With some outdoor dining pilot programs coming to an end as we head into the winter months, tens of thousands of restaurants across the country will be forced to operate at a fraction of typical capacity without added outdoor seating to supplement the loss. Restaurant owners are being forced to find a way to make it through winter with vastly reduced revenue, and many operators are scrambling to reallocate budgets and manage staffing to survive COVID-19.
As a seasonal business, we must manage a budget that includes almost all revenue during those busy months and very little or no cash flow during the slow months. With slow seasons also comes the need to navigate seasonal layoffs and the task of hiring all the best people back the next season. These are very real considerations for restaurant owners and operators right now; over the years, here are four tips we have learned that that restaurant owners can apply to their businesses to survive the winter:
Use the Off-Season to Improve
Using the off-season to plan and improve your business product or service offerings can help you flourish during the busy season. Evaluate whether internal systems are running at their peak and identify opportunities to introduce new menu items or to open new locations.
Should you consider entering the food truck business? Does your dining room layout need a social distance inspired layout? Use this time to invest in training, develop relationships with potential clients and referral sources, explore possible acquisitions or new markets, and upgrade outdated technology.
Plan for Gaps in Your Budget
Managing cash flow can be difficult for seasonal businesses. An irregular fluctuation of income can very easily catch up to your bottom line, but this can be offset with the proper planning and management. Seasonal business owners should be consistently looking for ways to cut costs during slower times.
That said, restaurants didn’t have COVID-19 written into their budget at the beginning of 2020. It’s a good time to make sure you’re accounting for potential effects of the pandemic as you create next year’s budget. Explore areas where you can purchase supplies in bulk to cut long-term costs, consider raising prices where it makes sense, and work to improve discounts and payment terms with your suppliers.
Hire the Right People
Employee-focused culture can be rare within the restaurant industry. In fact, the industry had a turnover rate of 75 percent in 2019 and this trend was aggravated in 2020 by the pandemic. By prioritizing people, you can reduce your turnover rate and build a strong culture that makes for more productive, happier employees. .
The cost of re-hiring even hourly employees is about $3,500 per employee on average, and that cost triples when you think about manager level roles or higher. Recruiting the right people and investing in them from day one can save you the hassle of finding new people every 6 months.
Leverage Marketing Strategy to Remind People You Exist
It’s now more imperative than ever that restaurants are accessible online in this digital age. If competitors are easier to find and communicate with, your business could lose customers quickly. During COVID-19, restaurants need to be equipped to market delivery services and able to easily communicate fluctuating hours to their guests.
Investing in digital marketing efforts, prioritizing Google ads, SEO and paid social media advertising can go a long way to reach new audiences during this challenging time. Social media is also a key component to communicating quickly with customers, as Instagram has become a sort of customer service platform throughout the pandemic.
Make sure to post new offerings, dining set up, delivery operations, hours of operation and more on your social channels, and be sure someone on your team is monitoring and replying to inbound customer comments and direct messages in a timely manner as that’s an affordable way to create meaningful consumer relationships.
While COVID-19 may have presented additional challenges to the restaurant industry, we hope these tips can help restaurants continue to be agile and resourceful in the face of adversity.