October 2016

A 6-Step Checklist to Make Sure Your Restaurant Is Prepped for the Holiday Rush

October 31, 2016/in Operations/by Wil Rivera

If you’re a restaurant owner, the holiday season is something you may approach with a combination of anticipation and dread. As sales begin to increase, if you’re not prepared so can your stress level. Getting your ducks in a row well in advance can alleviate some of the anxiety the holiday season brings. If you’re not sure what to do first, this handy 6-step checklist provides a solid starting point.

1. Fill out the ranks

With vacation schedules and winter weather, having seasonal staff on hand to deal with the overflow can make the difference between sinking or swimming during the holidays. Take a look at your front-of-the-house and back-of-the-house rosters to see where the gaps are, if any.

For example, if your restaurant provides both catering and table services, be sure to have enough employees to cover both. The same goes if you have a private room for parties and you expect an uptick in bookings. Just remember that hiring new employees for the holidays is something you should tackle early on so you have plenty of time to get them trained.

2. Check your inventory

The last thing you need to happen is to find yourself running short of key ingredients or essential supplies when a surge in customer traffic is imminent. Conduct a thorough review of everything you have on-hand – from food items and alcohol to table settings, linens and janitorial supplies. Once this list is compiled, stock up on those things that you know you’re more likely to go through at a faster pace so that you’re not scrambling to get your hands on them at the last minute.

3. Plan your holiday menu

The holidays are a good time to try special seasonal menus, but you (or your chef) need to craft recipes beforehand. The availability of seasonal items like cranberries, chestnuts, sweet potatoes, varieties of squash can change quickly depending on demand. If your holiday menu features ingredients not available locally, you’ll need your supplier to track them down or to source a new vendor. The final step is deciding how those seasonal items will be priced and creating a special menu insert showcasing them.

4. Get your reservation calendar ready

If your restaurant includes a private room, you can’t afford to let it sit empty over the holidays. Reach out to local businesses and regular customers early on to let them know you’re accepting reservations for the holidays. If you normally charge a fee or require a deposit to reserve the room, be ready with a go-to price list for hosting private parties or special events.

5. Start holiday marketing in November

Your patrons start thinking about the holidays early, so start your holiday marketing in November. Your website, social media, traditional advertising, and email newsletters should all include references to your holiday menu and promotions. And if you haven’t spruced up your gift card display in a while, now is the time.

While the holidays are a great time to attract new customers, it’s important to remember your regular clientele as well. Look at last year’s bookings and reach out early to customers who have helped with your success over the year. Offer your regulars a discount if you sell gift cards or invite them in to try the new seasonal menu.

6. Deck the halls

Eye-catching holiday decorations can add to the overall ambiance of your restaurant. Decide what kind of decorating theme reflects its personality best and designate a day to put up the appropriate trimmings, both inside and out. Whether it’s some simple white lights or boughs of holly on every window, the key is to make your eatery as festive and inviting as possible to everyone who walks through the door.

Strategic Funding provides needed operating funds to small businesses. Strategic Funding has helped businesses from hundreds of industries. Industries served include: restaurants, personal services, construction, medical, manufacturing, agriculture, retail stores, automotive, and food stores.

How Retailers and Restaurateurs Can Boost In-Store Sales Through Specialty Leasing

October 19, 2016/in Industry Challenges/by Wil Rivera

Patrons at Irvine Spectrum Center, an upscale open-air shopping center in Irvine, CA, were surprised to see a familiar face in a brand new form. This summer, Japanese company Sanrio debuted the first Hello Kitty pop-up café in the U.S..

The company operates a chain of retail stores in the U.S. that sell kawaii (cute) novelty items with the likenesses of it’s many characters, including Sanrio’s most famous, Hello Kitty. Sanrio detoured from more traditional marketing methods. Instead, they embraced experiential marketing by launching a pop-up café and traveling café truck. Both the cafe and truck serve a selection of Hello Kitty refreshments and wearables.

Irvine Company, the shopping center’s owner, is one of several property owners that offer specialty leasing programs as an effort to maximize rental income. Hello Kitty’s creative marketing campaign is one example of how retailers can capitalize on these programs.

How Established Retailers Can Create Their own Pop-Up Stores

Specialty leasing is a different animal. Specialty leasing programs are primarily found in high volume traffic areas such as shopping centers and districts, strip malls and airports. These programs can only offer a small number of spaces. Therefore, prime locations are widely sought after. Leasing managers don’t allow too many competitors in the same shopping center. And they’re always looking for fresh ideas to excite or engage their consumers.

By building a rapport with specialty leasing teams, you can increase your chance to rent during busy seasons, get placement in high-traffic areas and be able to negotiate favorable lease terms.

What are Specialty Leasing Programs

Specialty Leasing refers to leasing Retail Merchandising Units (RMUs), kiosks and temporary in-line spaces. These programs offer access to high-volume foot traffic (in common areas) and can be a less expensive alternative to traditional retail leasing.

RMUs

RMUs or, as leasing pros like to call them, “carts” are landlord provided. Most will also provide signage, but others will allow you to display your own. Setting up a cart is a simple process. All you have to do is bring your merchandise and visually stock the cart to the leasing manager’s approval. Visual is the key word here, because it’s critical for shoppers to be drawn to your cart and not the other way around. In many locations, calling out for the attention of customers or “hawking” can get you fined or even thrown out.

Kiosks

Kiosks will be either a 10X10 or 10X20 foot space. Costs generally range anywhere from $15,000 to $30,000 and up, depending on the concept and functionality of the unit (i.e.plumbing, electricity, etc.). For instance, a small or mid-sized toy retailer who aims to drive in-store traffic by distributing colorful cotton candy and in-store coupons will be on the lower end.

Pop-Up In-Line Store

These spaces tend to only become available while owners are in-between permanent tenants. For owners it’s better to have a temporary tenant than having an empty store, which can be a negotiating advantage for you. Build-outs for pop-ups are the business owner’s expense. To help cover build-out costs, Landlords will offer permanent tenants a TI Expense, or Tenant Improvement Allowance. This is rarely available for a pop-up deal; however, they may consider a rent abatement — free rent for the first few months after lease agreement.

Nuts and Bolts of Specialty Lease Negotiations

RMU rents can range from $1,000 in a low-end shopping center to $8,000 at a premier property. Monthly costs for kiosks range from roughly $3,500 to $15,000. In-line pop-up rents are typically consistent with kiosks. In any case, it all depends on the location. The highest traffic areas with the best exposure will have the highest cost. Another key factor is the lease term and whether your stay overlaps a high volume season, like the holiday months of November and December where its common for rents to double. As general rule of thumb, longer lease terms can get lower monthly rents.

Specialty Leases are percentage leases. With this type of lease landlords ask for a percentage of sales above a certain breakpoint in the form of rent. Landlords set the breakpoints, which typically range between 7 and 15 percent. For example, if your rent is $5,000 per month, in addition to $5,000 you will owe percentage rent once your monthly sales exceed $33,333. Additional rent is the percentage of the amount above the breakpoint. A simple formula for calculating breakpoint is to divide the rent by the breakpoint (i.e. 5,000 / 15 percent = 33,333).

Typically, the lease term for an RMU is between 3 and 6 months; however, they can range from 1 month to 1 year. A kiosk lease is usually 1 to 2 years, unless it’s a sub-lease. In-lines are trickier because there’s the build-out costs. And some landlords will ask you to leave the moment they find a permanent tenant. Your budget will determine how you get started in this business – but there’s tremendous growth potential.

To learn more about shopping center leasing How to Lease Space in Shopping Centers: A Guide for Small Business Owners by Barry Fleisher offers in depth look at the ins-and-outs of lease negotiations and specialty leasing opportunities.

Strategic Funding provides needed operating funds to small businesses. Strategic Funding has helped businesses in hundreds of industries. Industries served include: restaurants, personal services, construction, medical, manufacturing, agriculture, retail stores, automotive, and food stores.

A Retailer Competes With the Big Guys By Joining With Other Small Guys

October 17, 2016/in Industry Challenges/by Wil Rivera

How does a small company beat big competitors, online and off? By joining with other small companies to create a big presence. That’s the strategy behind La Familia, a network of 13 specialty retail shops. The network is the brainchild of evo, a small retailer of sporting goods in the Pacific Northwest.

In the past, evo founder, Bryce Phillips, says the retailer encountered a lot of “dead ends” with customers. They would buy, say, a ski and a binding from its website. Evo would ship the purchased products. The relationship would then be over. Unless the customer lived close to one of evo’s stores in Portland, Seattle or Denver, it was nearly impossible to create a community where customers could get expert advice and guidance.

When Phillips was visiting his parents in Bend, Oregon, he stopped into a sporting goods shop called Crows Feet Common. Phillips was impressed with the owner, David Marchi, with whom, by coincidence, Phillips had skied the year before. They worked out a deal where their customers could pick up items at each other’s shops. A partnership that would allow their customers to benefit from custom fittings and personal service.

“Independent specialty retailers and multi-channel specialty retailers like evo have all been working in islands,” Phillips says. “It could sound counter-intuitive considering that we are sending customers into our competitors’ stores. But, we don’t see it like that. We trust that when we deliver a better experience, two major metrics that are important to us will improve: conversion and loyalty.”

Overcoming Reluctance

The initial stores were selected because of personal connections and friendships. Even so, Phillips acknowledges some were initially reticent to link up with competitors. “At first it’s common for an owner or manager of a store to ask ‘What’s the catch?'” he says. “Like any partnership, we have to establish trust that we are looking to create a win for both sides.”

Through the growing La Familia network, the small independent brick and mortar shops can now compete with box stores and online e-tailers when it comes to the ease, convenience, and a larger product selection from all 13 stores.

Those mutual wins include a revenue-share program where La Familia partners receive a slice of the pie if a customer purchases a product that evo sells and they are out of or do not carry. “This is only the tip of the iceberg when it comes to evaluating the network given the ways that all involved can benefit,” he says.

Many Ways to Grow

Phillips envisions many ways the network can grow. When one of the network’s vendors launches a special product, it can be leveraged across evo’s flagship locations, its web site and the La Familia network.

“This is also compelling when considering a launch of an entire brand. Then there is the end of life inventory. And we now have the ability to optimize pricing when the season is up” he adds. On the marketing front, partnering with stores on events can make those events larger and make customers more enthusiastic.

Now that word is spreading about La Familia, Phillips is being approached by sales managers and reps from stores he doesn’t know personally that want to join. He has some simple advice for retailers in other niches that want to put together a network: “Reach out!” he says. “We are in this business not only because we love the sports and lifestyle but also because it’s always awesome to meet and work with great people. We know that it’s very early when it comes to how our industry and retail as a whole will evolve. But we are excited to be working with great people who share our passion for building lasting relationships and great businesses.”

4 Things Small Businesses Can Offer That Big Stores Can’t Compete With

October 14, 2016/in Business Productivity, Operations/by Wil Rivera

Small business owners face plenty of challenges and keeping pace with larger big-brand companies is often at the forefront. Playing David to the corporate giants’ Goliath is no easy feat. When you find yourself fretting over how you’ll compete with bigger stores, it helps to concentrate on what your small business brings to the table that larger retailers can’t.

1. Deeper customer connections

As a small business owner, you have a unique opportunity to connect with people on a personal level. Get to know the people who are frequenting your business and take the time to understand their preferences. Listen to the people who are contributing to your bottom line, so you can mold your business and create personalized customer experiences.

If you own a bookstore, for example, you’re likely in tune with what your regular clientele is reading. That knowledge makes it easier to make recommendations or create in-store events that can lead to sales. A customer who walks into a large bookstore, on the other hand, may be on their own when it comes to picking out their next read.

2. Increased agility

In the business world, trends can change at the drop of a hat. Because of this, business owners have to be able to roll with the punches to stay competitive. Small businesses have an advantage over larger companies in terms of their ability to pivot and reshape their game plan when the market changes.

For instance, adopting a new form of technology, such as an upgraded Point of Sale system, may be less arduous for a specialty grocer who runs one store. A large supermarket chain may take several months to upgrade their system. The same is true for projects such as updating your business website or launching a re-branding campaign. When you operate on a smaller scale, there may be fewer delays and less lag time when a change is necessary.

3. Tighter focus

Running a small business means there’s less room for error, but that can be a positive when compared to bigger businesses. Think of it this way: Big box retailers can be like a buffet. They always have to stock many different items. Their customers can stock up on groceries, buy new tires and fill prescriptions all in one spot.

While that’s certainly convenient, a smaller business is better positioned to hone in on exactly what products and/or services are most important to customers. That in turn makes it easier to see what’s working and what’s not, so you can ditch any dead weight dragging your business down.

4. Added value

One mistake business owners can make is in believing they have to slash prices to stay competitive with larger stores. While that may help drum up some business, lowering your prices not only diminishes profits, but can also have the unintended consequence of causing customers to view your products and services as being lower quality.

A smarter alternative is to take a step back and look at what your business offers to its customers beyond monetary value. Do you have a deep well of knowledge about a particular topic that you’re able to share? Can you provide products or services faster than a big-name company would? Does your store offer a welcoming atmosphere that customers will want to return to again and again?

These are the kinds of questions you should be considering if you’re having trouble figuring out what gives your business an edge over the corporate competition. The more detailed you can be in your answers, the better. Listen to customer feedback and monitor your sales trends if you’re drawing a blank. Ultimately, knowing what your customers want, need and expect is essential for solidifying your business’s position in a crowded marketplace.