COVID-19 is changing everything about how operators reach customers.
This pandemic, COVID-19 virus, is crippling our industry. My heart goes out to you as you worry about your employees, your vendors, your family, and your community. I know one of the biggest questions you have is will your restaurant survive this crisis. What I have to tell you here should help you make some clear decisions.
Before you get too far into this, let me first be clear that the advice I’m offering here is for the week of March 16, with many cities and states shutting down eat-in options for restaurants and putting curfews in place. The advice you’re getting here right now could change drastically as new guidelines and/or city/state mandates are rolled out.
First things first. If you've been resisting or avoiding delivery apps like Uber Eats, Grub Hub, Postmates, etc., you can't fight them anymore. You need them because you're not in a position to hire delivery drivers.
As you bite the bullet or look at how to expand your reach, be sure to sign up for all four of the top delivery services in your marketplace. Looking at it nationwide, the top services are GrubHub, DoorDash, Uber Eats and Postmates. You need all four because every customer is not on all four. Preferences vary for your guests. If you use all four of them, you’ll reach more guests. The nice part is they are reacting to our industry. As of March 17, GrubHub, DoorDash and Uber Eats all waived their fees.
Next, you have to make it easy for your guests to order, to run in to pick up, and get out of there. Something that will help is to get your online ordering up and running if you haven’t already. Call your POS dealer and ask what application/service they recommend. You want something that integrates with your POS system and simply kicks out a ticket so you know it's going to be pickup and it's done. The other benefit is online ordering requires payment up front, so you’re not exchanging cash and guests aren’t touching keypads. This creates a little more safety for your guests and employees.
Hot Tip: If you're going to have guests pick things up, make sure you've got somebody visibly washing door handles on a routine basis and sanitizing hard surfaces. I don't care if that person for eight hours in a day is standing there and all they do is continually wipe down surfaces. You want to keep your employees safe and you want to show your guests that you take this seriously.
The next piece is marketing what you’re doing. In a good economy, in a good situation, telling your guests that you have curbside pickup or delivery, or anything, is hard enough. But today you must reach out, which means you have to bombard them on a daily basis—preferably multiple times per day on all your social media platforms. Let them know, “Hey, we're here. We're open. We've got curbside. We've got pickup. We've got delivery through these apps.” Ask your employees to share the posts and ask guests to share the posts.
For those of you who have been collecting emails over the years, that’s your best path for reaching your guests. Blast messages to your guests through an email or loyalty service. One of those messages should be what you’re doing to keep you and your employees safe: handwashing protocols, cleaning services, adding labor to just sanitize, whatever you’re doing.
An email list is also a fast-track to finding your guests on Facebook and Instagram, and any other key platforms for your guests, with ads that say the same things. People are stressed. They don't know they need to know you need to tell them.
If you’re not sure how to do any of this and no one on your team can help you in a pinch, I regularly recommend the following companies, none of which I get any kind of commission or kickback.
- Repeat Returns
- Moving Targets
- GoDaddy Social
The next thing to look at is proper packaging. If you’re new to delivery and pickup, you have to have the right packaging. I can tell you when I was a franchisor for a 30-unit restaurant and sports bar, we had the most amazing hand-cut French fries and pastrami sandwiches. They were perfect for dining in. But because we used Styrofoam containers for takeout, if somebody took it home, it was like a rainforest inside by time they got home. The fries were soggy, the bread was soggy and it was disgusting. It wasn't the same incredible product we put out in a basket. So, look at your packaging. It doesn’t matter how good it is in the restaurant if it sucks when it arrives at the guest’s door. That still represents you and your restaurant.
Also, when it comes to packaging, think about your demographic. If you have an environmentally conscious customer base, order biodegradable containers and paper straws and such.
The next important topic is your menu. If it were me, I'd be reducing my menu down to 10, 15, 20 items max. These items should be things that you know your guests want, things you can make over and over again. It allows you to reduce the amount of inventory you have on your shelves because you’re shrinking what you need to have on hand to fulfill the limited menu. This reduced inventory also saves you money because you won’t have food spoiling on your shelves. If you can get your inventory down and order on a more routine basis, when the product goes out it's fresh. You’re throwing away less product and whatever you put out is excellent.
Another idea is meal replacement options. Create and sell complete meals for a family of four or so and make it available for pickup to cook or warm at home. It’s also known as catering to go. Could you offer something like a lasagna and a Caesar salad that feeds four and has all the things necessary to put the meal on the table? Or a brisket with rolls and coleslaw and beans for four? What are some shelf-stable things that don’t have to sell in one day.
Another business stream is drop-off catering. There are businesses that are still operating that still have employees in their building. Can you provide them with some catering options, such as boxed lunches or a buffet with aluminum chafing dishes? Could you offer packages that allow them to quickly throw together a meal for a good number of people? If the minimum group remains numbered at 10, think about how you could break it up for 10 at a time.
Next on the list is budgets, and probably most important. I know it's a scary time and the last thing you want to think about is creating a budget. But the truth of the matter is how do you know whether you can weather this storm, whether you should stay open or not, that this isn't going to literally be the last day you operate if you don't have a budget?
Right now you need a 12-week budget. Forget about the year. You must lay out the next 12 weeks. Set it up with your new reality including sales from this week, minimum staffing and anything that is a fixed expense. What your costs of goods sold was running last week is not what you’ll see this week or the weeks ahead.
All of a sudden your sales have dramatically tanked. You have fewer categories to manage and still have a lot of labor. Even if you make huge cuts now, you’re going to have to make some adjustments and decisions. When is rent due? When are utilities due? How much do you owe the distributors? How much do you owe for payroll? Put it all in your budget and then create scenarios. If you remain open and your sales are X, what does it look like if you remain open and your sales are even lower? What does it look like if you close your doors? Even temporarily? When do you start deferring bills? Can your CPA help you decide if there are taxes you can defer? Employer portion of payroll taxes, sales tax? Is your state offering deferment options? You may work something out with your landlord for rent, assuming you're not behind already.
Ask yourself if you can dig yourself out if you make adjustments or if you’re in a bigger hole than you can handle. I'm hoping for you that there's a chance to restart and that this is an opportunity to put systems in place. I hope it’s an opportunity to cut the dead weight and look at everything you do in your business. I also hope the government comes through for you.
When I wrote this article, I went on online and saw that there are talks of a $1 trillion package for the hospitality industry. I've got to believe in my heart of hearts for the first time I've ever seen, that the government will help the hospitality industry, the number-one employer in the United States. We may actually get a bailout. But you can't count on that.
When it comes to borrowing money, whether it’s a no-interest loan through the Small Business Administration, or some other resource, ask yourself if that will really make it any better. The only way to know is to plug it into your budget based on your current reality.
I hope you are able to weather this. I hope you and your families are safe. I hope that you can keep as many employees employed as possible. I hope the economy jumps back in place. In the meantime, I’ll keep producing resources to help you.
David Scott Peters is an author, restaurant coach and speaker who teaches restaurant operators how to use his trademark Restaurant Prosperity Formula to cut costs and increase profits. His first book, Restaurant Prosperity Formula: What Successful Restaurateurs Do, teaches the systems and traits to develop to run a profitable restaurant. Known as THE expert in the restaurant industry, he uses a no-BS style to teach and motivate restaurant owners to take control of their businesses and finally realize their full potential. Thousands of restaurants have used his formula to transform their businesses. To learn more about David Scott Peters, his formula for restaurant success, his book, or his coaching program, visit davidscottpeters.com.