How to Optimize Your Hours of Operation

How to Optimize Your Hours of Operation
Here's a three-step process you can use to audit your business hours of operation.
by George Lee Jan 30, 2023 — 3 min read
How to Optimize Your Hours of Operation

 Consumers’ shopping and dining patterns were dramatically disrupted during the pandemic and continue to rapidly evolve. Fewer consumers are commuting back and forth to offices every day, which may mean fewer opportunities to drive traffic at certain times of the day. Lifestyle changes and wellness trends are impacting consumer behavior, thus impacting your sales. Combine consumer behavior with increased cost of supplies and limited available labor, and you can optimize your operations to maximize revenue..


An in-depth analysis of your operating hours will help you determine if your business hours are serving both your customers’ needs and your bottom line. Would opening your doors an hour or two earlier, or keeping them open an hour or two later, drive enough additional sales to justify the incremental expense? Conversely, could closing during certain hours help reduce expenses without having an undue impact on sales?


Other options for adjusting hours of operation could include temporary changes, such as before holidays, or opening during off hours for special events.


Here’s a three-step process you can use when conducting a deep dive into your hours of operation:


1. Analyze your data.


In order to evaluate your existing hours of operation and any potential changes that might be warranted, you must first understand your revenues, hour by hour and day by day, and how much it costs you to be open during those hours.


Square Dashboard includes many of the tools you need to make those calculations.


First, you can calculate your sales per hour, for each day of the week, using a Sales Summary Report. This tool gives you a summary of sales from any specific time period. Make note of your sales per hour for each day of the week.


You can also use the Sales Trends Report tool in Square Dashboard to examine any potential shifts taking place over time on certain days of the week, and the Transactions Report to get a sense of the number of customers you have during a given period.


The other essential element of your data analysis is your operating cost per hour. Use the Labor vs. Sales Report tool in Square Dashboard to view your labor costs by hour and date. While labor is likely the biggest factor to consider in your cost of operations, you should also look at other potential items that might impact your margins, such as any incremental utility costs or excess waste that might be generated by staying open an extra hour, for example.


Subtracting your existing operating costs for each hour from the sales you generate in that hour will help you determine if any of your hours of operation are unprofitable or perhaps if staffing changes are warranted.


Low-volume hours, when your costs are already minimized and you’re still unprofitable, could be considered for closure.


Conversely, high-volume hours that occur at the beginning or end of your daily schedule could indicate opportunities for expanding your hours of operation.


2. Estimate the potential ROI


Once you have a strong sense of your revenues and costs on an hourly basis, use your knowledge of your customer base to gauge whether or not adjusting your hours of operation might drive more revenues, or help trim costs.


Some factors to take into consideration when deciding whether to adjust your hours of operation include feedback from your customers, the hours of nearby competitors, and your staff’s availability if you change your hours.


Ask some of your regulars how a change in your schedule might impact them. Also, take a look at how busy your competitors are at different times of the day.

Use this information to make some educated guesses about how your sales might be impacted by different operating hours. Then, leverage the data from your calculations in Step 1 to estimate the sales and costs your business could generate under a new schedule. 


3. Test and learn


If you feel you have a viable plan for changing your hours of operation, make sure you post the new hours on all of your physical and digital platforms to optimize awareness among your customers.


Regulars will be disappointed if they show up during your usual hours and find that you are closed, and you could miss out on sales if customers don’t know that you’ve expanded your hours.


When you implement the new hours, continue tracking sales using the reports in Square Dashboard so you can easily compare “before” and “after” results. 


In today’s climate of elevated cost pressures and increasingly cautious consumers, it’s more important than ever to optimize your revenues and minimize your costs. Optimizing your hours of operation using the tools in Square Dashboard is one way to do that.


George Lee
George Lee has been writing about food-related topics, mostly in the B2B environment, for more than 20 years. He has written extensively about product development, marketing, distribution and other areas of the industry from farm to fork.


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