Don?t Just Talk About the Weather, Use It to Advantage

A well known, national chain of restaurants discovered that certain weather patterns substantially impacts their business. They have studied it and found that more people go out to eat dinner when there is a series of beautiful days. So they measure the weather quality at their stores across the country. Managers report the weather quality daily. A weather predicting system is then employed to determine the quality of subsequent days. When the model predicts a higher customer count they reduce or eliminate sale items and include higher priced or higher margin specials on the changing daily menu. While they can't control the weather, they know that their customers respond to it. Knowing that, they work to take advantage of factors that can predict changes in business activity.

Many businesses have sales fluctuations based on the weather but few companies include weather-predicting metrics into their staffing and inventory planning. They just take weather fluctuations and volume fluctuations as "acts of God." But imagine if your business sold car batteries and you could increase inventory just before it turned ten degrees below zero. You would be able to lower or eliminate the number of lost sales because of being sold out of the most popular models. You would be able to schedule more people to work those busy days so customers would be serviced quickly and efficiently. You would do more business because your competitors would be sold out or have long waiting times. You would also be able to turn your inventory more efficiently for a greater ROI (Return On Investment).

Your business might not fluctuate by the whims or patterns of the weather, but I'm sure it does fluctuate by some factors that you do not have control over. Study various patterns and factors. Become aware of them, measure them, chart them, and understand the dynamics. Use those factors to predict busier or slower sales periods and adjust inventory, staff size, prices, and margins accordingly.

Larry Galler coaches and consults with high-performance executives, professionals, and small businesses since 1993. He is the writer of the long-running (every Sunday since November 2001) business column, "Front Lines with Larry Galler" Sign up for his free newsletter at http://www.larrygaller.com

In The News:

Don?t Just Talk About the Weather, Use It to Advantage

Strategic Planning Strategic Planning