Coronavirus Survival Guide For Restaurants
The novel coronavirus global pandemic is quickly reshaping American life as we know it. As a small business owner, you’re no doubt concerned about how COVID-19 will affect your livelihood. Restaurant owners especially face challenges due to restrictions on gatherings of people, local quarantines and curfews, and just the general fearful atmosphere that has your most loyal patrons now fearful to leave their homes.
Nevertheless, people still have to eat.
While it’s hard to predict the future as things are changing so rapidly, it seems likely that many restaurants will remain open throughout this pandemic, but in a limited capacity—i.e., for delivery and takeout. We’re here to help you weather out this storm so you can stay open, or at least stay in business, even if you must close your restaurant temporarily because of COVID-19.
Keep reading to learn how your restaurant business can adapt to new business conditions in the age of coronavirus, including resources on how you can save your business from closing and even continue serving customers during this crisis.
Table of Contents
- What’s Going To Happen To Restaurants As Coronavirus Spreads?
- Is Your Business Prepared For A Pandemic?
- 5 Essential Things You Can Do To Prepare For A Community Health Crisis Or Other Disaster
- 5 Strategies To Keep Business Going In A Tough Time
- What To Do When A Temporary Slow-Down Becomes The Worst-Case Scenario
- Being Proactive Is The Best Way To Protect Your Business (& Your Customers)
As more and more cities are affected and local governments declare emergencies, all businesses should be prepared for a downturn. This downturn will almost certainly be temporary, and it will be worse in certain regions than in others, as outbreaks are occurring in different regions at different times. However, it’s becoming pretty clear that no customer-facing business—retail, restaurant, health and beauty, service etc.—will be unaffected.
As a result of the worrying spread of COVID-19, many restaurants are temporarily shutting their doors, reducing their seating capacity, or restricting business to only take-out and delivery.
Has the federal government mandated a shutdown of all restaurant dining rooms? Not entirely. White House guidelines issued March 16 recommended against gatherings of 10 or more people and recommended that all restaurants close (dine-in service) in states with evidence of community transmission. However, as these are just recommendations, the White House has left it up to each state to ultimately decide if they will close dine-in service, and for how long. All 50 states now have community transmission, and as of April 6, only three states still did not have statewide orders prohibiting dine-in at restaurants: Kansas, Mississippi, and South Dakota. However, many cities and counties within those states do have such orders.
Is Your Business Prepared For A Pandemic?
So, is your restaurant business ready to deal with the coronavirus pandemic? Have you actually ever thought about what to do if there’s ever a large-scale crisis? It might seem like it’s too late, but you can still prepare for what changes might be ahead, including even future pandemics or national emergencies. While everyone’s hunkering down, the internet makes it possible to communicate with employees and customers, and even apply for and access emergency funds during this time of crisis.
5 Essential Things You Can Do To Prepare For A Community Health Crisis Or Other Disaster
As a restaurant owner, there are some basic things you can and should be doing from a business management/community health perspective. These actions apply not just to the current health crisis, but also to protecting your business from future crises.
Revisit Health & Safety Policies
This may seem kind of basic, but it’s nonetheless important. We’re talking handwashing techniques, wearing masks and gloves, proper sanitation, and when people should stay home from work. You can help protect your business, employees, and patrons by implementing some stricter health and safety policies, today.
To inform such policies, be sure to consult the official CDC guidelines for businesses regarding COVID-19 and all local ordinances and guidelines. One recent change to take note of is that the CDC now recommends that the public wear masks or facial coverings when leaving the house for essential activities, and this means your restaurant workers should wear masks too. In some cities, it is now mandated that essential employees such as restaurant staff wear masks while serving the public. You can also find some helpful information about maintaining worker health in the U.S. Chamber of Commerce Toolkit for Coronavirus.
Revisit Employee Attendance Policies
Do you have an overly strict attendance policy? You’ll probably need to relax this policy—at least for the time being—so that people don’t feel tempted to go into work when sick. Make it easy for your employees to make the right choice.
Again, be sure to consult all local laws and ordinances. For example, the city of San Diego has ordered that the city’s businesses can no longer require a doctor’s note when an employee is sick, as they don’t want doctors to be burdened by paperwork instead of helping sick patients.
Analyze Your Cash Flow
Cash flow is super important, now more than ever. Take a look at where things are right now and what you anticipate your cash flow will be over the next few months—including worst-case scenarios. How much do you have on hand? How much do you need to keep the lights on? When are your next bills due? Are you eligible for a cash-flow loan if you need one? Check your POS reports for changes. Your revenue may be down, but by how much? Don’t just rely on “impressions” or visual scans.
Here’s a good resource you can use right now to analyze your business’s cashflow: How To Calculate & Analyze Business Cash Flow
Check Your Business Insurance Policy
Familiarize yourself with your business insurance policy. What does it cover? How much does it cover? Here are some resources we have on business insurance:
- Business Insurance For Florida Small Businesses
- Business Insurance For Startups: How Much It Costs And Why You Need It
- How To Get Business Insurance In 4 Easy Steps
- Do I Need Business Insurance?
- Own A Business? Here Are 7 Types Of Business Insurance You May Need
Monitor News & Policy Changes
While it’s not necessarily helpful to obsessively check the news all day for developments (though it can be hard not to right now), it’s important as a business owner to stay on top of all local, state, and national health policy changes that could affect your business. Find a reliable source of news for health updates specific to your city, and make sure your device is set up to receive alerts so you get all the relevant updates.
Of course, you’ll need to make sure you’re adhering to all current policies so that you don’t get shut down. For example, even if your restaurant is still allowed to be open for dine-in, you’ll still need to adhere to social distancing policies from the CDC which recommend that customers be seated at least 6 feet apart and that dine-in seating is reduced to 50 or less. Customers must also stand at least 6 feet apart when picking up takeout and workers should stand 6 feet apart from each other as well. Depending on your state or city, there may be additional guidelines you must follow.
5 Strategies To Keep Business Going In A Tough Time
Okay, so we’ve covered basic emergency preparedness. Now, what can you do to keep your restaurant going during a time of crisis? Here are some ways restaurants can cut costs and/or keep money flowing in.
Implement Takeout & Delivery
Offering takeout and delivery is important when people do not want to dine-in or you’re unable to offer dine-in service due to the current emergency policy in your area. As mentioned, most governments are mandating that restaurant dining rooms close. You can offer a takeout and delivery option via an online restaurant ordering system that works with your restaurant’s website, or you can offer delivery via a third-party delivery service.
While third-party delivery services typically take a big cut of the sale—as much as 30 percent—during the crisis, food delivery services like Uber Eats, GrubHub, and Seamless are currently suspending their commission fees to independent restaurants. These services are also instituting “no contact” food delivery policies in adherence with social distancing recommendations.
Sell Gift Cards
People in our communities cherish their local businesses and want to help them out. After all, you want the businesses you love to frequent to still be around after the current crisis ends. If your restaurant offers gift cards, people can buy a gift card now (providing the money you so desperately need at the moment) and redeem it later once your regular operations resume.
Here’s an excellent resource that can help you set up gift cards for your small business if you haven’t already: How To Implement A Gift Card Program For Small Business: What You Need To Know & How To Get Started
Adjust Your Menu & Hours
This is a time to trim the fat and focus on just the essentials. This is the time to update your menu and drop high-cost/low-profit items, and slow-moving items. Focus on what’s cheap, popular, and in-season. Further reading: 14 Ways To Create, Implement, & Maintain A Great Restaurant Menu
Many restaurants are adjusting their hours to save money and also to minimize risk. You might consider temporarily closing during your least-busy days or closing up early some days to save costs.
Communicate With Customers
Most businesses have an email list and/or a social media presence. Even if you’re not sure if you do, check your point of sale. POS systems like Square automatically collect customers’ email addresses and other contact info so you can reach out to them. Whether you are closing or staying open for takeout and delivery, be sure to contact your customers to let them know what precautions you are taking against coronavirus and any adjustments your business has made to your hours, sanitization policies, or anything else.
If your restaurant is closing temporarily, you may just want to reassure customers that you will reopen when it’s safe and perhaps encourage them to purchase a gift card in the meantime.
Advertise & Promote
If you’re still open, you need to let customers know, and entice them to buy food from you. For example, you can use social media, text marketing, and email to offer some specials for takeout. You may even want to use online advertising in the form of pay-per-click ads and (paid) social media ads on Facebook and Instagram. As far as what foods to offer for your promotions, you will especially want to focus on selling meals that are super cheap to make with high profit margins.
What To Do When A Temporary Slow-Down Becomes The Worst-Case Scenario
What are your options when things start going from “we need to tighten our belts” to “how long can we keep the lights on?”—or worse, when government orders force an extended closure?
What measures are being taken now to help small businesses after the COVID-19 outbreak? Here are some steps governments are taking to help businesses affected by COVID-19:
- The SBA has announced it will provide disaster relief loans up to $2 million for small businesses affected by COVID-19. Here is SBA’s news article about coronavirus SBA loans and its guidelines for businesses re: COVID-19.
- If you can keep your employees on the payroll, you may be eligible for a forgivable loan from the SBA via the Paycheck Protection Program. Read more: SBA Paycheck Protection Program (PPP) Loans Explained: How They Work, Who Qualifies, & Where To Apply
- Congress has passed the CARES Act that includes wide-ranging help for small businesses affected by COVID-19. Read more: How The CARES Act Coronavirus Stimulus Package Could Help Your Small Business & Employees
- The Fed has cut interest rates to almost zero to help businesses and consumers during coronavirus—this means your business could obtain a very low-interest loan (even if you don’t qualify for an SBA loan).
- State and city governments have announced various measures to help small businesses during the crisis; for example, the city of San Jose, California voted to adopt a temporary 30-month moratorium on evictions for small businesses and residents of the city, which has been hard-hit by the virus.
Some more things you can do:
- Check Your Local Chamber Of Commerce to find out about coronavirus disaster relief programs for small businesses in your state and city, such as eviction moratoriums, payroll and sales tax relief programs, low-interest loans, etc.
- Communicate With Your Creditors and also with your vendors, your landlord, etc. Everyone is hurting right now and they will likely be willing to work with you, especially if you can negotiate arrangements for when things pick up. Some credit card issuers are even offering special relief programs. It’s better to be proactive than to get behind and then ask for help.
- Check Your Business Interruption Insurance Policy if you have one. Your policy must include communicable disease coverage for it to cover coronavirus-related losses.
Here is more coronavirus-related information and resources for restaurants compiled by the National Restaurant Association: Coronavirus Information & Resources.
Being Proactive Is The Best Way To Protect Your Business (& Your Customers)
Why is it so important for businesses to get ahead instead of just waiting this crisis out? Well, even if you have to close or drastically reduce your operations, you still have the ability to take actions that can lessen the impact of coronavirus on your restaurant. You can:
- Promote your takeout and delivery services
- Communicate with your customers
- Sell gift cards
- Apply for disaster-relief financing
- Negotiate with your creditors
At the end of the day, we’re all in this together. Also, state and local governments are very motivated to reduce the impact of this crisis and small businesses, which are the backbone of the American economy. Seek out the resources for small business help because they do exist.
Read our Small Business Outbreak & Pandemic Guide: Coronavirus Edition for more actionable information for small businesses during the COVID-19 pandemic.