know I added some holiday cheer to my waistline this year. We added a few low-calorie options, gluten-free options, low-carb, sugar-free flavor options, and vegetable and egg white options to give people better choices. 

This is the time to add in some great offers. Ones that will reward guests for coming to you and driving past your competition. My business is coffee, donuts, bakery, and breakfast sandwiches. I run an offer for a FREE donut with any large beverage.  The customer acquisition cost is high, but if there is a time that I need it, it’s January through March!

I have partnered with other local businesses around me to do combined offers. Build our marketing lists together, inviting each other’s loyalty program customers. These other local businesses are feeling the same thing as you are and wondering what they can do. Then BAM, I walk in with a solution. Partnering on marketing can be a game changer.

TAKE A LOOK AT YOUR HOURS OF OPERATIONS

I spent a lot of time number crunching here, and man was I shocked to learn that I actually was losing money the last 2 hours of the night. So, I talked to the property owner as we are a strip plaza with some godliness on hours and started closing earlier. It did almost nothing to the sales. However, this simple move saved 35 hours a week in labor, but the bonus is it has a domino effect on other costs that are hard to exactly monetize, like utilities. Ultimately, this move made the operation easier to manage and concentrated the ability to get higher-performing employees to overlap at the right times. Now, when I run an offer and see an uptick in sales, I have the people to elevate the customer experience.

And that is what it’s all about! Customer Experience.

Listen, the holiday hangover is a REAL thing, it is not in your head.  Some small shifts and tweaks out of the box can really make a difference.  A difference between you taking a BIG dip in the bottom line or riding it out with much less impact.

For more tips, connect with us and follow us on our social channels  @hirerockstartalent 

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