As various states begin to discuss lifting shelter-in-place orders, it’s imperative for restaurant owners to be prepared to open their doors in the near future. Prior to when restaurants reopen and patrons arrive for dine-in services, it’s a good idea to understand the industry landscape, revenue opportunities, and how to set your restaurant apart from other local spots that are vying for customers’ attention.
Utilize the Paycheck Protection Program
The Coronavirus Aid, Relief, and Economic Security (CARES) Act assigned $349 billion to aid small businesses in their efforts to pay employees, cover overhead costs, and keep their operations running as smoothly as possible. These initial funds were depleted on April 16, 2020, and an additional $310 billion was added to the CARES Act’s funding under the Paycheck Protection Program (PPP) and Health Care Enhancement Act.
The PPP is directly applicable to restaurant owners and offers 100-percent federally guaranteed loans to qualifying small businesses that have been impacted by COVID-19. A main highlight of this program is that the portion of loan proceeds used for allowable expenses during the crisis is 100-percent forgivable, as long as you have the same or larger number of FTEs on April 27, 2020, as you did on February 15, 2020. Also, 75 percent of your PPP loan must be used to pay your staff (tips included), even if your restaurant is currently only accepting takeout/delivery orders, and 25 percent can be used for mortgage interest, rent, and utilities. These employee-centric funds can allow restaurant owners to put the necessary measures and staff in place to prepare for a full opening in the future. This can include hiring back employees that have been furloughed, cross-training positions, and more.
To learn more about the CARES Act and Paycheck Protection Program, download our free e-tool, “Restaurants’ COVID-19 Emergency Loan Guide” and check out our blog, “How to receive 100% Paycheck Protection Program loan forgiveness.”
If your business does not qualify or was not able to receive the PPP, it’s a savvy move to pare down your expenses to the absolute essentials in order to remain as fiscally lean as possible during these unpredictable times. This may include only keeping on management and senior employees with diverse skillsets during this time. You can cross-train your staff to work various positions such as takeout and delivery to ensure they are making enough money per shift to warrant coming back from unemployment.
Explore delivery options to drive additional sales
Shelter-in-place orders remain in effect in many states, and even when they are lifted restaurant occupancy rates will most likely be at 50 percent or less, making it vital for restaurant owners to seek other avenues of revenue to offset the profit losses from their usual dine-in customers. The most obvious solution is to offer takeout and delivery, as there is no evidence of coronavirus being transmitted by food or food packaging, but this can be a daunting undertaking for some businesses. While it’s of course ideal to set up your own in-house takeout/delivery service to retain all of the profits, this can require additional resources that may not be viable at this time. In this case, restaurant operators can utilize third-party food delivery partners. From the big names to more niche services, there is a takeout/delivery technology to fit practically any restaurant owner’s needs. Check out the pros, cons, and pricing structures for some of the top app choices in our e-tool, “Navigating Third-Party Food Delivery Services.”
We understand that in the current economic climate third-party apps’ commission rates and fees may be too much for some restaurants’ bottom lines, but unfortunately there’s no telling when occupancy and revenue numbers will return to normal. This means that restaurant owners need to seriously consider offering a delivery/takeout option during COVID-19 to stay afloat financially and to maintain brand recognition and loyalty.
Small marketing tips and tricks can go a long way to preserve an establishment’s brand and connection with its customers when fulfilling orders placed on a third-party app. Ideas include:
- Placing a “thank you” flyer into each to-go order bag—this small gesture can go a long way these days.
- Educate customers via your website, social media pages, etc., that if they place takeout/delivery orders directly from your restaurant (if feasible) vs. a third-party app they will be offering even greater support to your bottom line.
- Include a special offer for an appetizer or dessert with each takeout/delivery order to encourage future business.
To learn even more about turning delivery app customers into your customers, read our blog, “Navigating food delivery & third-party apps during COVID-19.”
Align supplier orders to your new normal
As a business owner, there are many moving parts to consider when leaning out your operations during the Coronavirus era. One such area to review is your supplier orders. A good first step is to meet with your rep and decide which items are necessities that still need to be ordered each week and which can be cut from your tab completely. You can research if there are any products available similar to what you’re currently using that may prove to be more cost-effective and less labor intensive to improve your return on investment (ROI). Then, determine how/when you’ll pick up your orders — one delivery per week, picking up smaller orders at the center’s location a few times a week, etc. because times have also changed for your suppliers and their vendors too. Also, you’ll want to work with your suppliers and partners to establish a rebuilding plan to ensure your business is able to get current on any outstanding accounts payable items.
As you plan your orders, a good cost-saving mentality you may want to adapt is to pivot to a limited menu that only focuses on your restaurant’s most popular items with the best-margin offerings that don’t require intensive preparation time. This way, you and your staff can concentrate your efforts and dollars on the food and drinks you already know work and garner revenue rather than spreading resources too thin or trying to create new dishes. Keep in mind that your biggest sellers may not always have the best profit margins and vice versa. Once you unearth the winning formula and combinations you can see optimal ROI with the lowest amount of supplies/labor costs.
Communicate effectively to your customers
There are many unknowns around the timing and regulations that will be imposed upon reopening establishments for in-restaurant dining. We recommend you research the latest news and guidelines specific to your state or city.
Prior to officially opening for dining, it’s very important that you maintain or restart a line of communication to your patrons. Some restaurants have been focused on takeout and delivery, while others need to reopen after being closed a few months. Below are best practices and approaches that will help keep you top of mind once you’re gearing up for dine-in service.
- Website: Your restaurant’s website is a powerful vehicle to deliver pertinent information and updates to your customers. As diners prepare to shift from ordering in to going out to dine, or a combination of both, they will be looking at your restaurant’s website to check for updates. Place prominent information such as changes in hours, how to make reservations, dine-in/delivery protocols, and donation page links front and center on the homepage of your site.
- Press Kit: To encourage media coverage of your restaurant, you’ll want to make it as easy as possible for the media to access information about your restaurant in one place. Create a press page on your website that includes logo files, photos of your menu items, contact information, staff bios, and any other components that may set your business apart from neighboring competitors.
- Social Media: It’s a good idea to remind your followers a couple times a week that you’re open for business via delivery, takeout, etc. Post about any special deals and include photos of enticing dishes to encourage orders. You can also drop a note once a week to your audience explaining the health/safety precautions your restaurant is taking during COVID-19. Crafting posts that ask followers questions through a poll, prompt them to enter a contest, or ask them to post photos enjoying your food/drinks is an effective way to spike engagement.
- Email Campaign: If you have a database of patrons’ emails, now’s the time to send an update on how the restaurant is doing and what plans are in the works. Showcase any new or future guidelines and systems that will be in place to give diners a sense of education, comfort, and understanding before walking through your doors. You can also remind them of any special deals and promotions you’re running now and/or upon the restaurant’s reopening.
- Public Relations: Your local news media is a great tool to showcase what you’re doing and how you’re maintaining business prior to reopening. To get the media’s attention you’ll want to have an interesting angle to tout such as donating part of your delivery order proceeds to charity, taking exceptional care of your staff during COVID-19 in a unique way, or a heartwarming community story your restaurant played a part in. It’s a good idea to also stay close to your vendor reps and partner contacts so you can capitalize on any publicity opportunities that may arise such as being featured on “Best of” lists or recipe roundups.
Get creative to garner revenue
As some states begin to lift shelter-in-place orders, put your team to work brainstorming creative ways of catching eager diners’ eyes for when your time comes. Although people may be hesitant to congregate in large gatherings, they will most certainly be eager to get out of the house, enjoy nature, and return to some semblance of “normal.” Check out the below initiatives that can put your business one step ahead of the game when the shelter-in-place order is lifted in your area.
- Curate a to-go picnic basket: With parks and beaches starting to open up, a ready-made picnic is smart offering for any restaurant. Compile your best easy-to-eat options and a few refreshing beverages along with to-go containers, cups, and cutlery in a branded basket for a set price. People are excited to enjoy the outdoors during these times, and now they can enjoy their favorite dishes from your restaurant too.
- Build a themed menu: Ride the coattails of a new, popular, or cult classic TV show or movie by offering on-theme dishes from ingredients you already have for delivery and takeout. You can even raise the stakes and encourage customers to share a photo of themselves enjoying their meal while binging their favorite show.
- Share your skills: You can offer deconstructed versions of your most popular dishes (cocktails too if it’s allowed by your state) and go live on social media to host a virtual cooking class. Step-by-step and/or time-lapse cooking videos are a great engagement tool for any restaurant’s social presence. Also, encourage participants to share their final creations and tag/follow your page.
- Host a game night: Take virtual game night to the next level by including bingo cards with every takeout/delivery order. Then, pick one night a week to host a virtual bingo game on your Facebook or Instagram live. Not only can this idea spur more takeout/delivery orders, but it’s an easy and effective way to stay connected with your customer base.
Plan for the new normal
This global pandemic has undoubtedly fueled a host of unforeseen challenges and roadblocks for the restaurant industry. As a business owner, it’s essential to not only understand the shifting industry landscape, but what opportunities and assistance are available specifically for your restaurant during this trying time. Restaurants can then begin to plan for and test different strategic approaches, gleaning valuable customer and business insights, in preparation for opening their doors to welcome back patrons in the future.
To discover even more restaurant marketing tips and tricks that can help your business during COVID-19 and when your restaurants reopen, download our free e-tool, “Coronavirus Era: 13 Restaurant Marketing Tips.”