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The COVID-19 restaurant crisis is taking a significant toll on the restaurant industry.
The economy came to a virtual stop due to COVID-19. As the financial shock to the U.S. and world economy unfolds, it continues to be especially hard on restaurants.
This crisis will evolve as the rules for doing business constantly change. While “best practices” may change daily, restaurants can take action to minimize the overwhelming impact this crisis will have on them.
Here are 5 things restaurants can do RIGHT NOW to help survive the COVID-19 crisis:
1. Bring In ANY And ALL Revenue You Possibly Can
Restaurants are taking a huge economic hit from COVID-19. To minimize the financial impact, you need to focus on any elements of your operations that can still drive revenue.
As certain parts of the country start the ‘re-opening’ process, it’s important to focus on aspects of your business that are the most beneficial to your bottom line.
With minimal or zero in-house traffic, focus on your takeout and delivery operations. If you don’t have takeout or delivery operations – START NOW. This is critical, and will be for the foreseeable future. Even when we exit this crisis, takeout and delivery will remain very popular with customers.
While takeout and delivery sales were already growing at impressive annual rates, this crisis has accelerated that growth significantly. Restaurant owners should expect their ‘post-crisis’ takeout and delivery sales to be much higher than their ‘pre-crisis’ sales, even if they subside as dine-in business resumes.
Your focus on local customers is imperative. Thankfully, your takeout and delivery customers are your most loyal, so they’ll continue to order from your restaurant if you make it easy. Think about your takeout and delivery customers when implementing any new restaurant marketing ideas.
Safe Takeout and Delivery Practices For Restaurants
Customers need to feel safe when visiting your restaurant while COVID-19 is still active. Make a point to earn your customer’s trust by keeping them healthy. Your cleaning and sanitation practices should be VISIBLE to customers and posted where appropriate. You should also consider offering curbside pick-up so guests don’t have to leave their car or enter your restaurant. Other suggested practices include:
- Encourage electronic payments (vs cash)
- Increase the cleaning frequency of high-touch surfaces like counters and customer-facing payment equipment
- Limit the number of people inside your restaurant and encourage social distancing if a line forms outside your restaurant
For delivery, implement a ‘contact-less’ delivery solution, so there is NO contact between your delivery staff and customers. This means your delivery drivers should leave the food outside, without directly speaking to customers. Arrange for payment in advance and communicate this process to customers so they know you’re trying to keep them safe.
If you don’t operate your own delivery service or use a third-party provider, it’s time to consider it.
2. Sell Gift Cards To Bring In Additional Cash Flow
Access to as much capital as possible is important in the near-term. Selling gift cards is a great way to bring in additional money and ease your cash crunch.
The additional benefit of selling gift cards now is that it can bring customers BACK to your restaurant as conditions start to improve. You can also consider selling gift cards for a slight discount with any takeout or delivery order. For instance, you can include the option to buy a $25 gift card for only $20 with the purchase of any takeout or delivery order.
3. Maximize/Minimize Everything
Employees
It’s important to be candid with your staff at this time – they will be financially impacted too.
There isn’t much need for servers if your dine-in operations are halted due to the COVID-19 restaurant crisis. Even as restaurants begin to re-open, the need for wait staff will be minimal in your dining room if your restaurant’s capacity is cut to 25% – 50% of normal.
But, can your wait staff make deliveries for you? Or, can they help in the kitchen? Figure out where you can best use your staff to maximize their benefit. If you simply don’t need them some days, send them home.
If you aren’t able to pay an employee, terminating them might be the best financial option for everyone. Terminating or furloughing an employee will allow them to collect unemployment. This will provide them with critical financial support they need.
Operations
Adjust your hours. Your restaurant probably doesn’t need to open as early or stay open as late. Adjust and adapt to save money.
Rent
If you feel compelled, contact your restaurant’s landlord and request rent relief. Your landlord wants to keep you as a tenant and, given the current economic landscape, their ability to easily replace you as a tenant is very limited. Explain the situation and ask your landlord to accommodate you with some immediate rent relief. Negotiate what you think is reasonable and thank your landlord for accommodating you during this restaurant crisis.
Business Interruption Insurance
Check your insurance policy. If you have business interruption insurance for your restaurant, you may be able to receive financial assistance. This type of insurance covers income lost in the event a business is halted (i.e. during a natural disaster). But, coverage might also apply if government actions cause operations to cease temporarily. With state and/or national directives to close restaurants, your business interruption insurance might be able to provide you financial relief. If your restaurant is initially denied a claim, you might want to monitor pending litigation regarding business interruption insurance policies.
Relief Funding and Aid
Relief funds have formed for restaurants and food-service workers. These are some programs, available to restaurants, bars, and restaurant employees all over the U.S.
The National Restaurant Association has released information about the “CARES Act” with these Frequently Asked Questions regarding the benefits for restaurants.
The U.S. Small Business Administration also has some resources and guidance to help restaurants get financial assistance and access to loans, like the Paycheck Protection Program.
4. Have Enough Packaging
Your restaurant will need additional takeout and delivery packaging during this COVID-19 restaurant crisis. Be prepared and make sure you have enough supplies on-hand to process the extra takeout and delivery demand. If takeout and delivery orders are your restaurant’s lifeline, make sure you have what you need to handle every sale possible.
5. Encourage Large Takeout And Delivery Orders
You need to motivate customers to buy as much as possible. You can encourage people to place larger orders by including a free item or appetizer with orders over a certain amount.
Packages also work well. A well-priced family dinner package, with everything needed to feed 4+ people can make a family’s dinner decision easy. An easy and affordable dinner option is sure to drive customer interest and sales.
Additionally, in some cities, restrictions have been lifted on alcohol sales for takeout and delivery orders. This allows restaurants to sell alcohol with off-premise purchases. You should take advantage of this and sell as much inventory as possible. Even if you’re selling beer or wine at cost, you’re still collecting revenue to cover the sunk costs of your alcohol inventory.
Looking Forward
The COVID-19 restaurant crisis won’t last forever. While it’s difficult in the moment, we will get through this.
You should also expect things to be different on the other side. Customer habits will change due to this crisis. The exact changes aren’t known yet, but restaurants need to be prepared to adapt to new customer trends as restaurants start to resume ‘normal’ operations.
Will customers feel comfortable dining in a crowded restaurant? Will customers simply dine-out less (vs takeout/delivery)? Restaurants will need to keep an eye on customer habits as we move towards a ‘new normal’.
Now is the time to evaluate your operations. What aspects can be streamlined? Restaurants should look for ways to be as efficient as possible. As we come out of this crisis, you’ll need to be as competitive as you can. The economy is MUCH different compared to what it was before the crisis began. Take the opportunity to eliminate anything that wasn’t working well to help improve your margins.
If needed, your restaurant can also choose a short-term loan or same day loan to make the transition into post-pandemic operations easier.
While everyone else remains in a reactive mode, you might find a competitive edge by operating in a proactive mode.
In Summary
This crisis is difficult for everyone. Be kind to those in your community and your employees. Somethings are simply out of your control. Try to only focus on aspects you can control during this crisis.
Also – be thankful for what you have. Your community will rise up to support local businesses and, even though it’s a really difficult time, be thankful for all of the support you get. Tell customers how much you appreciate their business and motivate them to order as frequently as possible.
Adapt as best as possible. We’re all in this together.
Activate Your NetWaiter Site
To attract more local customers and keep them informed about your restaurant during the COVID-19 restaurant crisis and after, you can use NetWaiter’s marketing platform and network for free. Search for, and activate, your restaurant for free here:
