10 Steps to Make the Most of Your Restaurant’s Seasonality

10 STEPS to Make the TABLE OF CONTENTS Most of Your PREPARING FOR THE SEASON: Restaurant’s TRAINING AND MARKETING Seasonality Find and train candidates early 1 Secure staff ahead of your busy season and invest in training to smooth READYING FOR CHANGE transitional periods and reduce hiccups. AND SUCCEEDING IN THE Create a marketing cadence OFF-SEASON 2 Your marketing strategy should cater to the seasons so you can see more guests Help your staff wear multiple hats dining at your restaurant. 7 Collaborate with your team for them to take on additional duties relevant to each season. MAKING THE MOST OF Embrace credit lines YOUR HIGH SEASON 8 Borrowing money can be daunting, but it doesn’t have to be. With the right lender, Create blended teams you’ll be able to get the funding you 3 Pair experienced workers with new need, whenever you need it. workers to get questions answered 9 Engage with your regulars quickly and reduce pressure on Your local patrons keep you in business. management. Make sure to acknowledge and reward Emphasize key financials them for dining in your restaurant. 4 While it’s important to focus on guests, Celebrate now to help recruiting later inventory and equipment, your financials 10 Show your staff your appreciation for must be your biggest priority. Operating their hard work in helping you get costs need to be paid to keep your through the busy seasons. restaurant running. 5 Leverage technology to optimize the customer experience Both diners and restaurateurs agree that technology improves the dining ONTENTS experience and table turns. 6 Keep your eyes on the prize Remember why your guests are there: to ABLE OF C eat. Focus on high quality, safely made T food for your patrons. 2

INTRODUCTION Like with most industries, restaurants see occasional peaks and lulls throughout the year. Depending on the season, your restaurant might need to hire extra staff, invest in menu changes or get financing to cover a revenue decline. For example, the summer holidays usually see increases in diners, while the winter holidays are more quiet as families opt to cook at home. No matter where you are in your year, these tips can guide you to meet each season with strategies to thrive. $7991 48%2 BILLION enjoy using food total annual sales in the delivery services restaurant industry 5% 1 78%1 Increase in total find restaurants based TION sales in 2016 on recommendations from friends. INTRODUC 1

1 2 3 4 5 6 7 8 9 10 TABLE OF CONTENTS 2 READYING FOR CHANGE AND SUCCEEDING IN THE OFF-SEASON Help your staff wear multiple hats Collaborate with your team for them to take on additional duties relevant to each season. Embrace credit lines Borrowing money can be daunting, but it doesn’t have to be. With the right lender, you’ll be able to get the funding you need, whenever you need it. Engage with your regulars Your local patrons keep you in business. Make sure to acknowledge and reward them for dining in your restaurant. Celebrate now to help recruiting later Show your staff your appreciation for their hard work in helping you get through the busy seasons. to Make the Most of Your Restaurant’s Seasonality 10 STEPS TABLE OF CONTENTS PREPARING FOR THE SEASON: TRAINING AND MARKETING Find and train candidates early Secure staff ahead of your busy season and invest in training to smooth transitional periods and reduce hiccups. Create a marketing cadence Your marketing strategy should cater to the seasons so you can see more guests dining at your restaurant. MAKING THE MOST OF YOUR HIGH SEASON Create blended teams Pair experienced workers with new workers to get questions answered quickly and reduce pressure on management. Emphasize key financials While it’s important to focus on guests, inventory and equipment, your financials must be your biggest priority. Operating costs need to be paid to keep your restaurant running. Leverage technology to optimize the customer experience Both diners and restaurateurs agree that technology improves the dining experience and table turns. Keep your eyes on the prize Remember why your guests are there: to eat. Focus on high quality, safely made food for your patrons.

1 Find and Train Candidates Early Shifts in demand for extra staff means your restaurant should EMPLOYEE TURNOVER RATE be looking for new employees roughly three to four months before the start of your busiest season. While, this might seem The costs to advertise for positions early, the extra time will allow you to better train your new hires and train new employees should and see if they can handle the high flux of traffic and fit in with not be disregarded. Calculate your your businesses. It’s important to train your entire staff at the restaurant’s employee turnover rate same time, across multiple sessions, to save time and money to know where you stand to see on training costs. where investments in training and employee retention can save you dollars. Calculate your Employee Turnover Rate in three steps: STEP ONE (Starting Number of Employees + Ending Number of Employees) / 2 = Average Number of Employees STEP TWO Lost Employees / Average Number of Employees = Employee Turnover STEP THREE In the summer of 2017, Employee Turnover x 100 there were 490K seasonal = Employee Turnover Rate restaurant jobs1 Putting the example to life, let’s say you want to calculate your turnover rate per month. At the beginning of AND MARKETING There are many ways to source candidates, including local September, you had 30 employees, ads, newspapers, job boards or even word of mouth. Toast but by the end of September, offers a Restaurant Hiring Kit including a job posting template, you’re down to 25. Your employee interview questionnaire and offer letter template for those who turnover rate would be 0.18, or TRAINING might want more help with conducting the search. 18%. Here’s why: You should also consider the cost – of time and money – it takes STEP ONE to hire new employees, especially if they leave your business (30 + 25) / 2 = 27.5 THE SEASON: quickly. Did you know that the average cost per hire in the STEP TWO hospitality industry comes in at just over $1,000? By measuring 5 / 27.5 = .18 your employee turnover rate, you’ll see just how much it costs STEP THREE you to refill positions and understand where investments in .18 * 100 = 18% ARING FOR training and employee retention can save you dollars. PREP 3 kabbage.com/restaurants

The average Per $8/hour cost per new hire employee, is a little more turnover costs than $1,0002 are $9,4453 FACTS & FIGURES AND MARKETING 41% of There are TRAINING hiring 13.1 million managers restaurant estimate employees THE SEASON: the cost of a bad in the US; 980K hire to be in the restaurants employ thousands4 1-in-10 Americans5 ARING FOR PREP 4 kabbage.com/restaurants

2 Create a Marketing Cadence Social media is a great place to ramp up your high-season THE SCOOP marketing strategy. On Instagram, you can post enticing photos of your 15% find seasonal menu items and encourage customers to tag restaurants you in their posts. through online articles1 13% through apps like Yelp or OpenTable1 Through Facebook, potential customers can view your 92% of consumers hours, location and reviews while posting about their read online reviews2 experiences to encourage more guests to dine in your restaurant. Twitter can help you engage in conversations with local 43% of consumers consumers, including changes they’d like to see. Pinterest offers boards to show consumers inspiration for feel it’s very future menus. important for AND MARKETING LinkedIn can show potential employees your restaurants job opportunities. to offer new, seasonal items3 TRAINING Each social channel offers a different audience for you to reach, whether organically or through paid posts. You can also run contests to encourage trial, repeat and engagement, which can sometimes be overlooked from an organic standpoint. Contests or giveaways can expand your user reach with little financial THE SEASON: investment. Prizes can be as simple as gift cards to discounts to fully paid meals. Ask your followers to like, share, comment and/ or repost/retweet/regram/repin to enter to win. Once they share the posts, you’ll gain more exposure to their followers, who ARING FOR might not be following you. PREP 5 kabbage.com/restaurants

3 Create Blended Teams Blending seasoned and newer team members will help THE SCOOP newcomers get in the groove of things even faster. Even if you’ve trained them efficiently and effectively, there are bound to be some bumps in the road as new hires start. Mix 46% of restaurateurs newcomers and veteran employees in the same shifts to ensure say retaining staff is if something goes amiss, the problem can be solved quickly. their #1 challenge1 17% of time is spent managing poor employees2 Veteran employees can also teach newcomers their own 2016 saw a 3.5% tricks for running the house more smoothly. For example, if a increase in hiring new hostess forgets to evenly distribute customers to certain in the first half of sections, a veteran employee can help remind her to do so. For each position, make a list of what needs to be done and hand it the year 3 out to the staff member in charge that day. To ensure all tasks are accomplished, create checklists for each position. Simply make a list of what needs to be done and hand 28,000 employees it out to the staff member in charge that day. For example, a managing opening checklist, could include: working part-time Example Checklist for both November and December 20164 Survey building for trash, debris, glass, etc. Check coolers to ensure they’re in working order. Check air conditioning and heating. OUR HIGH SEASON Check reservation book for any large parties or functions. Y Check register and run a cash-out report to ensure daily OF readings are set at zero. T Check register tape in kitchen, bar, and check printers. Check that all lights are functioning. THE MOS Check all tables and chairs are in proper place. Check in with chef on duty. Check with staff to ensure all equipment is working. MAKING Check to see if morning shift workers are clocked in. 6 kabbage.com/restaurants

4 Emphasize Key Financials The busy season spreads your focus in various areas from THE SCOOP serving more customers to driving more revenue. However, it’s important to remember to keep your financials at the forefront of your focus and efforts. After all, you have to pay your Likelihood of vendors, taxes, utilities and other operational costs to keep selling to existing your restaurant going. customers is 50% higher than selling to a new one1 Acquiring a new customer is 6 to 7 times more expensive Let’s face it: Sometimes businesses need extra capital, than keeping an especially during seasonal highs and lows. This is where small existing one2 business loans can help. Unlike some financing sources, lines of credit help you make smaller purchases with shorter term limits. Lines of credit can range from six months to two years, whereas large, traditional loans can span for decades. 61% decline in No matter what your goals are, you should ensure your traffic during the financials are front and center of your focus and that they’re in winter holidays3 a healthy place. Equipment Loans Lines of Credit Replace existing Smooth cash flow equipment fluctuations Repair damaged Hire seasonal workers equipment Cover operating OUR HIGH SEASON Purchase new expenses during Y equipment seasonal lulls OF Lease equipment Meet short-term needs T Invest in marketing Restaurant Loans Train new staff THE MOS Purchase or repair Redesigning menus major appliances Stock up on MAKING inventory Remodel your space 7 kabbage.com/restaurants

5 Leverage Technology to Optimize the Customer Expereience THE SCOOP Technology that serves your customers should be the heart 95% of diners and of your small business. You might wonder how technology can support your restaurant beyond just your POS system, restaurateurs say technology increases the speed of your table turns while technology improves also capturing the attention of online consumers (GrubHub, UberEats, Delivery.com, etc.). a restaurant’s efficiency 2 81% of diners say they’ve ordered online from a restaurant in the last year 2 83% of adults use smartphones or tablets to look up directions, locations 79% of diners and hours of a restaurant1 say technology improves their guest experience1 A customer-relationship management (CRM) system can collect data to measure your performance indicators, which can affect your financials. With a CRM system, you can more easily identify customer information for insights into marketing 37% of restaurant and promotional campaigns. If you haven’t updated your restaurant’s technological equipment, consider doing so and owners say OUR HIGH SEASON soon. Y technology is an OF T important source for customer THE MOS ordering3 MAKING 8 kabbage.com/restaurants

6 Keep Your Eyes on the Prize While it’s important to focus on expanding your restaurant THE SCOOP through marketing, technological updates or staff hires, you must remember to focus on why customers are there in the first place: your food. Surveys show the most important dining experience is delicious food at 60%2 72% of consumers say food that provides flavors they can’t make at home2 Healthier options have been, and will continue, to trend. Three out of four Americans say they’re more likely to pick a restaurant that offers healthy entrees. Looking into the future, local sourcing, fresh produce and authentic items (for Bad reviews have example, a Greek restaurant being run by a Greek person) twice the amount will continue to trend until 2020. of reach as good reviews3 Trending Healthy Items1 Jackfruit Vegetable chips Cauliflower rice Seaweed 70% of Americans Bean pasta Sugar alternatives Fermented foods Vegan food say they’re more Power bowls Grain bowls likely to visit a OUR HIGH SEASON Purple foods Y restaurant that OF T offers locally sourced food2 THE MOS MAKING 9 kabbage.com/restaurants

7 Help Your Staff Wear Multiple Hats While the new hires are breaking in, give your seasoned THE SCOOP workers more responsibilities. Find out their talents and interests and have them help with small maintenance projects, run the hostess stand or even manage the books. To 75% of employers successfully have staff perform various tasks, ensure the goals rate teamwork and are clearly communicated, develop an accountability system and structure your restaurant to meet its demands. collaboration as very important2 39% of employees feel there is not enough collaboration2 Your staff helping with various tasks can ease your workload 51% of the and can offer you new perspectives. It can also show if certain employees might be better in different roles or grow their workforce isn’t careers in their roles. Collaborate with your team to see what 3 SEASON task they might thrive in. engaged - THE OFF Skill Checklist1 To ensure employees can handle extra responsibilities, make sure they: CEEDING IN Have mastered their current position. Aren’t afraid to take initiative. Are accountable. AND SUC Lift up others. Have a healthy work/life balance. YING FOR CHANGE READ 10 kabbage.com/restaurants

8 Embrace Credit Lines People sometimes shy away from borrowing money because THE SCOOP they worry about high interest rates, payment periods or even defaulting on the loans. However, you shouldn’t let hesitation stop you from starting a partnership with a lender who wants to see you succeed. Full-service restaurants1 Percentage of revenue spent on: 33% Salaries 32% Food and drink 6% Restaurant occupancy costs 29% Other expenses Most banks don’t offer short-term loans for small businesses. They typically lend out larger amounts of funds (six-figures) and repayment begins almost immediately. However, lines of credit can fill smaller cash-flow needs (e.g., inventory SEASON purchases, equipment leases, etc.). The biggest benefit - of a line of credit is that interest rates are only charged on what you borrow, not your credit limit. You also don’t have THE OFF to start making payments until you take out the funds. So, if Limited-service restaurants1 you’re approved and don’t need the funds right away, you’re covered. Percentage of revenue spent on: 29% Salaries For example, let’s say you’re approved to take out $20,000, but 32% Food and drink CEEDING IN you only take out $2,000. You’re paying back the $2,000 plus 8% Restaurant occupancy costs interest on the $2,000. You also want to wait until your peak 31% Other expenses season to take out the funds. That means you don’t have to pay AND SUC anything back until that peak season. YING FOR CHANGE READ 11 kabbage.com/restaurants

9 Engage with Your Regulars Tourists can be great for your restaurant, but it’s local patrons THE SCOOP who will keep you in business. While you should market to tourists, your larger focus needs to be your local customers. Engagement can be as simple as making emotional It can cost up to connections with your customers. Remember their names and, 10x as much trying if you can, their birthdays. You can also hold contests on social media. By sharing photos of their meals and using a certain to attain new hashtag, customers can be eligible for a free meal (or two!). diners vs focusing on existing ones2 26% of Americans plan to give restaurant gift cards as holiday gifts3 59% of Americans SEASON Loyal customers are worth say they’d like to - 10x as much as their first receive a restaurant THE OFF purchase over their lifetime of gift card as a doing business with you1 stocking gift3 CEEDING IN Another great way to keep your neighbors dining at your restaurant is to create a loyalty program, change menus 87% of consumers seasonally and to offer items that are dietary-restriction want loyalty AND SUC friendly. As a small business owner, it’s also important to give back to your local community. This can be done by organizing programs1 or participating in local events, providing gift certificates to local honor students or locally sourcing produce to support your local economy. YING FOR CHANGE READ 12 kabbage.com/restaurants

10 Celebrate Now to Help Recruiting Later When things calm down, you’ll want to take it easy and relax. THE SCOOP However, make sure you show appreciation for your staff for helping you get through the season. Throw a staff-only party or seasonal potluck. You can also plan a company outing 58% of workers want to a brewery or bowling alley. If you have enough revenue, more recognition1 you could also get them small gifts, thanking them for their hard work. Your staff will appreciate that their hard work was recognized and will be more productive. 69% of employees would work harder if they were more appreciated1 41% of businesses that offer peer-to- Restaurant turnover rate is a whopping 73 percent, with the peer recognition average costs of an employee turnover being around $6,000. To avoid this high percentage, invest in your restaurant’s see increases culture. You want your employees to enjoy working at your in customer SEASON restaurant because they’ll be more productive and efficient. 1 - They’ll also tell others how much they like working with you satisfaction and what exactly they like about it, which is great word-of- THE OFF mouth marketing for future hires. Not sure where to start? Here are three employee appreciation ideas per season. 31% lower turnover Summer Winter for businesses that CEEDING IN Fourth of July outing End-of-year bonuses improve employee Flexible vacation hours Holiday party engagement1 AND SUC Sundae bar Ice-rink outing Fall Spring Bring in baked goods Staff outing to city for staff gardens Thanksgiving potluck Spring fever party YING FOR CHANGE Run next year’s Friendly competitions projections to for each section READ research benefits (winner gets gift options cards at end of week) 13 kabbage.com/restaurants

BONUS 11 Don’t Forget to Take Care of Yourself It’s also important to remember that you should also take THE SCOOP care of yourself. Studies show that taking time off is linked to increased happiness. Those who take vacation show their overall mood and outlook at being 94 percent positive 86% of small compared to those who don’t plan vacations, whose overall business owners mood and outlook reaches 89 percent. work on weekends1 It can be daunting to leave your small businesses in the hands of someone else, but unplugging and unwinding – even for a day or two – can help you relieve stress and better manage your business. 60% of small business owners say they take only one vacation day per year1 33% of small business owners SEASON work at least three - of the six major US Conclusion holidays1 THE OFF It’s important to take as much advantage of your busy season(s) as you can while keeping an eye on your seasonal lulls. By planning ahead, you can realize extra revenue when foot traffic CEEDING IN increases and minimize expenses when it slows. Kabbage is here to provide extra support to ensure you’re reaching your potential. Kabbage provides small business lines AND SUC of credit of up to $150,000 that can help you more adequately cover hiring extra staff, operating expenses, cash flow lulls and more. With Kabbage, you’ll have the partnership you need, when you need it. YING FOR CHANGE www.kabbage.com READ 14 kabbage.com/restaurants

Data Sources Introduction 5. Leverage Technology to Optimize 1. https://pos.toasttab.com/blog/restaurant-management- the Customer Expereience statistics 1. https://pos.toasttab.com/blog/restaurant-management- 2. https://www.statista.com/topics/1986/food-delivery- statistics industry-in-the-us/ 2. https://pos.toasttab.com/restaurant-management/ 1. Find And Train Candidates Early restaurant-success-industry-report 3. http://www.restaurant.org/Restaurant/media/ 1. http://www.restaurant.org/News-Research/News/ Restaurant/SiteImages/News%20and%20Research/ Restaurants-projected-to-add-490000-seasonal-jobs Tech%20Report%202016/LeadingEdgeTomorrows.jpg 2. https://recruiterbox.com/blog/the-cost-of-hiring-new- 6. Keep Your Eyes on the Prize employees-infographic/ 3. http://smallbusiness.chron.com/average-cost-train- 1. https://www.consumerreports.org/diet-nutrition/ new-employee-44072.html healthiest-food-trends-for-2017/ and http://www. eatingwell.com/article/289735/top-10-healthy-food- 4. https://www.shrm.org/resourcesandtools/hr-topics/ trends-for-2017/ talent-acquisition/pages/morale-productivity-bad-hires. 2. https://pos.toasttab.com/blog/restaurant-management- aspx statistics 5. http://www.restaurant.org/News-Research/News/NRA- 3. https://www.helpscout.net/75-customer-service-facts- expert-testifies-on-importance-of-tourism quotes-statistics/ 2. Create a Marketing Cadence 7. Help Your Staff Wear Multiple Hats 1. https://www.retailmenot.com/corp/static/8643c0/ 1. http://carrieluxem.com/5-ways-employees-can-get- filer_public/cc/6d/cc6dbdb5-4df5-46c5-a018- noticed-while-adding-infinite-company-value/ 30b8d423e038/rmn-wp-food-dining-web-nolast-2.pdf 2. https://www.vendasta.com/blog/50-stats-you-need-to- 2. http://blog.clearcompany.com/7-workplace- know-about-online-reviews collaboration-statistics-that-will-have-you-knocking- down-cubicles 3. https://pos.toasttab.com/blog/restaurant-specials- 3. https://blog.accessperks.com/employee-engagement- ideas-discounts-and-promotions loyalty-statistics-the-ultimate-collection 3. Create Blended Teams 8. Embrace Credit Lines 1. https://pos.toasttab.com/blog/restaurant-management- 1. http://smallbusiness.chron.com/average-profit-margin- statistics restaurant-13477.html) 2. https://www.shrm.org/ResourcesAndTools/hr-topics/ talent-acquisition/Pages/Morale-Productivity-Bad-Hires. 9. Engage with Your Regulars aspx 3. https://tdn2k.com/snapshot/2016-12/ 1. https://www.kabbage.com/blog/why-your-business- should-have-a-loyalty-program 4. https://www.bls.gov/news.release/archives/ 2. https://www.linkedin.com/pulse/what-cost-customer- empsit_01062017.pdf and https://www.bls.gov/news. acquisition-vs-retention-ian-kingwill/ release/archives/empsit_12022016.pdf 3. http://www.restaurant.org/Pressroom/Press-Releases/ 4. Emphasize Key Financials National-Restaurant-Association-Research-Shows-Res 1. https://www.forbes.com/sites/ 10. Celebrate Now to Help alexlawrence/2012/11/01/five-customer-retention-tips- Recruiting Later for-entrepreneurs/#604129f85e8d 2. https://cdn2.hubspot.net/hub/109434/file-333361905- 1. https://www.tinypulse.com/blog/sk-employee- SOURCES pdf/50_customer_service_facts.pdf recognition-stats A T 3. http://smallbusiness.chron.com/seasonal-factors- A 11. Don’t Forget to Take Care of Yourself D affecting-restaurant-industry-31192.html 1. https://www.projecttimeoff.com/research/state- 15 american-vacation-2016

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