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COVID-19 Restaurant Crisis: Actions To Take To Survive

Please Note: NetWaiter’s platform is free for restaurants. To help attract more local customers and keep them informed with the daily changes going on at your restaurant during this crisis, restaurants can activate their custom NetWaiter site/app below, for free.

The restaurant industry is in a crisis due to the new coronavirus (COVID-19).

When the movement of people comes to a grinding halt, so do their wallets. As the financial shock to the U.S. and world economy unfolds, it will be brutal on small businesses and especially restaurants.

This crisis is very fluid and will evolve as the rules for doing business constantly change. While “best practices” may change daily, restaurants need to take IMMEDIATE action to minimize the overwhelming impact this crisis will have on them.

Here are 5 things restaurants can do RIGHT NOW to help survive the COVID-19 crisis:

1. Bring In ANY And ALL Revenue You Possibly Can

Restaurants are going to take a huge economic hit from COVID-19. To minimize the financial impact, you need to focus on any elements of your operations that can still drive revenue.

First – is a restaurant an essential business? If your area is ordered to ‘shelter-in-place’, only essential businesses are able to operate. Essential businesses include grocery stores and food providers, among many others that are needed to keep people safe and healthy. Restaurants qualify as an essential business, but are only permitted to provide takeout and delivery services.

With minimal or zero in-house traffic, you need to focus on your takeout and delivery operations. If you don’t have takeout or delivery operations – START NOW. This is critical, and will be for the foreseeable future.

Your focus on local customers right now is imperative. Thankfully, your takeout and delivery customers are your most loyal, so they’ll continue to order from your restaurant if you make it easy. Think about takeout and delivery customers when implementing your restaurant marketing ideas.

Safe Takeout and Delivery Practices For Restaurants

Customers need to feel safe when ordering from your restaurant while COVID-19 is still active. Make a point to earn your customer’s trust by keeping them healthy. Your cleaning and sanitation practices should be VISIBLE to customers and posted where appropriate. You should also consider offering curbside pick-up so guests don’t have to leave their car or enter your restaurant. Other suggested practices include:

  • Encourage electronic payments (vs cash)
  • Increase the cleaning frequency of high-touch surfaces like counters and customer-facing payment equipment 
  • Limit the number of people inside your restaurant and encourage social distancing if a line forms outside your restaurant

For delivery, implement a ‘contact-less’ delivery solution, so there is NO contact between your delivery staff and customers. This means your delivery drivers should leave the food outside, without directly speaking to customers. Arrange for payment in advance and communicate this process to customers so they know you’re trying to keep them safe.

If you don’t operate your own delivery service, it’s time to use third-party providers. Many of these providers (UberEats, GrubHub, DoorDash, and Postmates) have adjusted their fees to help restaurants through this crisis.

2. Sell Gift Cards To Bring In Additional Cash Flow

You’re going to need access to as much capital as possible in the near-term. Selling gift cards is a great way to bring in additional money and ease your cash crunch.

The additional benefit of selling gift cards now is that it will bring customers BACK to your restaurant once things begin to improve. You can also consider selling gift cards for a slight discount with takeout and delivery orders. For instance, you can include a $25 gift card for $20 with the purchase of any takeout or delivery order.

3. Maximize/Minimize Everything

Employees

It’s important to be candid with your staff at this time – they will be financially impacted too. Be upfront with them so you can get through this together.

In the beginning phases of this COVID-19 restaurant crisis, the need for servers are minimal. But, can they make deliveries for you? Or, can they help in the kitchen? Figure out where you can best use your staff to maximize their benefit. If you simply don’t need them some days, send them home.

If you aren’t able to pay an employee, terminating them might be the best financial option for everyone. Terminating an employee will allow them to collect unemployment. This will provide them with critical financial support they need.

Operations

Adjust your hours. Maybe your restaurant doesn’t need to open as early or stay open as late. If your restaurant is not offering (or not allowed to offer) dine-in service, you won’t have the same opening/closing procedures. Adjust and adapt to save money.

Rent

If you feel compelled, contact your restaurant’s landlord and request rent relief. Your landlord wants to keep you as a tenant. Explain the situation and ask your landlord to accommodate with some immediate rent relief. Negotiate what you think is reasonable and thank your landlord for accommodating you during this restaurant crisis.

Business Interruption Insurance

Check your insurance policy. If you have business interruption insurance for your restaurant, you may be able to receive financial assistance. This type of insurance covers income lost in the event a business is halted (i.e. during a natural disaster). But, coverage might also apply if government actions cause operations to cease temporarily. With state and/or national directives to close restaurants, your business interruption insurance might be able to provide you financial relief.

Relief Funding and Aid

Relief funds have formed for restaurants and food-service workers. These are some programs, available to restaurants, bars, and restaurant employees all over the U.S.

The National Restaurant Association has released information about the “CARES Act” with these Frequently Asked Questions regarding the benefits for restaurants.

The U.S. Small Business Administration also has some resources and guidance to help restaurants get financial assistance and access to loans.

4. Stock Up On Packaging

Your restaurant will need additional takeout and delivery packaging during this COVID-19 restaurant crisis. Be prepared and have enough supplies on-hand to process your takeout and delivery orders. If your takeout and delivery sales will be your restaurant’s lifeline for awhile, make sure you have what you need to make every sale possible.

5. Encourage Large Takeout And Delivery Orders

You need to motivate customers to buy as much as possible. You can encourage people to place larger orders by including a free item or appetizer with orders over a certain amount.

Packages also work well. A well-priced family dinner package, with everything needed to feed 4+ people can make a family’s dinner decision easy. An easy and affordable dinner option is sure to drive customer interest and sales.

Additionally, in some cities, restrictions are being lifted on alcohol sales for takeout and delivery orders. This allows restaurants to sell alcohol with off-premise purchases. You should take advantage of this and sell as much inventory as possible. Even if you’re selling beer or wine at cost, you’re still collecting revenue to cover the sunk costs of your alcohol inventory.

Looking Forward

We’ll get through this, but things will be different on the other side.

Customer habits will change due to this crisis. The exact changes aren’t known yet, but restaurants need to be prepared to adapt to new customer trends after restrictions begin to lift.

Will customers feel comfortable dining in a crowded restaurant? Will customers simply dine-out less (vs takeout/delivery)? Restaurants will need to keep an eye on customer habits as we move towards a ‘new normal’.

Now is the time to evaluate your operations. What aspects can be streamlined? Restaurants should look for ways to be as efficient as possible. When we come out of this crisis, you’ll need to be as competitive as you can. The economy on the other side is not going to be the same as it was before the crisis began. Take the opportunity to eliminate anything that wasn’t working well to help improve your margins.

While everyone else remains in a reactive mode, you might find a competitive edge by operating in a proactive mode.

In Summary

This crisis is difficult for everyone. Be kind to those in your community and your employees. Somethings are simply out of your control. Try to only focus on aspects you can control during this crisis. 

Also – be thankful for what you have. Your community will rise up to support local businesses and, even though it’s a really difficult time, be thankful for all of the support you get. Tell customers how much you appreciate their business and motivate them to order as frequently as possible.

Adapt as best as possible. We’re all in this together.

Activate Your NetWaiter Site

To attract more local customers and keep them informed about your restaurant during this crisis, you can use NetWaiter’s marketing platform and network for free. Search for, and activate, your restaurant for free here:

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