How hospitality businesses can adapt during COVID-19 to ride out the crisis
As COVID-19 continues to have a global impact on the foodservice industry, Australian hospitality owners are encouraged to take some important steps to help them ride out the storm, writes SilverChef hospitality expert Ken Burgin.
Hospitality owners should be looking closely at their last P&L statement to see where the impact will be felt. If sales fall, how will that filter down to expenses? Some can be adjusted, like food costs and labour, but others are fixed, like rent and insurance.
Now’s the time for restaurant and cafe owners to become ‘numbers people’ in a way they usually aren’t. Their focus is usually on the menu, the customers and pushing out food and beverages.
Here are some practical tips and words of advice to help hospitality owners prepare for this unprecedented downturn in business.
- The new Jobkeeper program is your friend, but there’s paperwork involved and you need to nominate staff and prepare for them to return to work.
- Manage your cashflow – Jobkeeper payments are made in arrears, with first payments in early May. You need to pay people in the meantime from your own funds or with help from a bank. Juggling the cost of this could be a challenge.
- Keep communicating with staff. No doubt they will be anxious given the visibility of events across the news. You may not have good news to tell them, but they expect you to be fair. If you don’t have an internal communication system, like a private Facebook or WhatsApp group, now’s the time to start one.
- Be prompt with statements that staff need to obtain Jobseeker payments, if they’re not eligible for Jobkeeper (ie have worked with you for less than 12 months).
- If you’re overstaffed with staff for your reduced service times, don’t waste the opportunity. Now’s the time for lots of staff training and some really deep cleaning. Check the Typsy online training platform
- Ramp up the home delivery options. Whether it is using third-party systems like UberEats (if your margins allow these high costs), or encouraging pickup through your own online ordering page, offering a take away option is critical to keeping your business afloat.
- Upgrade your pick-up and delivery space. People want ‘no-contact’ collection, i.e. touch payments and hygienic packaging..
- Be sure you practise the highest standards of cleanliness throughout the kitchen and preparation areas. Share this with your customers to build trust.
- Blitz your office and admin systems. There is no time for waste and inefficiency. What can be done online that’s still done with paper? What can be done remotely – rostering, payroll, ordering, social media?
- Improve your communication with customers. Customers may not know what you are offering with in venue dining not available across the country. In this climate, daily updates on Facebook and Instagram are not too frequent, and an interesting weekly newsletter will be welcome, especially if it comes from the heart. Use a lot more photos of people, not just food – customers look to their local cafe or restaurant for comfort and friendship, and social posts with real people will get a higher open rate.
Other things to consider
- Talk to suppliers about deliveries and availability of products. Your orders will be down, and they may have their own staff issues to worry about, which can affect the regularity of supplies.
- You’ll need to handle creditors. Figure out which ones will be tolerant, and who can you negotiate with. They’ll be facing their own problems, and some have closed.
- Talk to your accountant about tax and bill payments and see what they can negotiate with the ATO. You also need good bookwork to back up your Jobkeeper claims and other grant applications.
- Talk to the landlord, ideally through your lawyer about rent reductions under the new Mandatory Code of Conduct. Concessions are available, but you will need to negotiate.
- Check the support grants available form State and Local government – a quick Google search will show what’s available, and some are quite generous. The sales and figures you are using to justify Jobkeeper funding can be used again.
- Join shared marketing programs like #SaveHospitality – an opportunity to use the leverage of hundreds of other restaurants and cafes, connecting you with the customers who want you to succeed.