Corona Virus. Covid-19 -The news wires, our news feeds, social media and social interactions are dominated by the subject; and justly so.
Until now I had been reluctant to write ‘another’ article on the subject. But, to avoid doing so would be to ignore the single biggest event of our time; one that has decimated our industry and turned it on its head for a long time to come.
It is survivable though, and this post has been written to show you how and why your business can survive this. I’m going to talk about some basic principles applicable to all restaurants around the world; and at the end, you can download my list of top survival tips to help you get through.
The uncertainly caused by this pandemic breeds fear and anxiety, the likes of which we couldn’t have contemplated just months ago. We fear for our livelihoods and those of our staff and suppliers; our families and the businesses we’ve for so long nurtured.
While the challenges facing hospitality businesses are significant, there is a great deal about this industry which should give you great confidence and hope.
In particular, restaurants have the ability to adapt to the changing market as there are so many elements to your business you’re able to manipulate and tweak in order to survive.
As a restaurant, your business model is pretty flexible and virtually every variable involved in bringing money in, and managing money out, can be tweaked and adjusted. -While it might not feel like it; you’re in a much better position than a lot of other industries.
I’m working with dozens of hospitality businesses right now; helping them plan for the months ahead, and it’s great to see so many restaurant owners reaching out for help at this time.
While the planning we’re doing is tailored specifically to those businesses, there are some common principles underpinning each of those plans which I wanted to share with you.
1. CHANGE TO A BREAKEVEN MINDSET
As someone focused on restaurant profitability you won’t hear me say this often, but we’re in survival mode right now, and for this reason we need to alter our mindset from a profit-driven focus to a breakeven focus.
For now, we need to focus on cashflow; covering our costs, and if possible putting a bit of money aside as a safety net. If we can achieve this, profitability will soon follow.
2. STAY NIMBLE
Everything around us is changing by the day and we need to be able to react with urgency. This involves, transitioning to a low cost model, watching our numbers, and in particular our costs, like a hawk. –Again cashflow will help here.
3. FOCUS ON BASIC PRINCIPLES
You know what to do here! -Right now we need to focus on getting the basics right. This means, focusing on costs and margins, delivering outstanding value and service to our customer, managing money well and looking after staff.
My previous and upcoming posts will help with this a lot.
4. TRIM YOUR MENU
I mentioned earlier moving to a low cost model; the key here is to re-engineer your menu to focus on items with a low food cost and low labour component, that also travels well for takeaway and home delivery.
5. UTILISE EVERY SALES CHANNEL AVAILABLE
You need to put yourself in front of as many customers as possible. Whether it be home delivery, mobile ordering or takeaway aggregators; your customers will be using these platforms, so if you’re not there; they’ll buy from someone else.
The commissions charged by these platforms can be off-putting, but for the time being you need to work this into your business model. And, if you’re operating a low cost breakeven business model, this should be pretty achievable.
6. CHANGING FOOD COSTS
As we’ve already seen, food costs are bouncing all over the place right now. Watch these closely to make sure they’re not eroding your margin.
7. BE PART OF YOUR COMMUNITY
Chances are your restaurant is an important part of your local community, and your loyal customers will try and support you however they can. Be part of this by looking after your customers, your staff and your suppliers however you can.
Over the last few weeks I’ve heard numerous heartwarming stories of the public actively trying to support their local businesses. In one instance a colleague of mine pre-paid $100 worth of coffee at his local café; in another a client managing his own home delivery service was gifted a delicious bottle of red by a generous customer. –Your customers want to support you.
TO SUMMARISE . . .
The months ahead are going to be challenging and unpredictable; but things will come right, so for now it’s a case of switching to a survival mindset and getting down to basic principles to nurse your business through.
If you get this right, there’s a lot to be optimistic about and I strongly believe that you will be rewarded at the end with a stronger, more profitable business serving a positive and loyal community.
Find out more about getting your business through Covid-19 by downloading my free Survival Tips.
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