“Great opportunities can be and have been created during tough economic times.” - Howard Schultz
The restaurant business is tough and it just got a whole lot tougher. As someone who used to own restaurants and now works with restaurant owners every day, I have the greatest respect and admiration for those who are pushing through during these unpredictable times. There are countless stories of restaurant owners stepping up by donating meals to front line workers and making every attempt to put employees first. COVID-19 represents a seismic shift in how business is done and how consumers interact with your brand. Those who are able to push through and adapt have the potential to thrive. I wrote this post for those of you who are looking to thrive amidst all the chaos. Nobody knows how long this will last or what kind of damage will ultimately be done. What we can do is adapt and continue to build a great business in this new norm.
Focus on Cleanliness
There is no longer any place for poor sanitation at your establishment, in both the front and back of the house. There is now a new standard that guests will demand and anything short of that can be detrimental to your business. A slow-down in business can represent a great opportunity to get your staff ServSafe certified. While many states require only one member of the restaurant to be certified, getting most or all of your staff certified can help to boost a top-to-bottom overhaul of your sanitation efforts.
In a post COVID-19 world, a poor health inspection rating — or even worse, a shutdown for any health reason whatsoever — will be magnified 10x more than it was before. Take this time to establish new health standards and protocols, and then make sure that your customers know about your efforts. Doing something as simple as putting a sticker of cleanliness or approval on all your takeout packaging will send a clear message to your customers that you have their best interest in mind.
Build a Direct Takeout Program
Before COVID-19, off-premise dining was already growing 200% year over year. As of right now, it’s the only way many businesses are staying alive. People visiting your website is now the equivalent of them walking into your establishment. What do they see when they visit you? Can they order directly from you? Relying completely on 3rd party ordering and delivery services is going to widen the communication gap between you and your best customers. The worst thing you can do is send your diners to a platform where your unique brand is diluted and your diners may be end up ordering from someone else.
In a sense, creating a delivery program has never been easier and can be an effective way to keep your employees working. I speak with many restaurant owners who don’t do delivery because they’re worried about who is delivering their product, what kind of condition it will be in, or how their business will be represented by the driver. Given that many restaurants would like to keep their staff employed, beginning a delivery service can solve this problem. After all, who better to make the deliveries than the same people you put in charge to serve food to customers dining in?
Stay Open & Make Every Attempt to Protect Your Employees
Obviously, this is much easier said than done. Some restaurant owners simply don’t have a choice in the matter. For those that do, however, I strongly urge you to fight to stay open by any means possible. I truly believe that the next wave of great restaurants are being born right now, by those who are fighting and innovating their way through this challenging new reality.
By staying open, you will have the opportunity to keep your best employees. Making a commitment to their financial and emotional wellbeing now will pay long-term dividends for your business. Take Michael Lastoria, Founder of &Pizza, as an example. In the wake of the COVID-19 closures, he doubled down on protecting his employees by increasing hourly wages $1, providing discounted rides to and from work, and offering two weeks of “health and safety” pay for any staff member who even suspected they had coronavirus symptoms. What kind of message does that send throughout his company? Where do you think his employees stand on things like work ethic, brand loyalty, and commitment to the job? How does that make you feel as a consumer about visiting one of the &Pizza locations? Taking care of your employees is good for business.
Review Your P + L and Renegotiate any Business Activities that Aren’t Producing ROI
In a good economy, it’s easy to focus on increasing revenues while forgetting about being financially disciplined. Those times were great but they’re over. Where are your food costs at now? If the answer to that question makes you squirm, the first thing I would do is run a Product Mix report for the last year and make a commitment to simplify your menu by at least 10%. Talk with your food vendors (they want to talk to you!) and see if you can put a plan into place that can lower your food costs to a more sustainable level while still delivering a quality product. Are there any items on your menu that don’t travel well? Take them off for now as you focus on takeout.
Do you take part in 3rd party delivery apps? It’s no doubt a great way to offer delivery to a wider audience but make sure it’s a profit generating business unit within your restaurant. If you’re paying 25% for an aggregator service and your prime costs are above 75%, is that really making you a profit? Make sure that these programs are contributing to your bottom line and not just providing you with vanity revenue metrics.
Trimming the fat can be a hard but necessary exercise. Are there times earlier or later in your hours of operation that you can cut out? Talk with your staff to see what your food waste looks like. Take a look at your monthly statements and see if all your costs are significantly adding to the viability of your restaurant.
Right now is a point in time where your leadership and business will ultimately be tested. If you can persevere, you have the ability to produce some extraordinary results. Double down on your core strengths, focus on activities that matter, and make an attempt to thrive right now. I wish you health, happiness and the ability to flourish during these uncertain times.