The holiday season is upon us, but while retail brands are hopeful for an uptick in sales, restaurants typically face a decline in diners and that was pre-pandemic.
Food industry entrepreneurs have a long history of rising to meet new challenges, even if a pandemic has never been one of them. And I haven't lost hope, for with crisis comes new ideas and innovation.
Following the 2008 recession, restaurateurs adapted to the new economy by embracing the food truck business model, a model that has remained popular to this day. Costs were lowered, rent payments were eliminated, and business location became flexible.
In the pandemic economy, lower costs and increased flexibility are also key. Addressing the challenges of today, we are seeing an innovative new business model emerge that presents an important opportunity to industry veterans and newcomers alike: the pop-up.
See What Sticks
Traditionally a restaurant can cost nearly $400,000 or more to start. But, today we're seeing that with pop-ups, aspiring restaurateurs can jump-start a food service business for as little as $2,500.
A one-time weekend fulfillment effort allows industry veterans and newcomers to affordably test, innovate and monetize new business models.
During the week, restaurateurs can market their pop-up. Then during the weekend they can fulfill orders and see what sticks. If a location isn’t right or a delivery method is inefficient, an entrepreneur can adjust the following weekend. And once what is working becomes apparent the business owner can build from there.
For example, one of our customers found that running orders through Instagram is effective, and during the first 45 minutes of a pop-up, he made nearly $2,000. We have seen restaurants average up to 30 percent in profit through their pop-up e-commerce shops month-to-month, when compared with their mainstay businesses.
As a result of this trial and error effort, the pop-up model gives owners better control over their business and its ability to grow profits and reach customers.
Look to the Future
I believe that, just like food trucks, pop-ups will persist long after the U.S. economy stabilizes. Pop-ups and new restaurant technologies allow businesses to decrease reliance on traditional models and to reinvent themselves.
The next generation of food industry entrepreneurs can now viably test their ideas and build their businesses. And we will see these dreamers turn their passions and talents into thriving local businesses.