Ten Tips for opening/re-opening a restaurant post pandemic
It's been difficult for many restaurants coming out of 2020. In a year like nothing else, we’ve seen in recent history the only past experience we can use to best understand how to come out of this situation are learning’s from past recessions or economic downturns. Common sense tells us that starting a business in hard economic times is a bad idea! Starting a restaurant in a global pandemic is even worse. Overcoming this challenge will truly define the entrepreneurs amongst us.
This post is about how to re-evaluate your strategy to assist with the opening or re-opening of a business during a pandemic.
1. Re-visit your market research
In the initial market research to open your business, you would have/should have included a complete market study that gives you an understanding as to why you chose that particular location for your business.
Some factors may have included what the demand generators are around you (cinema, tourist attractions, universities, malls, corporate office, etc). With the current status of many businesses, these generators may have changed. Some offices may have closed or reduced their “in-person” size, universities will not have students on campus, tourist attractions are shut down and it will take some time if ever before malls and cinemas come back.
The first approach would be to look at diversifying your customer base. The marketing team will need to re-evaluate the target audience and which new demographic they can now attract, above and beyond the past target audience pre-crisis.
2. Win the competition's customers
You must continue to expand your customer/client base if your business is going to prosper in tough times. This means drawing customers from your competition.
You must offer more value or differentiate your product compared to what your competition or neighboring businesses are offering. Research your competition, how are your competitor's advertising? Visit their business locations and find out what their consumers like or don't like about those businesses, then tweak your own business practices accordingly.
With the above in mind, evaluate the following:
What demographics have changed in your segment
Who can be your new target audience and how do you maintain the past audience that is remaining
Will you change the menu offering considering the consumer changes
What will be your new price point and value propositions
Businesses that are able to pivot are the ones set up to succeed in economically challenged markets. For example, adding home delivery to your business model, if you previously did not have it before, shortening the menu to favorites or items that travel well for delivery or reducing prices, or running specials to draw in new consumers.
3. Re-evaluate your menus
Menu engineering is "cracking the code" in getting the most perceived value from the food you sell. This allows you to set a price that pleases both your guests and your bottom line.
Know your consumer base; how have people's dining habits changed during the lockdown?
1. People will order more of their favorite restaurant dishes to eat at home rather than sticking with the common delivery foods like pizza or wings.
2. Home cooking has become more prevalent during this period. Possibly providing customers home cooking kits for some of their favorite dishes is an option.
3. Some dishes will be too complicated to cook at home so rearrange the menu to make those dishes prominent for consumers to order via delivery
Adapting your menu in order to generate more profit by analyzing the new customer demand, re-engineering recipes so that you use lower-cost ingredients without compromising the taste can increase your bottom line is what separates restaurant success from failure.
4. Re-evaluate your suppliers
Once your market study is complete, your menu is re-defined and your price point set, start negotiating with your suppliers whilst you have the power to ensure you obtain the lowest prices before suppliers start to ramp them back up. Be sure to build strong relationships with several suppliers so you are not left in limbo should they go out of business over the coming months. Also, consider switching to more local suppliers in order to reduce overhead costs.
5. Focus on your team and operations
Think about your operational systems before the opening/re-opening. You are now aiming to find a wider demographic coupled with the added tasks of more stringent hygiene standards and implementation of new policies.
Standards for cleaning the front of house, kitchen, restrooms, and general area that people constantly touch
How food is handled and rotated
How guests are greeted and seated, with the post-Covid situation in mind
Order flow and how orders move from the guest to the server, to the kitchen
Training standards and re-training the teams on product knowledge
Consider the technology and software systems that need to be updated to keep up with contactless capabilities such as no-contact orders, pick up, and/or payment.
With most businesses reinventing online ordering and improving technological presence, people rapidly acquired skills to take advantage of these features and feel much more comfortable with online ordering, contactless app payments, virtual cook-a-longs, and even happy hours.
6. Think about the team cohesion
The pandemic has more people out of work but for the businesses that continue, there will be more talent available in the market, which will give you the ability to recruit the 'A' team you have always wanted.
However, before considering replacing your existing team, think about stronger team cohesion. The more adversity your team endures, the greater value they associate with the experience and the higher their degree of loyalty to the team with whom they shared the challenges. Make the most of the situation and bring the team together.
7. Train the team and increase productivity
In the past, restaurants have had such a high staff turnover rate and it can sometimes feel like wasted work to train your restaurant staff, however, this can be nothing farther from the truth, especially during these times. The most important element you can add to your business is to ensure the consistent delivery of a high-quality guest experience by re-training your team to the specific standards of your brand.
8. Look for ways to trim your payroll
Learn to operate lean and mean now. Review your productivity reports and see who your superstars are. Invest in your top talent and get them focused on sales as well as cross-trained to help in other areas. This may be the time to lay-off or re-train low-performing workers. However, for the business to survive, which includes the lively hood of many people, there may be some difficult decisions to be made.
If you are not prepared to lay workers off, other options to augment payroll may include adjusting hours of operation and even closing a couple of days per week. For example, if Sundays and Mondays are typically slow, why not consider closing and running a 5-day operation for now. From your market study, if lunch trade will potentially be slow, look to multiskilling the team and reduce certain positions.
However don't make any sweeping changes to your staffing schedule until you see patterns arise as businesses, tourism and travel begin to return.
9. Invest in marketing
It is often understated how important your restaurant marketing plan is. Many businesses make the mistake of cutting their marketing budget to the bone in lean times or even eliminating it entirely, but this is exactly when your business needs marketing the most. Don't cut back on marketing, strategically plan where to spend the marketing bucks.
Now is the time to negotiate with certain platforms that may have been out of your price range. Communication is key. Tell your customers that you are open or have re-opened and offer them deals to welcome them into your establishment.
10. Be Frugal
Because of the downturn, make it a point to search for the best prices and the most efficient ways of conducting business.
The Bottom Line
Remember that it's temporary. Economies are a constant cycle of ebbs and flows. Plenty of businesses made it through the 2008/09 recessions and have flourished since. Nothing can guarantee success but implementing these steps can help ensure that your business survives the tough times and possibly even profits from them. It all begins with analyzing how you're doing things now and looking for ways to improve.