COVID-19 and restaurant business continuity, How restaurants can respond to the coronavirus outbreak and stay in business
March 16, 2020 • 11 minutes
The dramatic downturn caused by the pandemic of coronavirus is challenging every restaurant operator regardless of their size and business model. Restaurants start closing temporarily either in response to low foot traffic or lockdowns. The viability of your restaurant during crises depends on how good you are in crisis management and how fast you can make the right decisions.
With the fast spread of the virus, the situation is changing quickly. Online media are covering the latest news. Official bodies are publishing industry-specific COVID-19 resource centers to guide businesses on how to cope with this public health emergency. Restaurant industry experts are putting their heads together to develop action plans for restaurant operators.
Business owners should stay on top of what’s going on in the countries that faced the problem among the first to predict possible scenarios for their own restaurants. Your team should be well informed to develop your own restaurant survival guide to ensure your business continuity. Here’s what you can do to help your restaurant stay in business during the next half a year.
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Do your best to protect your restaurant workers' health, welfare, and safety
The coronavirus outbreak puts people working in the foodservice industry at risk. Being responsible for your employees, you should ensure your team is informed and aware of what to expect and how to act. Strive to communicate your intentions and decisions openly and provide your employees with regular updates.
Set up a system and day-to-day procedures to protect, monitor, and track the health and safety of your staff. Everybody in your team should follow the safety rules and ensure their actions or inactions don’t cause harm to themselves or others.
Some members of your team may prefer to stay at home to protect themselves and avoid getting infected. They may take unpaid leaves. Employees with no childcare options may also have to stay at home with their children because kindergartens and schools are closing. As your employees health is at risk, at some moment people may take sick leaves. With a dropdown in sales, you'll have to offer some of your employees paid leaves.
If you see that you have to close your location and send everybody home, think carefully what leave benefits to offer your employees. The financial support you give will define your chances to get your team back and revive your restaurant after everything gets back to normalcy. There won’t be any easy solution to the upcoming challenges with stuffing. People are scared by the perspective of losing their jobs or not being able to earn enough money. You'll have to reconsider your leave policies for employees and be very attentive for not to violate your restaurant workers rights.
Some restaurants may need to address the staffing problem creatively. What if you offer you waiters whose workload dropped to temporarily become couriers and take care of your delivery orders? Anyway, experiencing financial difficulties is inevitable in such situations and all members of the team should realize that. Big chains provide their employees with a catastrophe pay in case they get infected at work, or paid health leaves in case the locations they work in have to close for a quarantine. Together with your team, you can work out your own solution to support your people financially during those hard times and retain them.
Calm down coronavirus hysteria and prove it’s safe to dine in your restaurant
Sit-down restaurants fall in the category of high-risk environments along with stores, cinemas, and stadiums. With rising concerns about eating out more and more of your customers would decide to avoid going to restaurants. To get the foot traffic needed for you to stay in business, you should take extra sanitary measures and demonstrate this to the public.
QSR Magazine has published the results of a survey on what customers think about restaurants and coronavirus. From the results of the survey, you can derive recommendations on extra sanitation measures you can take in your restaurant to meet your customers’ expectations.
Seeing the restaurant staff wearing safety apparel and visibly whipping all things that people usually touch in the dining room would convince many customers that you approach sanitation responsibly. Asking the hostess to open the door for guests to let them avoid touching the door handles may also help you differentiate.
However, the most important is that you follow strict local public health guidelines. Hopefully, you have your safety protocols and best practices in place. Now you should contact your state and local health departments for the latest advisories about coronavirus. Knowing the latest recommendations, you’ll be able to instruct employees accordingly, update your cleaning and sanitation checklists, buy the most effective disinfectant products.
Rely on pickup and delivery orders to cater to people who practice social distancing
If you operate in a big city, people in your area may opt for food delivery not wanting to go to public places. While limiting dining-in or banning it, the government in your country can encourage restaurant takeout and food delivery services to remain fully operational. Third-party delivery services you partner with may reduce their delivery fees for this period and introduce no-contact drop off service that excludes the need for direct contact between customers and couriers.
On March 13, 2020, GrubHub announced the decision to suspend the collection of commission payments from independent restaurants to help them stay in business during the ‘coronacrisis’.
However, many people may think that ordering food delivery gives a false sense of security and the expected spike in food delivery may either be short-term or not happen at all. Even without coronavirus there always have been some concerns about the safety of food carried by couriers. Today we experience the situation when drone delivery could be a better option.
Restaurants with drive-throughs can probably count on the increase of orders from customers who would like to continue ordering from restaurants but don’t want to touch anything but the package with their food.
Minimize loss if you close your dine-in location because of the COVID-19 lockdown
The restaurant industry in many areas is facing the worst-case scenario, which is a complete lockdown and collapse of sales for a period from two weeks to several months. In this situation, many restaurants can fail and people working in the industry can lose their jobs.
Radical measures taken by China helped the country to stop the exponential spread of the virus. The Washington Post published an article about a simulation that demonstrates the effectiveness of social distancing which requires closing public places. Governments of Italy, France, and Spain have already taken nation-wide measures to stop the fast spread of coronavirus. Chances are such lockdowns become a go-to solution.
How can you minimize loss for your restaurant business in such circumstances? If you see that everything comes to a lockdown in your area and it’s a matter of days, you can take the following steps:
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Reduce your menu to minimize purchases and rationally use products you already have in stock. Build the new menu around the food that travels well and is often ordered for delivery. You can do it in delivery POS.
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Elevate your pickup service and delivery service if the local government doesn’t ban these activities and you find it reasonable to operate in this mode. For this, you'll have to transform your kitchen into a safe delivery operation with using a dark kitchen point of sale system and suggest your employees to temporarily change their responsibilities, for example, become couriers or send them on vacation with compensation.
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Launch your own online order taking platform or use your social media accounts for taking orders to deliver your food without the help of third-party delivery services that most probably will be overloaded.
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Freeze the products and food that can be preserved this way to minimize product waste because of slow usage.
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If you close your location completely and have to send your staff home, agree with your employees on the compensation you can pay them. If you're short on cash, you can suggest your employees take the products stocked in your restaurant home.
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Inform your customers about your plans via your social media and website to show you care about them, reduce the uncertainty, and clarify what, when, and how they will be able to order from you.
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Focus your marketing on communicating that your food is safe to eat. Create a landing page on your website that explains what steps you take to ensure safety when you receive products from suppliers, cook, package and deliver your food.
Lockdowns caused by coronavirus represent an unprecedented challenge for the whole foodservice industry. This situation requires governments and the private sector to take action and help out restaurant operators. Restaurant industry experts engage with states and local governments to inform and support restaurant owners. You can check coronavirus information pages that are published and continuously updated by The National Restaurant Association (U.S.), Restaurants Canada, and similar organizations in your country.
Ensure your business continuity after the quarantine is gone
You should gather your management team and analyze the business impact of the crisis to determine if you should stay open or shut down temporarily and make a plan on how to mitigate the negative consequences.
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Determine the minimum acceptable service levels, identify critical vendors and utilities that ensure your ability to function.
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Identify the core people who will keep your business running and calculate employee-related costs.
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Find sources of emergency financing to cover your expenses and loss and find out how your government is going to support businesses.
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Develop your business continuity plan and inform your staff.
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Keep customers updated about the status of your business and when they can expect your operation to be restored.
Governments should respond to the harm the coronavirus outbreak caused to the food service and other industries. Check if small businesses severely impacted by the crisis in your country would get a temporary reduction or elimination of taxes or be able to take low-interest disaster recovery loans. Here some other ways of reducing expenses you can try:
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Get a debt payment break in your bank.
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Ask your landlord to give you a one or two-months rent holiday because nobody will rent your place anytime soon if your business fails.
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Ask your restaurant POS system and other software vendors for crediting the subscription fees or freezing your accounts temporarily.
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Participate in state business recovery programs.
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Ask suppliers, franchisors, and other institutions that receive regular payments from you for payment delays, fee reductions, or other solutions.
You should face it that the traffic in your location will plunge. Will it be 30%, 60%, or 100% down it depends but anyway no one is safe from seeing empty tables. Restaurants have thin margins therefore you should take every step you can to optimize your operations and retain your restaurant workers.
