If you have thought about closing your restaurant early on slow days, cutting back hours or even closing for an entire day, then I want to share some facts about why you should keep your restaurant open…in fact, I think you should add more hours!
To learn more please either watch the video above, read the transcript or listen to the podcast below.
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Hey everybody, my name’s Ryan Gromfin and I’m an author, speaker, chef, and restaurateur. I’m also the founder of www.TheRestaurantBoss.com and www.RestuarantProfitandPerformance.com. Today we’re going to answer one of the questions that a lot of my clients ask me.
Should you close your restaurant early on slow days
“Should I close my restaurant early?”
“Should I close it on slow days?”
“Should I keep it open?”
“What should I do? The labor is killing me, we’re not doing any revenue on those days or hours…”
The lesson I learned from the CEO of Kinko’s
That used to be a tough question for me to answer, until I figured it out. The only way that I could really answer this for you is to tell you a quick story.
About six months ago I had the privilege to see a gentleman speak live. His name was Paul Orfalea and he is the founder of Kinko’s. We know it today as FedEx Kinko’s, depending on where you are in the world. If you don’t know, Kinko’s is a huge photocopy and office supply store – thousands of units across the world. Anyways, Paul founded that a long time ago back when he was in college in Santa Barbara. And to hear him speak live was incredible, but there was one part that really stood out to me.
He told a story about how he wanted to transition his stores to 24 hours a day…but none of his executives would go along with it. They didn’t agree with him, they kept showing him the data and statistics that you already know… midnight to 6 a.m. they were doing no business at all. Virtually no business at all compared to rest the day. If anything, they were trying to get him to cut back the hours, but he kept fighting this. However, he didn’t really have the data to back his argument.
Then one day he was traveling and was meeting with some other local business owners. There happened to be a restaurateur—a gentleman who owned like six or eight diners in the area. This gentleman started telling the story about how… when he purchased this group of diners they were 24 hours. He saw that between midnight and 6 a.m. they only did like maybe $100 in sales. And so when he opened up a new store, it was not 24 hours. Sales were ok… He opened up another store it wasn’t 24 hours a day and sales were just OK. He couldn’t figure out why his new stores were not doing as well as his old stores that were 24 hours a day.
So he thought he would do this experiment where he took one of his new stores that wasn’t 24 hours and he opened it up for 24 hours and within a month or so sales doubled at that store. But his midnight to 6 a.m. sales were still really low, only about $100, but it worked!
It brought the whole store sales up. So he did it on his other unit and it worked again!
He couldn’t quite figure this out, so he shared the story with Paul and some of the other business people to get their take on it. And Paul said this light bulb went off in his head. He realized, if it works for restaurants, it’s going to work for his copy shops. He went back and told executives in the company the story. They agreed to let him do a test. So, he tested a couple of stores that were not 24 hours. Opened them up 24 hours… within a couple months, sales doubled. Did it again and again and again every time that that happened. That same result of sales nearly doubling. Even though they’re midnight to 6 a.m. sales were still really small.
And so after Paul gave this speech, I had a chance to pull him aside and asked a couple of question. “Did you ever get any data or did you ever figure out why that is…?” And he said, whenever they would talk to store patrons or do surveys. The patrons loved the fact that they could count on Kinko’s to always be open. Because don’t forget. You’re going to a Kinko’s because you’re late on a project; you forgot to do something; a lot of times it’s a rush job… you know, you have a project that’s due. And so they just love that every time they drove by, they saw the lights on. Even though they didn’t need anything, they saw the lights were on. Early in the morning late and at night, it didn’t matter. It gave them the confidence that if they needed something, Kinko’s would be there for them.
And so unfortunately, I’ve been on both sides of this argument myself. When were operating a high-end wine market & bistro, our hours were a little sporadic. We were closed on Mondays; we would close sometimes for private events; we would close early some days if it was slow. We tested all this out. And sales were just flat—they weren’t going anywhere. We finally drew a line in the sand and committed to staying open. And then what ended up happening was all of our other period sales started growing. It’s because people would be walking by the restaurant and they would see that we were open.
When you start cutting hours back, when you start closing on certain days early, it scares people. It gives them the impression that you’re struggling? It also takes away some confidence from them that if they come by restaurant you might not be open. So then they make the decision to go to their tried and true. The restaurant that they know will be open.
Should I Close My Restaurant or Keep it Open?
So generally speaking, my suggestion to you is do not cut back your hours.
[bctt tweet=”Do not close on those slow days, keep it open and add more hours! ” username=”ryangromfin”]
Let the community know you’re there. Use the slow opportunities to take advantage of some work that needs to get done in your restaurant. But more importantly, to take advantage of the slow days or the slow periods you can run some really cool specials.
Don’t coupon. That’s really important. I’m not a huge fan of couponing, and there’s only a few times that I do like couponing? But I’m more about specialty things. Things that they can’t get any other time.
So if Mondays are really slow for you. Offer a product or do a theme night on that Monday or on every Monday that you don’t do any other night.
How do I put butts in seats on my new extended hours?
There’s a restaurant here in my town—a really busy high-end expensive steakhouse, that was really slow on Mondays. They decided to take all of their meat trimmings from the weekend or from the week before. Grind it up and turn it into an awesome homemade hamburger that they only serve on Mondays. The only time you can get hamburgers is on Monday. Now Monday is their busiest day. If you don’t get there by like 4 or 4:30 they’re gonna sell out of the burger completely.
I have a client who owns a sushi restaurant and same thing. Mondays were really slow for him, so we started this really cool in Asian Sriracha fried chicken dinner that you could only get on Mondays? Now Mondays is one of his busiest days…
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