(StLouisRestaurantReview) Restaurant owners face the most difficult challenges created by the COVID-19 pandemic plagued with capacity restrictions, scared customer base, political fears being discussed in the news daily.
It has been made clear that this pandemic will not end any time soon. Daily reports of new coronavirus variants surface much more contagious than the original, increasing economic challenges and much more.
Many restauranteurs are asking the same question; “how long can I survive?”
Truthfully, many restaurants will fail within the next few months. Economic relief has been a massive failure on the political front. Consumers are scared and confused about what is safe and unsafe, and so many more factors are killing the industry. Face it; the restaurant industry is not the only sector affected.
For many years most restaurants have experienced margin pressure and not making money before the pandemic. That is, if they had accounting procedures in place to know their overhead and food cost.
If you own a restaurant and struggling to find options for survival, we have created some suggestions that are critically necessary to survive. They are as follows:
- Hire a professional infectious disease disinfectant service company. Promote your clean and safe environment, but make sure it is real. Do not lie. Adopt a serious approach to following CDC guidelines for restaurants and hire a professional service company to ensure safety and promote it.
- Improve your accounting procedures to create live or daily profit and loss information to help you make better business decisions. We STRONGLY recommend that you use Quickbooks. Their cloud-based system will easily integrate with most banks and streamline your accounting accurate financial information. Additionally, they offer online help and guidance at a much more affordable cost than hiring an accountant or CPA. If you decide to hire a CPA, that does not guarantee timely or accurate data. They make mistakes and take shortcuts as well. Learn Quickbooks with professional guidance. Know your numbers! Knowing your numbers will increase your survival chances and help you make better financial decisions. This is the MOST important suggestion we offer. Know your numbers. Do not trust this to anybody but you. Nobody!
- Improving accounting will help you determine the correct price of menu items with fewer sales. As sales decline, profit margins will change, creating the need to adjust pricing. You can’t sell your way out of this problem, and low prices to generate sales are limited by capacity restrictions. Low prices are the worst idea to resolve this, and the temptation to follow this strategy should be avoided at all costs.
- If you lease your facility, hire a lawyer or real estate professional to renegotiate your lease terms. Trust us; you are not the only restaurant owners needing concessions from high lease payments.
- Reduce all expenses that you can. Keep minimal staff. Renegotiate leases. Shop food cost. Reduce food inventory to avoid excessive list that may go to waste as restrictions can be reduced at any time.
- Make specials relating to your highest profit margin items like alcohol, desserts, etc. But be cautious about giving away your profit margin based on volume.
- If you don’t offer online ordering or delivery, consider. Online ordering is a must even if all you offer is carry-out. Avoid paying third party vendors and providers for delivery and online ordering as they take a large portion of each sale. In some cases, their commission is great than the establishments’ profit margin. Internalize these offerings yourself.
- Do not be afraid or too proud to ask your customers for help. Create a GoFundMe page and use the funds raised to purchase food from your restaurant to give to charities or healthcare workers. People with money are happy to help if they are a fan of your establishment.
Accounting and cost-effective marketing will be the key to success during the pandemic and reach the highest success levels if and when the pandemic leaves us.
Challenge your creativity for marketing, cutting costs, improving accounting and procedures. These are challenging times. You can’t afford to sit back and cross your fingers that this will end any time soon. However, consider this; if the pandemic would end tomorrow, the economic damage will continue to challenge your establishment. Food costs, labor costs, property taxes, real estate taxes, and many more costs will increase due to the pandemic’s lack of revenue. It will take decades to work out of the economic challenges created by this incredibly damaging pandemic and political environment.
We wish everybody good luck. Email us if you have any questions at Marty@STLMedia.Agency.