%20(1).png)
Times are tough for restaurants and they do not look to be getting any easier in the coming months. Here are 10 strategies you should consider to grow your sales, reduce cost, retain your staff and save your restaurant during COVID-19.
1. Cross Train Staff
Undoubtedly, due to COVID sales have dropped. In restaurants your largest expense is labor and food. In order to survive your employees must know more positions and be able to flex between front of house and back of house based on volatile sales and business needs. Servers must know how to cook and cooks need to learn how to serve.
I call this my One House Philosophy. Forever the front and back of house have been in a type of cold war over control and who is right and wrong and who deserves higher pay. It‘a similar to the blue vs white collar debate. Right now and forever you are an essential employee. Remember that.
In today's restaurant climate we must not fight with each other. Instead, we need to band together to support one another in providing better service to the customer, with high quality food while remaining safe.
2. Start a Grocery Business
This may seem odd. In restaurants we take this for granted being able to purchase cheaper food and supplies than you can purchase retail. Turn that around and provide a service to your employees and community by stocking items people and businesses need around you.
We are seeing a trend where restaurants are being hit with stricter guidelines than grocery stores. This may provide a gray area for you to operate to extend your business hours, increase sales and help those in need.
3. Meal Prep and Meal Kits
You are now seeing this become more popular than ever before. Families are finding themselves home with their kids and parents struggling to prepare a solid meal between their work, being a teacher, parenting, quality time with their partner all while attempting to retain a small amount of personal time. Everyone is exhausted!
Restaurants are starting to sell semi prepared meals that customers can follow a quick and easy recipe to prepare a single or family style meal at home that is nutritious and less hassle than going to the store. Consider your niche and stick to it. If you make pizza, make a pizza kit or calzone kit. If you are an Asian concept, stick with quick stir fry or soup dishes. Don't forget to make this family friendly or theme driven. Make this an experience!
Why I lump these together is because meal prep can be as simple as essentially a curated box of fresh produce, proteins and other key pantry items. Think of it as your business is now the customer‘s personal shopper at one side of the spectrum and the other side you have pre-portioned meals that are fully cooked and microwaveable making them ready in minutes being the customer's personal chef. While in the middle you have meals that some assembly is required but simple enough anyone can do it.
Give this a try, your customers and bottom line will thank you!
4. Ghost Kitchen
This I think is a huge potential where many are missing the boat. 3rd party apps like Uber Eats, Grubhub, and Doordash has created a market place that voids the need for brick and mortar restaurants.
Creating a ghost kitchen is where you create a brand that is solely for delivery and/or pick up only. You may use the kitchen you already have, the employees are already there and instead of presenting one restaurant to your customer you could present one or many more depending on the size of your kitchen.
You can build a brand with a new website, marketing collateral and just set up the 3rd party apps. Companies are starting to pop up that are focusing solely on ghost kitchen. A company named Cloud Kitchens, started by ex-Uber CEO Travis Kalanick, is attempting to be the market leader in this space.
5. Menu Simplification
This may go in contrast to the the above point but there is a key point I would like to make here. Stop trying to be everything to everyone and get rid of your low velocity menu items. Re-engineer your menu to be lean, mean and focused on high velocity items. If you sell 1 a day... gone! If you sell 10-20 a week... gone! This is not the time to hold onto the items that tie up money, creates waste and doesn't generate cash flow.
I think of the Cheesecake Factory with its pages and pages of menu items. That is not going to work today. Get focused and do it well. You may only have one shot to impress a customer. Don't waste it.
6. Alcohol and Non-Alcoholic Beverages Kits
Many states liquor control boards have loosened restrictions on delivery of alcohol. If your not in this space and you have a liquor license. Get to it! Time to start mixing up some drinks and create specialty alcohol and non alcoholic beverage kits. The least you could do is start selling some beer or wine by the can or bottle but don't miss this low hanging fruit.
Feature your signature drinks and get on social media and show the world what you have! We will take more about this in a second.
7. PPP
PPP or also known as the Paycheck Protection Program is a program offered by the SBA and your running out of time. It has been reopened only till August 8th, 2020. This program I could write a whole blog on itself. The general idea is if you retain or hire and hold onto employees past a specific date this loan can be forgive on a sliding scale up to 100% and the remaining funds are a low interest loan. This could be free money for you. Easy to apply. Go get it!
8. Rent Negotiations
You‘re not the only one hurting. Another huge expense for a restaurant is the rent or mortgage. This is a complex area and is unique to each person’s situation but if you’re not at least talking to your landlord then you can't take advantage of some great programs that will support your business.
You could go the way of Cheesecake Factory and simply not pay rent. For many of us that is not an option. You may be one location, there may be local laws or lease terms that prevent following in Cheesecakes lead or you want to hold true to your value system.
The biggest advice I can give you is to keep the conversation going. Don't go radio silent. Be sincere, explain your situation and have the conversation. Many of the landlord and tenants are heading into a stalemate due to there being no clear direction from government and some cities issuing confusing guidance bringing the situation to a "wait and see" state. Illinois has basically cut rent due in bankruptcy by 75%. While in Seattle rent abatement has really muddied the water. Have the conversation!
9. Vendor Management
Just as landlords are hurting, so are vendors. Most vendors are willing now more than ever to extend payment terms. I know of many restaurants that were net 7-21 days and have extended to net 45 day terms or even greater.
When it comes to the world of food distribution a worldwide pandemic has just about took the industry to its knees. Many broadliners when COVID hit in late March were left with millions of dollars of inventory with no buyers and yet more inventory on the way. This rippled vertically through the supply chain to a point where we were facing a meat shortage due to lack of processing capacity in meat packing plants and shortages on items because vendors not willing to carry things.
Just as food is perishable, so is the supply chain. Many distributors are getting skittish when it comes to bringing in inventory due to the fact that if the USA or cities gets locked down again then they will be left with millions more of inventory literally rotting on the shelves. I do not believe we have seen the full impact on wholesalers yet but it is coming.
I have some strategies that will allow for you to extend your payment terms, reduce your cost and secure a stronger supply chain. We will talk more about these in later blogs.
10. Social Media and Online Presence
If you are not on Instagram, Facebook, Twitter, LinkedIn, Snapchat, Pinterest and/or have an archaic website...you are way behind the curve. These platforms used to be intimidating and unclear how to use them, however, with the evolution of the Internet you can create a great looking website and host it for less than $300 a year. Also you can be strategic on your marketing at a low cost.
Your goal with these platforms is to daily engage your customer around content that features and develops your brand while making it easy to order. Facebook and Instragram are making it really simple to post and market content at a very reasonable price. Due to customers being stuck at home they are getting plenty of screen time and less face to face time. Meet your customers where they are.
Lastly, manage customer feedback and comments. Between Yelp and Google you should be able to see your current businesses trend with customers. These platforms make it easy to connect, track and engage in service recovery if a customer had a negative experience with your restaurant. Make a daily routine of checking, posting and engaging in feedback with customers. It is well worth your time.
We are all in this together. I know running a restaurant is a grind. The long day and often thankless work at times can be a lot to handle but we all got into hospitality because we love to bring joy to customers and make a living while doing it. I hope these 10 strategies help save your restaurant. If you need help reach out! We can help!
Comments