For restaurants in Las Vegas, the dreaded time of year is summer when temperatures routinely reach into the triple-digits (and that’s in the shade)! For restaurants based in the Northeast, the period of the calendar that inspires the most terror is frigid February when a mix of post-holiday consumer debt and blistering cold weather keeps customers at home. And while New Orleans may be America’s party hub, “The Big Easy” also happens to get the most rainfall of any city in the summer — which is good news for umbrella manufacturers, but bad news for restaurant owners who depend on spontaneous walk-up traffic to fill seats and boost revenues.
Yes, we’re talking about seasonal slumps in the restaurant industry — which, while inevitable, don’t necessarily have to be dire. In fact, some of the most profitable restaurants aren’t always those that generate maximum revenues during the (highly competitive) busy season. Rather, they use business funding to turn seasonal slumps from dreaded periods into a time where they take advantage of opportunities other restaurants aren’t utilizing. Here are 3 proven strategies:
Launch a Special Promotion
Many restaurants use business funding to launch special promotions that not only entice existing customers to drop by, but even more importantly, reach new customers who can become long-time, loyal fans.
Yes, it’s true that during the campaign profit margins on promoted menu items will be thin for a while — or maybe non-existent. But as wisely advised by Food Drink & Franchise Magazine: “Marking down your product can be tough…but it’s still a sale made – food sold at a discount is a lot better than food not sold at all. Until the sales graph starts to arch upward again, it’s a solid way to stay afloat.”
Develop Co-Branding Relationships
As noted above, sales for restaurants in the Northeast and Midwest tend to take a nosedive after the holiday season, as customers deal with credit card bills, and go to battle against Old Man Winter. However, this same period is often when movie theaters see a spike in business, since spending $20 on a flick is a relatively cheap and easy way to beat the winter blahs — at least for a few hours.
In light of these trends, smart businesses are using business funding to develop co-branding relationships with nearby movie theaters, by (for example) giving moviegoers a 20% off their restaurant bill. The same approach can be used for co-branding with any local business that has an uptick in off-season consumer traffic, such as auto repair shops.
Target a Different Buyer Persona
As documented in a feature story by the Las Vegas Review Journal, a restaurant owner implemented a visionary strategy to deal with the annual summer slump: instead of continue to target high-flying tourists and corporate convention-goers — which are few and far between in the summer — the restaurant set its sights on families traveling on a budget (a 4-star hotel in June and July on the famous Las Vegas strip can go for as low as $25/night!). The result was a surge in business, and plenty of free word-of-mouth advertising.
This is just one example of how using business funding to target non-traditional customer groups can be smart and sustainable way to mitigate — or even eliminate — seasonal slumps.
To learn more about how business funding can help your restaurant overcome seasonal slumps, contact the National Business Capital team today. We offer a full range of financing solutions for both short-term and long-term needs. Fill out our two minute application or chat with us today!