A little more than 2 weeks before we reach the end of 2022. Oooof. I have to take a quick pause as I type that. For us, whatever happens these next 2 weeks is critical to the success of our business. You may not know this but January is ROUGH on everyone in our industry. From watching people you admire close the doors to their businesses to having to pay every annual license attached to your establishments. Add to that your own customers' behavioral adjustments; crash diets, disciplined spending, and the harsh weather making them less likely to want to go out. All of those things, coming at you at the same time. Last year we got all of that plus an extra painful dose of omicron, which wiped away any little bit of confidence people had in going out for dinner. For us, it was a learning lesson, in many ways. For one, we should have just closed for a week or two during the new year. We did not. There was a period where half of our kitchen contracted covid, and so we had them stay home for the time recommended by CDC guidelines. We chose to stay open because our reservations were looking pretty good for the most part, considering that we had just been named “Restaurant of the Year” and “Best New Restaurant” (twice) by the local publications.
And so we chose to keep our doors open and pay our remaining crew a large amount of overtime as well paying the sick employees their “sick time” pay.
Our thinking here was “we might have to break even this pay period but at least our Guests will not have to be cheated out of their reservations”
In other words, we might not make any money but at least we will look good in front of our customers.
And just like that, in a matter of 2-3 days, everyone else got sick and all we did was shift everyone around like a carousel, but at least we did not cancel our reservations.
Then something else happened, every night during that 2-3 week period we would start our reservations at 52-60 Guests (for the night) and by the end of service we would have 12-14 no shows. We finished January at a net -$24,571.
Yes, because of our own poor judgment, we lost almost $25k just because we chose to stay open. It was a poor decision on our part, and I know some people might think that this was our own greed and ambition, but I can genuinely say that during that time we just wanted to do right by our Guests, and for us doing right meant not canceling their reservations.
We learned a lot from that month. Not just about reservations but also the importance of having a clean balance sheet and an understanding of what a “Profit and Loss” statement is.
Look, I won’t even go into the specifics of how bad we were at understanding our finances. For us it was all about riding this “wave” and eventually figuring out how we would pay ourselves at the end. Truth is, there are at least 100 things we would do differently if we had to do it all over again, finances are just one of them.
But, we don’t intend to make that mistake again.
This year we will be closing our flagship restaurant “República” for at least 3 weeks, come the new year. The idea is to have our crew take some time to themselves along all of our businesses. Once again we will be playing the carousel game, only this time you will see some of our more senior crew from República running around at our other establishments.
In addition, when you visit República in 2023, it will feel a little bit different. But, I am going to save that conversation for another time. Today I just wanted to give you a little more insight into the business of Restaurants during what some of us call “the cold months”.
Last, I will ask you to please, please, please support your local _______________ , during those cold months. For those of us in the industry, there is nothing more depressing than reading about one of your favorite places closing down at the start of the year.
Yes I know that this is just part of the business and part of life, but understand that our industry runs on margins; Cost of Goods, Rent, Payroll, Taxes, Miscellaneous. These all have a percentage associated with them. And what is left of it, whatever that percentage might be 5, 10, 15, 20… that’s where most of us business owners live, within those margins.
Again, you add all of the new years costs, the sick pay, the pto, the snow days, etc.. and you find you find yourself hating the cold months.
Anyway, thank you as always for letting me ramble.