Coronavirus & Restaurants: Surviving the Crisis

Stay Up-to-Date | Decide Using Facts

Kudos to Restaurant Business Online for reporting on the unprecedented impacts of COVID-19 on the restaurant industry.

Making it Through the Crisis | Daily Habits

  1. Communicate. Communicate. Communicate.
  2. Customers. Crew. Community.
  3. Clean up and catch up: keep people proactive and occupied.
  4. Cash. Cash. Cash. Focus on maintaining cash.
  5. Calm and Considerate.

Making Tough Decisions | Use Your Values

In times of crisis, tough decisions must be made. When in doubt, allow your company’s core values to guide decisions. Otherwise, ask yourself the following questions:

  • How do we help our:
    • crew?
    • customers?
    • community?
  • What can we afford to do or not do?

Make Time for the Big Picture | 4 Milestones

As a leader, step back from the day-to-day decision churn and think about the big picture. The exact timeframe of the COVID-19 crisis is unknown but we should plan for months not weeks. Operators have three to four milestones ahead of you:

  • Ending Normal Operations: This is the point where “normal operations” end and something else begins. This may have already happened for you because of a government mandate. You may be in this transition now.
  • Crisis Operations: You may remain operating in a limited capacity or temporarily end operations. Either way, there is hard work to be done. We do not have an exact timeline for when the next phase will begin. Avoid short-sighted decisions that will keep you from being successful later.
  • Restoration of Operations: This is the work you will need to do to reopen or transition back to normal hours/service formats as restrictions are lifted. You will be operating under a new normal with changes in staffing and neighboring businesses.
  • Returning to Normal Operations: In time — and with the right amount of grit — conditions will improve and you will return to normal operations. The exact timeline will not be known for some time.

Making a Go of It | Thrive in a New Normal

While many states have set limits on restaurant operations, including closing restaurants to dine-in service, many still allow for drive-thru, takeaway, curbside and delivery service. If you are currently operating, consider the following:

  • Be crystal clear on your available resources:
    • Which of your employees are able to work?
    • Are your suppliers operating as normal, and what precautions are they taking?
    • How will you know if you’re successful or unsuccessful?
  • Be safe:
    • Don’t transfer product or employees between locations.
    • Keep track of all illnesses by working employees.
    • Zero tolerance for safety, sanitation and wellbeing with your crew and your vendors.
    • Reduce physical contact with each other and customers.
    • Don’t have multi-unit managers travel from restaurant-to-restaurant.
  • Get ready to operate in a “new normal:”
    • Embrace reality.
    • Find margin, avoid delivery commissions, leverage workers.
    • Source tough-to-get supplies: packaging, disinfectant, etc.
    • Streamline your menu/processes to optimize the new experience.
    • Let go of perfection and meet customer where they are today.
    • What this looks like:
      • limited or focused menus
      • family-style curbside & delivery menus
      • limited service hours & formats
      • limited days of operation
      • adding takeaway or delivery

Read this article: Why Takeout and Delivery Could Save Your Restaurant.

Making the Toughest Decision | Save Resources

Drive-thru and delivery-focused chain restaurants will be in the best position to sustain through the coming period of customer self isolation. Others need to quickly adapt or begin a temporary shutdown of operations.

  • Help your team:
    • Speak plainly and from the heart.
    • Furlough, don’t fire.
    • Work with state agencies on unemployment benefits.
    • Don’t throw away unused food, freeze it or feed your crew.
  • Preserve cash:
    • Communicate with:
      • landlords; defer rent.
      • vendors; defer payments.
      • franchisor; defer royalties.
    • End all subscriptions and monthly fees.
    • Reduce hours and salaries. Pause or defer bonuses.
    • Re-budget 2020 with best, medium & worst case.
    • Think in months; not weeks.

Sample Restaurant Worker Layoff Notice
Sample Communication Reduced Hours, No Layoff

If your financial situation dictates a temporary shutdown of operations, make that decision sooner rather than later to preserve cash for the future. It is more important that our workers have restaurants to return to than than having short term wages.

Make a Plan to Reemerge | A Strong Return

Attempt to make every effort to make long-term decisions with crew, cash and community that enable you to make the strongest recovery possible in the future.

Check Your Coverage

  • Regardless of coverage, carefully journal every financial decision related to COVID-19 (extra expenses to adapt, changes to hours of operation, dates & times of changes to service format, government mandates that impact your business, etc.) This could be useful in the future.
  • Call your broker and have them summarize how your coverage views COVID-19 especially business income and workers compensation.
    • Is disease specifically excluded?
    • How does the policy view Civil Authority?
    • What are the key terms, definitions and provisions?
  • If you have business income insurance, notify your carrier of a loss and have them consider your specific circumstances.

Find Financial Aid

  • Avoid Scams
    • There will be scam, short term online loans. Avoid these at all costs.
  • Get Your Financial House in Order
    • Organize your business and personal tax returns.
    • Be clear on your current business debt schedule.
    • Proactively ask for increased lines of credit and/or payment deferments.
  • SBA Emergency Injury Disaster Loans (if applicable)
    • SBA will begin ASAP issuing Disaster Assistance Loans for Small Businesses.
    • Your state has to declare a disaster zone (so far: CA, WA, OR, ID, ME, NH, CO, MA, NY & RI).
  • Leverage an Existing SBA Lender (if applicable)
    • You likely can get a faster outcome but rates will be higher and payback will be faster.

Consult to Grow is here to answer questions and help your restaurant business survive through this crisis. Feel free to contact us directly or ask questions in comments below.

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