Adjusting to the Recession

This, like my posts on Food Costing are to give you an insight into how I not only run my own business, but how many restaurants side-step the pitfalls and, hopefully, succeed.

Tuesdays dinner might just go by the wayside, giving me Tuesdays & Wednesdays off. Lack of business 2 Tuesdays in a row might be an accident. If the next two also do so poorly it will be a trend. Tuesdays use to be our best weekday dinner, followed by Thursday & then Monday. Lately Thursdays have proven to be great followed by Monday & then Tuesday; though the occasional rip-roaring Monday happens. At random times, Thursdays have been better than Tuesdays- this often has lasted for months. But even when the two days have switched as to which was the better, the slower of the two days was not outright dead! The last couple of Tuesdays has seen less than $50 of business. In the long run that will NOT do! (2011 has been a roller coaster, though, overall, much better than 2010.)

I was lucky- I called the recession right after Black Friday November 2007. I always watched my business' numbers carefully. I talked with other business owners and managers in my town and across the country. I followed news reports. That's why when the figures for retail sales that Thanksgiving weekend came out I announced to anyone who would listen that we had just headed into a recession that I had seen slowly coming on over a 3 year period. I'm not that smart, but I had managed other peoples' restaurants through other recessions. Little did I know, that contrary to what the government & press have called it, we would be in a depression.

(As an aside, the word recession never existed before 1937 as an economic term. As Roosevelt slowly, but with more stimulus than the Obama administration, spent us out of the Great Depression, he was politically coerced into balancing the budget. This sent the USA into a double dip depression. To keep from scaring people they came up with a new term- Recession. Since then it has become the term of choice, to keep the consumer/voter moral up. After all, it's a less scary word. Only the massive government spending for WWII got us out of the depression. For years politicians took the wrong message out of it- that war was good for the economy. Usually war, like Vietnam, Iraq & Afghanistan, don't help or actually hurt the economy. It was the massive spending by the government, when the private sector wasn't spending at all, that ended the it.

Obama's stimulus, just like Roosevelt's early non-war stimulus, was too small to get us out of our present predicament. As a small business owner I believe in balanced budgets, but during a depression I'm a Keynesian for the entire economy.- deficits don't matter until the economy as a whole is thriving once again and there is income to pay it down. Besides which, few of us never go into temporary debt. Houses and cars are often bought on credit. I have to replace our main freezer and I'm doing it, out of necessity with a loan.)
In January 2008, after the holiday season craziness was over, I looked at all my figures and saw that lunches would soon loose money. I gave my regulars 6 weeks notice and dropped weekday lunches by the end of March of that year; though I kept weekend brunches. In June of that year I met another local restaurant owner who said that he was no longer making it on lunches and weekend brunches and he was going to add weekday breakfasts- which he did and was successful with. I told him that I expected that to happen and that is why I had dropped lunches. By July '08 I dropped Saturday brunch because they had begun to barely break even. In the fall of '08 Sunday brunches went the way of Saturday brunches; and the whole country/world knew we were in recession. By adjusting and slowly becoming just a dinner place we had our second best year profit wise in '08.

2009 was our most profitable year ever.

2010 we felt the recession the way many of my local competition had begun to feel it in '09. It was a terrible year, but we made it through. The second half of February 2011 we went back to nearly normal numbers and other local restaurants also saw an uptick in sales. Then the last week in April gas prices went skyrocketing and sales dropped about 20%. Since June we have seen normally busy does slow and slow days often slam. But I have learned that if something happens 4 weeks in a row it is a trend, not a coincidence. We have sent staff home early on slow nights. And I cut our busser bake to four days a week. We'll adjust as we need to. Thankfully I've been doing this long enough to know how to survive.
The newest menu is within the same price range as the last, without changing portion sizes. I brought on less expensive but high quality meats, fish, etc to keep from needing to raise the range. Most of the items that stayed, like Filet Mignon, I was able to hold at the old price. A couple of things went up, but by a few cents. With these changes we will be here for another year. But I'm not quite sure yet how I will feel if we go to dinner just 5 nights a week. Another day off would be feel luxurious, though I'll still need to work half of Tuesdays since it is my biggest delivery day. (Actually, it is also my earliest day, except for Cooking Class days.)
George and I are going to try opening the bar on Saturdays from 3pm to 5pm for tapas and beer or wine. It'll be any 2 bar tapas for $12 with the purchase of beer or wine. It'll start 7/16 and we'll run it through at least the Saturday of Labor Day Weekend. Being innovative, that's how you get through a depression. Now, if the politicians on both sides don't screw it up, we'll have a better year as it goes along. I hope for all our sakes they don't.