Coronavirus (COVID-19) has caused a sharp downturn in the restaurant industry, and businesses all over the world are scrambling — and many are temporarily closing.
Many states and municipal governments have started instituting mandates in the interest of public health that mean restaurants can only operate through takeout or delivery. In this piece, we’ll cover a few ways that may help keep revenue up and costs down as you face these new restrictions.
Much of this advice is also applicable if you run a restaurant in a city that hasn’t yet been hit hard by Coronavirus: this is how to start preparing your restaurant.
And, just so you know, this content is for informational purposes only and is not intended as legal, accounting, tax, HR, or other professional advice. You’re responsible for your own compliance with laws and regulations. Contact your attorney or other relevant advisor for advice specific to your circumstances.
Take a Look at Your Numbers
It might be painful, but it’s extremely important to know the extent of the problem, says Chicken & Rice Guys in a recent blog post they wrote about lessons they learned when dealing with an e.Coli outbreak years ago.
Download the data from your POS system and update your spreadsheets. Make sure you know how much money is coming in right now compared to a normal week, and find out exactly how much money you’ll need to stay afloat.
Check on Your Inventory and Make the Most of It
“Restaurants are in a time where every single dollar will make a difference,” says John Enny of inventory software xtraCHEF. Do a dive into your freezers and dry storage and see how much product you already have.
Enny recommends taking inventory right now, and calculating the value of what you already have on hand. Then, you can use these already-purchased ingredients as the center of your reduced menu — more on that in the next section.
This will also give you a little bit of temporary relief in terms of how much you pay for ingredients. When you do run out, you’ll be able to order adjusted levels of inventory to match the decreased flow of customers.
Limit Your Menu
Create a new, limited menu for this difficult time. If you can provide a smaller array of dishes to your guests that’ll allow you to reduce your inventory ordering, you’ll have a bit of an easier time.
You can prioritize dishes that are centered around ingredients you already have, and ingredients that are relatively inexpensive, so that each dish is as profitable as possible.
It’s also helpful to think long-term when faced with a walk-in full of fresh vegetables and other perishables. Use techniques of preservation like curing and canning to make things last as long as possible.
Talk to Your Vendors
There’s a good chance they can see this coming right now, but get on the phone with your vendors. In their blog post, the Chicken & Rice Guys recommend that you reach out to your vendors and speak honestly about your financial situation — with the numbers you pulled from your POS to back up your story.
“For example, something like, 'Hey I ran my numbers, and we are going to run out of money in 3 weeks if we don’t make fundamental changes, is there anything you can do to help reduce our payments or delay some payments?'"
- Chicken & Rice Guys
This way, your vendors can prepare for financial asks or give credit for larger orders. Who knows — they might even have cheaper options for you to use in your menu instead.
Talk to Your Financial Partners
If you have financial partners or investors, let them know that this situation is unprecedented, and that you’re doing everything you can to stay afloat.
If possible, keep them updated a few times a week, because this situation is changing every single day. Finally, don’t make promises you can’t keep and be transparent and realistic with every check-in. Let them know you may be communicating with them a few times a day. In times of crisis, it helps to be overly communicative and honest about your situation and potential hardships.
Talk to Your Bank
If you have loans or company credit cards, get on the phone with your bank and see if there’s any way they can help you weather this storm, or prepare for it if your city hasn’t yet been affected.
Offer Gift Cards and Promote Them Widely
This goes for all restaurants right now, even ones that have already had to close temporarily: In your customer communications, tell your community that they can support your business by purchasing gift cards to use once things get better. Whether or not you’re a Toast customer, you can add your restaurant to this Rally for Restaurants searchable database so your guests can easily buy gift cards to use when you’re back on your feet.
With Toast Now™, restaurants can set up digital channels, like online ordering, a mobile ordering app, contactless delivery, and e-gift cards for three months free. No hardware or POS purchase required. No onsite installation. And best of all, no commission fees.
Ask for Donations to Support Your Staff
Many restaurants have started collecting donations from their customers who have reached out to help. On social media, provide a Venmo account name to your customers so they know where they can easily send money. You can also provide two different Venmo accounts — one for a collection pool to divide among your staff, and one to support business expenses and getting back on your feet.
If you had t-shirts, hats, mugs, tote bags, or any other kind of merchandise, now’s a great time to push this product on social media. If you don’t want to pay for shipping right now, you can tell your customers that the item they purchase will be available to them at the restaurant when you’re able to open again.
Change Your Concept Completely
Seattle has been hit hard by the rapid spread of Coronavirus, and two of the city’s fine dining restaurants realized that no one needs elegant, expensive food right now.
Art of the Table pivoted to delivery and takeout, and they’re offering family style comfort food.
Canlis has turned their restaurant into three different takeout or drive-through restaurants in one space, serving bagels for breakfast, burgers for lunch, and family meal-style dinners.
You can also sell bulk items on your menu to help get your guests through this tough time, like offering plates of cold food for guests to refrigerate and reheat later. Before deciding to close, MeiMei in Boston created bulk take-home options of sandwiches and snacks to utilize their inventory while providing guests what they needed.
Cut Your Hours of Operation
Many restaurants have had to resort to cutting their hours of operation, especially if they’ve pivoted to only offering off-premise orders. Consider limiting your service to only lunch or dinner, rather than both.
Unfortunately, this option will impact the income of your staff significantly. While cutting staff hours should be a last resort, you may be faced with the challenge of making that decision in the coming days or weeks. If your restaurant has to make that painful decision, be as open, empathic, and transparent with your team as you can. Ask your staff if anyone is in the financial position to forfeit some of their hours. Let them know that you are doing your best to keep your doors open so you can welcome them back later.
With any changes to the customer-facing side of your business, keep your guests informed on social media or email. This guide, with examples, will show you how to reach out to your loyal guests during this difficult time.