The COVID-19 pandemic has negatively impacted virtually every industry since it began back in March of 2020, especially the retail restaurant industry. The combined effects of America’s pandemic response, such as increased savings and social distancing measures, have forced many businesses to close some of their locations throughout the country, and others to shut down completely. Thankfully for companies in this industry, the $120 billion Restaurants Act of 2021 was introduced to Congress back in February of 2021. This bill was seen as pertinent to the recovery of the industry, intended to help companies weather the financial storms brought about by the pandemic.
This reintroduction came not long after the Senate unanimously voted to pass the amendment to create a restaurant relief fund. The bill pertained to businesses in the food service industry with less than 20 units. The operators of these businesses were eligible to apply for up to $10 million in grants that could be utilized to cover expenses incurred throughout the pandemic. The bill had a timeline of eight months once it went into effect and would be retroactive to February 15, 2020. This means that any expenses incurred after this date will be considered in determining how much each business will receive. However, any funds that weren’t spent within this time period would convert to a loan with an interest rate of 1 percent and maturity date of 10 years.
Executive director of the Independent Restaurant Coalition, Erika Polmar, previously stated, “Ensuring the 11 million people employed by restaurants and bars can continue to earn a living is vital to rebuilding our economy after this pandemic.” The passing of the bill would not only help save current jobs in the industry but would also help reemploy those who have been furloughed or laid off due to the pandemic. The bill essentially combined the bills from both the House and the Senate into one with language that both parts of Congress could agree upon. The Restaurants Act is not to be confused with the restaurant relief fund, a separate fund that was part of the budget resolution amendment.
After hearing the news regarding the Act, restaurant operators were sure to be eager to receive the funds. However, it was essentially that owners use these funds appropriately. Once restaurants received the grants, they should have first used the funds to get out of debt. They should have covered any employee or operating expenses incurred during the pandemic that have yet to be paid off. This would have allowed them to keep their doors open and continue operating.
After paying off any debt associated with their company, restaurants should have aligned themselves with an expert who could guide and help them pivot during these unprecedented times. Pivoting is key to keeping up with changing consumer demand and to ensure your business’s products and services do not become antiquated. They can advise different methods to innovate and advise strategies to operate differently to ensure restaurant owners don’t end up in this same situation should an event like this ever occur again. Examples of pivoting that many restaurants (who otherwise did not offer these services before) have already begun implementing include services such as online ordering, curbside pickup, and delivery. While many establishments have these services built into their existing business model, restaurants far and wide began implementing them once the pandemic began, choosing to shift with changing demand.
After getting out of debt and pivoting their company, the next step for restaurants would have been to set up additional profit centers to create congruent revenue streams. An example of this would be to create personalized, branded products that could be sold via an e-commerce platform. Other avenues include cooking shows and live music performances. Multiple profit centers help to diversify the company, minimizing operational risks.
Optimization of the aforementioned strategies could also result in increased sales numbers, which was the case for Cousins Subs. The company worked extensively with their online ordering vendor, Olo, to integrate features into their operations to increase the efficiency of the food ordering and pickup process. For instance, Cousins Subs implemented automated alerts to inform their staff when a curbside customer arrives. Increased focus on curbside pickup and online orders led to a 17 percent sales growth for the company year-over-year as of September 2020.
The Restaurants Act of 2021 proved to be just the boost this industry needed to get through the pandemic. Employees were able to stay on payroll and restaurants on top of their liabilities. The business landscape has changed dramatically since the pandemic began. Consumer demands have shifted, and financial hardships have set in. The Restaurants Act of 2021, coupled with the strategies above, were essential to the survival of many companies in the industry. If implemented correctly, these companies would have been able to continue building a sustainable, scalable, and sellable business and, if they want, to exit rich.
Michelle Seiler Tucker is the coauthor of The Wall Street Journal and USA Today bestseller Exit Rich: the 6 P Method to Sell Your Business for Huge Profit and founder of Seiler Tucker Incorporated.