Author Archives: Harris Eckstut

3 stars from Philly Magazine for Sorellina: https://connect.metrocorpmedia.com/files/html/flipbooks/pm2411/pm2411.html#p=144

Almost all restaurants experience seasonal fluctuations—there are “good times” when customer traffic is high during peak season, and there are “slow times” or the “off-season” when business tapers off. In between, restaurants face varying levels of customer activity based on factors like location, weather, holidays, events, or broader business cycles.

During these slow periods, restaurateurs face a significant challenge: CASH FLOW issues. Simply put, there’s not enough revenue coming in to cover all the expenses. As a result, restaurant owners must make tough decisions to cut costs, borrow money, or, ideally, find additional ways to bring in revenue to ease the financial strain.

Cutting Costs to Survive the Slow Period

The first step many restaurant owners take during slow revenue periods is to “tighten the belt” by reducing expenses. However, not all costs can be slashed. Certain fixed costs, like utilities and rent, remain constant regardless of sales. But there are some areas where cost-cutting can provide some necessary relief:

1. Payroll Adjustments: In almost every restaurant the most significant expense is labor. During slow periods, reducing employee hours or offering temporary layoffs—especially for tipped employees—can help ease the burden. (Be mindful of maintaining positive relationships with your team so they are eager to return when business picks back up.)
2. Inventory Control: Reducing inventory dollars can also help with the cash flow, as lower foot traffic means less need for dry goods and perishable products.
3. Vendors: Some vendors may be open to flexible payment arrangements during the off-season. Established long-term relationships with suppliers may open doors for delayed or split payments.  Credit card payments, although having high interest rates, are short term (until business picks back up) options.
4. Operational Efficiency: Evaluate operational costs and find areas where small savings can add up. This is also the opportunity to fine tune operations year-round.

MARKETING – don’t cut, increase!

When times get tough, marketing is often one of the first expenses cut because it’s just easier to do.  However, marketing is critical to driving business and maintaining a restaurant’s visibility – ESPECIALLY during slower times. A restaurant can never stop Marketing – PERIOD. Creative marketing during slow periods can maintain and generate new revenue streams without requiring a lot of money.

Here are some low-cost or even free marketing opportunities that restaurants can tap into:

1. Leverage social media: Use platforms like Instagram, Facebook, and TikTok to engage with customers in real-time. Post regular updates, showcase your food, beverages and ambience, share behind-the-scenes content, or highlight special events. Social media can help build loyalty and keep your restaurant top-of-mind for regular customers.
2. Create promotions that generate excitement.  For example, if your restaurant is in a residential/walkable area and there is a blizzard, send out an e-blast offering 2 for 1 Margaritas or very reduced priced appetizers of your restaurant’s most popular food and drink. Remember: it’s  snowing out and nobody is driving anywhere! ( I write from experience: during the Blizzard of 1993 in Philadelphia, my restaurant actually ran out of liquor!)
3. Collaborate with Local Businesses: Cross-promotions – especially retailers and other non-competitors — can help tap into a broader customer base.
4. Host Events: Hosting small events or themed nights can attract diners and/or drinkers. You know you are going to be slow this time of the year, so, look into trivia nights, live music, cooking classes that cater to your target audience, etc. Give the smaller customer pool you are sharing with competitors a reason to choose your restaurant over those competitors.

The Bottom Line: MARKETING – Time Well Spent

While you might not have the cash to spend on traditional marketing campaigns during slow periods, some creativity and a time-investment (yes, time is money) can go a long way. By leveraging digital tools, creating promotions, staying visible online and by other means available, you can generate additional revenue that will help to ease the almost inevitable cash flow crunch.

Then, when peak season rolls back around, you’ll be in a stronger position—with 

less debt from the off-season and greater year-end profits.

Best of Philly awards Cicala with 2021 Best Italian Restaurant and Best Restaurant We Never Got to Fully Celebrate:

https://www.phillymag.com/best-of-philly/food-drink/?bestof_search=Cicala&s=1#

• A coffee shop in Rockland County, NY has not been profitable.
• It has a very good location with excellent pedestrian traffic – especially on the weekends.
• Sales remained constant during COVID-19.
• Baked goods are made in-house and are EXCELLENT.
• Sales volume can handle the rent.
• In reviewing the un-profitable status, the PRIME COSTS of Labor and Product were too high.
• Ticket averages were low – i.e. not selling enough of house made baked goods.
• The owner and Harris put together an agenda for a management meeting to address these issues.
• Number one on the agenda was to call for a weekly management meeting the same day of the week at the same time every week – no exceptions.
• At the first meeting, we addressed why the cafe was losing money.
• The Prime Costs were too high
• #1 pricing – by analyzing the costs of the coffee and pastry – and researching competitor pricing – it was determined that prices were too low.
• Retail “dogs’ not produced in house with high costs did not help ticket average or promote more business. And they were cutting into purchases of more profitable house made products.
• Scheduling personnel needed to be tightened up – especially anticipating busy and slow days.

Why were sales low?

• Merchandising in store was just wrong.
• Confusion of available product.
• Front window did not “sell” to all the pedestrians walking by
• Confusion of where and how to order.
• The shop was promoting self enough

The Result

• By immediately addressing these issues in a thoughtful, well-planned, and reasonable manner sales increased immediately, profit margins on products increased.
• Even with increasing employee wages, labor costs went down.
• 3 months later, the coffee shop was generating a significant profit for the owner/operator with more sales growth on the way
• The business is being run more effectively on a daily basis.

Craig LaBan reviews Vernick Food & Drink in Philadelphia Inquirer:

https://www.inquirer.com/philly/columnists/craig_laban/vernick-best-restaurants-philadelphia-20171209.html

Conde Nest Reviews Vernick Food & Drink:

https://www.cntraveler.com/restaurants/philadelphia/philadelphia/vernick-food-and-drink

Foobooz review on Cicala:

https://www.phillymag.com/foobooz/2020/02/20/cicala-review-divine-lorraine-restaurant-philadelphia/

Harris Eckstut teaches THE DOLLARS & SENSE OF OWNING A RESTAURANT

• Tuesdays, March 31 and April 7, 2020
• TIME: 6 p.m. – 8:30 p.m. – FEE: $110
• LOCATION:
  THE RESTAURANT SCHOOL AT WALNUT HILL COLLEGE
  4207 WALNUT STREET, PHILADELPHIA, PA 19104

This two class course is geared towards those individuals who dream of one day owning and operating a restaurant – as well as those interested in investing in one.

Harris Eckstut shares his knowledge from over 30 years as a successful Philadelphia restaurant owner. He provides insights that can only come from long-term accomplishment and commitment. Eckstut is not only an expert in restaurant ownership and consulting, but is a lively presenter who incorporates his restaurant business knowledge and depth of experience keeping attendees actively engaged.

From a recent class attendee, and longtime restaurateur,

“…Harris Eckstut is outstanding. He is the most knowledgeable restaurant consultant that I have met in my career in Philadelphia. His lecture was a tour de force. In a low key fashion, he covered a great amount of information….”

Another grateful attendee shared this thank you note:

“The information you gave us was beyond useful! We now have a more realistic perspective about the restaurant business.”

Greg Vernick, Chef/Owner, Vernick Food & Drink in Philadelphia:

“Vernick Food & Drink would not be as successful without the help of Harris Eckstut.”

Connie Correia, owner of the Pop Shop in Collingswood, NJ:

“Harris took us by the hand and taught us all the things about the restaurant business that we didn’t even know we didn’t know! Because of him, we are still in business and now thriving instead of floundering.”

His professional services include: leasing and development, sales and purchases, operational analysis and planning, “turnarounds,” and “start-ups” for the independent or prospective restaurant owner. He also evaluates business plans, operations and budgets for lenders, investors, developers, community organizations, and urban and suburban Main Street planning.

Harris owned the legendary MontSerrat Restaurant on South Street for 25 years and has over 30 years’ experience in the independent restaurant industry.  In the last two years he has assisted in opening and/or expansion of the highly successful: Vernick Food & Drink, Cicala’s at The Divine Lorraine, The Good Karma Cafes, Sang Kee, The Pop Shop in Medford/Collingswood, NJ, Green Line Cafés, 320 Market Café in Swarthmore, T&N Kitchens, Philly Farm Truck, Gus’s World Famous Fried Chicken (MD) The Cow & The Curd, as well as working with new restaurant start-ups, lenders, investors, landlords, attorneys, community development organizations, and developers.