A restaurant’s hours of operation can be influenced by a number of factors including the type of restaurant, location, target audience, and competition.
Whether you are in the planning stage or have been opened for 20 years, you should always be looking for the best way to serve your community. And sometimes, this may mean visiting areas that have already been set in place; this includes your dining hours. Bergen Linen understands the F&B landscape and is always looking for ways to share with our industry friends.
Revisiting Operating Hours
Hours of operation can be influenced by a number of factors, including the type of restaurant, the target audience, location, competition, and more. Here are a few questions when reconsidering your hours of operation:
What are your restaurant’s peak hours and days?
During the week, you are so busy. However, you or someone on your team needs to be analyzing customer flow patterns. Understanding the general ebb and flow of your customers probably determines your staffing needs. This results in better customer service and a possible reduce in labor costs.
Do you know your operational expenses?
If you are a restaurant manager or owner, then we are not going to be sharing something that you don’t already consider. And today’s economic conditions may already have you revisiting your average revenue and operation costs already.
Operating expenses provide you the data to make informed decisions such as: menu pricing, salaries, budgeting, and overall financial management. These expenses sum up the day-to-day operation costs. They are typically classified into three main categories: fixed, variable, and semi-variable.
Fixed Costs
Fixed costs remain constant. Unfortunately, they are the expenses that do not change whether you are busy or slow.
Examples: Cost of rent/mortgage, insurance premiums, property taxes, administrative expenses, and your space’s public utilities.
Variable Costs
Variable costs do ebb and flow with your restaurant’s activity. When you are busy, you will be ordering more. And when you slow down (hopefully not!), your inventory levels reflect these changes.
Examples: Food costs, beverages inventory, active staff, linen rentals, and other supplies.
Semi-variable Costs
Semi-variable costs are actually a mix of both fixed and variable operating expenses. To simplify, a utility is considered a fixed cost because you are always going to need electricity or water so there will always be that general ‘base’ expense you expect to pay. During an increase in business, your utility usage may increase. The additional usage then makes that increased cost a variable.
Additional Examples: Appliance maintenance, exterior repairs, advertising, seasonal labor, etc..
Revisiting your hours? By regularly monitoring and analyzing your operating costs, you may seem some room for adjustments that lead to savings!
Consider a Change to Your Restaurant Operating Hours?
Don’t underestimate the benefits in adjusting weekly operating hours. This is an emerging strategic move that many restaurant managers are turning to. It helps optimize efficiency, enhancing customer service, and meeting the restaurant industry’s market demands. In fact, it is how many restaurants were able to make it through these past few years. Do you know your most popular day? Time of day?
Do Your Hours Compliment Your Menu and Demographic?
Within the food service industry, there are several restaurant types including chain restaurants, independent restaurants, etc. And the type of dining offered is a key indicator in your operation hours. When it comes to running a successful restaurant, knowing your demographic is also crucial. Understanding customer preferences and characteristics of your target audience allows you to tailor your menu items and ambiance; this ensures maximum customer satisfaction and loyalty.
Quick Service: Fast-food restaurant chains focus on busy individuals or families seeking quick and affordable meals. The fast service allows for a quick exchange of money for food. This fast exchange allows for a larger team to accommodate busy lunch and dinner crowds. Operation costs may also include a large budget for food packaging due to take-out demands. Hours can start early and end very late.
Family-Friendly: Casual independent restaurants cater to a relaxed and informal atmosphere similar to quick-service restaurant. However, these guests tend to sit and relax a bit longer. (Also, there is less take-out compared to a fast food place.) Menu items and affordable menu prices aim to attract people to visit throughout the day. Although, casual restaurants typically don’t rely on a heavy weekday morning or late night crowd.
Fine Dining: A high-end restaurant targeting upscale clientele emphasizes elegant décor, exceptional service, and a gourmet menu featuring premium ingredients and a sophisticated wine list. Many fine dining establishments are closed on a Monday or during weekday mid-afternoon hours. (Take a look at local competitors to see how they work around slow times.)
Trendy and Hip: Semi-formal dining establishments have menus that include a range of appetizers, main courses, and desserts. There also may be a selection of wines and cocktails. Semi-formal restaurants also often have a break between their lunch and dinner; this helps with reduction in operation costs.
Breakfast and Brunch: Popular among early risers and weekend brunch enthusiasts, many of these types of restaurants have limited hours (e.g. 8am – 2pm). Their breakfast menu, inventory management, and staffing then align with the customer demand.
Check Out Your Local Competitors
Keep your competitive edge by researching your competitors’ strategy. Are they also closing weekdays between 2pm – 5pm or are they benefitting from you being closed? How late are they staying open? And do they offer a special early bird special (if that fits your menu).
Learn how competitors are performing. What type of marketing efforts are they are implementing? What types of menu items are they offering? This knowledge helps you identify areas where you can improve or revisit (even if just to test). Don’t miss out on a chance to close any gap between you and the next neighborhood restaurant.
Competitors are also a great way to anticipate industry trends and market shifts. For example, if a competitor introduces catering or a trendy menu ingredient, it may be an indication that these areas hold significant revenue potential.
Don’t be afraid of change.
Research State and Local Laws
When it comes to understanding the local and state laws that apply in the New York and New Jersey area, we suggest do your research and speak to full-service restaurant experts.
There are certain laws that apply at the federal level – and then some that only apply to a local or state level. As an owner or restaurant manager, you need to be aware of all layers of legislation to ensure compliance and avoid any legal issues.
Adjusting for Seasonality and Holidays
Depending on your location, your restaurant hours may need to be revisited. For example, Greenwood Lake (New York and New Jersey sides) restaurants see an uptick in diners during the summer months. The same would go for establishments close to other tourist attractions that get busier near spring break, summer, etc.
Of course, we also have to discuss holidays. Many of the major restaurant holidays result in a change of menu offerings, decor, and hours to provide a special customer experience. Here are a few examples:
- Mother’s Day brunch
- Father’s Day night out
- New Year’s Eve party
- Christmas Day closing
- Thanksgiving catering
Analyze past sales and pushes. Re-evaluate this year’s goals as well. Were last Mother’s Day brunch sales slow? Did you properly advertise it or offer a prix menu? Perhaps, you simply need to re-examine your approach rather than consider it a non-success.
Events and holidays play a significant role in seasonal hour adjustments. Festivals, fairs, or concerts also attract large crowds, potentially creating an opportunity for businesses to generate more revenue. So capitalize on the surge in visitors.
Make the Most of the Golden Hour
From being in the restaurant industry, you are already aware of the golden hour peak. This highly lucrative period represents the optimal opportunity to maximize your revenue potential.
Typically, the golden hour peak falls during lunch and/or dinner hours. To make the most of this time, offer promotions, special menus and other incentives to attract customers. In the golden hour peak, it is especially important to make sure your operations are streamlined. Keep service efficient with a well-trained staff, clear seating, a reservation system, and easy to execute menu items.
Before you change your operation hours, there are a few more areas to review.
Employee Retention and Additional Hirings?
Can you maintain the current hourly employees or will this require additional hirings in terms of either front-of-house or back-of-house? Analyze your data to gather any definitive customer traffic patterns and other busy periods.
Will your current staff welcome a change in operating hours? Whether you plan on reducing or extending, you should speak with your team regarding their willingness.
At this time, effective communication is key! Keep your employees in the loop so they feel involved. In doing so, you are likely to have a much better response in terms of shift changes. And if not, you are not surprised by any positions that
Any risks?
Of course, closing early offers the potential risk in loss of revenue. Like any good brick-and-mortar business, operating hours generate the revenue to cover expenses. When deciding on hours, you want to make sure that you are not missing out on any potential sales or cause a disruption in daily cash flow.
Quick decisions can also cause a loss of customers’ trust or loyalty. Many restaurants rely (and appreciate) their loyal customers. The ones that your team knows by name. If considering updating hours, be sure to let customers know well in advance. Do not close early inconsistently or without any warning. This can easily lead to dissatisfaction – and bad reviews! Ugh. The worst.
Ready to Make the Change?
In today’s restaurant industry, one of the key objectives of a restaurant owner is to reduce labor costs without compromising on customer satisfaction. By having the right data, you can make a choice that works for your business location.
Customization is everything. And that is why Bergen Linen offers complimentary consultations to learn about your unique needs. We are here to help you navigate through the ups and downs to make sure you are always running smoothly. Learn more about our linen and uniform rentals today.
