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10 Steps for Restaurants to Survive the Coronavirus Crisis

March 23, 2020
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Scott

Dining rooms are closing, foot traffic is way down (through both government mandate and choice), and bars and restaurants are experiencing historic levels of uncertainty.

There is a light at the end of this tunnel, and to get there, bars and restaurants have to react quickly to the shifting hospitality environment. And the word shifting is important, because the demand for bars and restaurants hasn’t dried up. It’s just changed.

People still want your food. People are still drinking alcohol. The challenge is now getting it to them in society that must practice social distancing. Here are 10 things you can do right now, as a bar or restaurant owner or manager.

1. Reassure Customers

A global pandemic is scary enough, but a global pandemic filled with as many unknowns as the coronavirus pandemic is on a different level. The public is understandably scared—panic buying despite functioning supply chains is proof of that.

Restaurants that communicate to their customers and prospective customers that they’re taking this situation as seriously as them will be at an advantage. Even though the U.S. food service industry practices world-class hygiene and safety in regular times, no business can ride on the public’s assumption of that. To get business right now, you must get in front of people and let them know what you’re doing to ensure they won’t be at risk doing transacting with you. A good thing to let them know if that there is currently no known link between the transmission of coronavirus and food.

Use your social media accounts and email list. Communicate the actions you’re taking to protect your staff and your customers. Let everyone know how seriously you take disinfecting surfaces, and that you’re in full compliance with all current FDA, CDC, and WHO recommendations and requirements.

2. Rethink Your Concept

You may need to pivot on how you execute your core business to keep enough revenue coming in to remain operational. If you haven’t already done so, take a look at our four pivots bars and restaurants can make to minimize revenue loss.

Chances are your doors are already closed—mandated shut by your local government. And even if they’re not, foot traffic is likely not high enough to justify staying open. Staying open in the traditional sense, anyway.

Given that you have established and functioning supply lines, an operational kitchen, and skilled food service workers, you have all the ingredients to keep revenue coming in. Just not through a dining room. Options that involve little effort include leaning heavily into food and alcohol delivery (by signing up with DoorDash, Uber Eats, GrubHub/Seamless, Caviar, or Postmates) or establishing curbside pickup at your physical location.

Other options that may require a bit more effort are selling what you have as retail, offering prepared-meal delivery (like Freshly), or selling meal-kit boxes (like Blue Apron). Both options give your customers a way to have or make their favorite foods at home while staying engaged with your brand.

3. Look Into Financial Support

There are numerous ways existing businesses can mitigate some of their financial obligations during the coronavirus crisis.

  1. Deferred payments. Whether that means utilities or rent, companies and lenders often make hardship allowances. Call all of your lenders and utility companies and at least ask.
  2. Bar and restaurant relief funds. The Restaurant Workers’ Community Foundation is providing zero-interest loans to eligible impacted businesses. The U.S. Small Business Association is giving out low-interest loans up to $2 million to affected businesses. Other organizations are offering grants, networking opportunities, and more.
  3. Sell gift cards. Immediately infuse your business with cash for the promise of future goods and services. Check out the Dining Bonds initiative by SupportRestaurants.org for a simple program to get you up and running.

4. Adjust Your Menu

To reduce operating costs, you can scale down your menu to limit the amount of cash tied up in stock and limit how much stock you’re holding that can spoil. Doing so will pair well with a pivot to prepared-meal delivery or meal prep kits, since you’ll be preparing both of those using the same ingredients in large batches.

Also consider all-day menus. Just because you used to be a fine-dining restaurant that did most of its business during the dinner rush, doesn’t mean you have to stick to your guns. Desperate times demand desperate (and smart) decisions. Offering an all-day breakfast or brunch menu can generate more business for you, considering most people are working from home. Similarly, offering a late-night menu (paired with alcohol delivery if recently made legal in your city or state) may drum up more business from workaholics or others wanting to take the edge off the reality of social distancing.

Lastly, think about using a digital menu. Digital wine lists, for example, have helped bars and restaurants across the country become more agile and more sanitary. Any post-coronavirus menu is going to be digital. And that digital menu will probably be a QR menu because those are 100% contact free.

5. Upsell

Take steps to increase average check size. Many Americans are tightening their purse strings as the economy takes a hit. And that means cutting luxuries, of which eating out is often considered. That means you’ve got to make the most of each order placed. Whether that means the suggestive selling of appetizers or desserts or pairing premium liquor and high-end wines with entrees, upsell and make every transaction count.

6. Focus on Customer Experience

Give every customer the VIP treatment. Not only is it important to let every customer and prospective customer know you’re taking every precaution under the sun to combat the risks associated with coronavirus, it’s equally important to restore the joy and luxury that dining out provides that’s being diminished by the current situation. That doesn’t mean giving away the house, either. Sometimes a handwritten note is more powerful than a free appetizer or cocktail.

This may sound difficult to integrate with the previous point of upselling, but it’s not. You can offer upgrades and free things at the same time. The nature of reciprocity in human psychology is such that people are more willing to give you something (money for an upsell) if you give them something (a free thing). And if you make more on the upgrade than you lose on the complimentary offer, it pays an immediate dividend. To say nothing of the future dividend it pays from building good will.

7. Sell More Than Food

Encourage guests to spend money beyond food. This could be something as simple as alcohol delivery (some states now allow restaurants to bypass local liquor laws to deliver alcohol as long as they have an on-premise license), or selling gift cards, merchandise, and more.

Of note, merchandise can be a particularly fun, quick way to increase revenue. What is it that makes your concept unique? A memorable name or logo? A physical atmosphere or vibe? A unique fusion or chef-driven menu? Whatever it may be, look into creating apparel that leverages what makes your business remarkable. As long as your merchandise is in line with your company’s existing image and feel, customers won’t be confused about why you’re selling it or why they’re buying it.

Look into stickers, mugs, canvas bags, and t-shirts. To give you an idea of the margins, tee shirts cost around $3–5 per printed shirt for a couple hundred. You can sell them for $10 or include them with a $10 donation to your restaurant. Again, reciprocity.

Plan to Emerge Stronger

When this crisis ends, there will be opportunity. Many experts are predicting a “v-shaped” recession, which sees economic growth—after the virus is controlled—that mirrors the current economic downturn. For those who can stay solvent, optimizing operations, investing in employees, and fine-tuning marketing strategies are savvy strategies that can pay off big down the line.

8. Optimize Operations

Now’s the time to develop new recipes, reorganize your floor plan, negotiate better deals with suppliers, acquire the right restaurant cleaning supplies, and perfect your bar or restaurant’s operational infrastructure. Like restaurant cleaning checklists, bar cleaning checklists, SOP manuals, and more.

Of particular note, investing in bar and restaurant inventory management software will put you in a position to squeeze the most profit out of every transaction when you reopen. Use this as an opportunity to do all the analysis you never had the time to do. As a bar, for example, you can look at your sales numbers, ingredient costs, pour costs, and variance. Isolate what drinks have the highest profit margin and what drinks are most popular. Use that information to retool your menu so you’re in the best possible position when business resumes.

For our part, we want to help bars and restaurants get there. We're offering 90 days of free access to our flagship beverage inventory software, BinWise Pro. We'll walk you through exactly how it will help maximize profit along with providing a free menu analysis based on the data BinWise Pro generates. It has helped countless beverage programs across the country streamline inventory and boost profits, which could he a great help for a lot of businesses at the moment.

9. Invest In Employees

Your employees are your single most precious resource. When you’re able to open your doors again and start firing on all cylinders, you don’t want to start from square one. You need to invest in your staff so they come back even better than they were. 

If you’re in a position where you can’t keep staff on payroll, there are ways to make it as painless as you can for them. Here are a few ways to support your staff when downsizing or restructuring your bar or restaurant. And if you're not able to maintain staff, here's some information about how they can replace some of their lost wages.

That said, if you’re able to maintain a relationship with your staff and they’ve got the bandwidth to invest in their future, help them. Encourage (or even pay for if you have the means) wine-savvy employees to take online wine education classes. Refer your barbacks to how-to mixology series on YouTube. Introduce your server trainer to the ins and outs of restaurant inventory management. Put them in a position to excel when they return—and feel good about their career path while they’re on the sidelines.

10. Refine Your Marketing Strategy

Branding isn’t just for huge companies. All a brand does is allow you to communicate your value quickly and easily. If you haven’t settled on a brand for your bar or restaurant yet, this could be a good opportunity. Then, brand in hand, work on developing high-quality website and social media content that aligns with it. Rewrite your About Us page or your menu descriptions. Come up with some on-brand social media content that will drive visibility and engagement. (Here are some great examples.)

Use Creativity to Meet Demand

The theme of staying afloat during the coronavirus crisis is one of creative solutions to meeting existing, but changing, demand. Get your braintrust together, go over these 10 immediately actionable points and see what you can apply, what you can tweak, or what you should discard.

What works for one business will not work for all businesses, and successfully weathering the storm will require some amount of trial and error. But once you find a combination of the above tips that work for you, you may find the way you approach your business changes permanently. 

That’s because the possibility of succeeding and thriving in this environment is out there. If you can focus on what makes you special, refine your menu and minimize costs, and meet people where they are (at home, most likely), you could strike on a new formula that’ll change the way you look at your business forever.

All BinWise links can also be found in our coronavirus resource and information hub for bars and restaurants.