6 things you can do while waiting for your restaurant to fully reopen.
I wanted to share my thoughts on what you can be doing while waiting for the current pandemic to end and don't worry, it will end. This is geared towards independent and franchise restaurant owners but can apply to retail businesses in some areas. The goal is to hit the ground running when the country opens back up for business, as the summer will be saturated with marketing materials, promotions and increased advertising spends. The tactics outlined below follow a Win, Win, Win theory. They will benefit the customer, the business and the staff. I hope that you can take away some value from this post.
Retain your key staff. With the government creating subsidies for small business owners, it is imperative to take advantage of it. While some restaurants are closed and some are open for take-out and delivery only; in order to "hit the ground running" you need to have your key staff ready to be operational from day one of the reopen period. If you have laid off your key staff and have to rehire, train and relaunch you will be weeks behind your competitors and will definitely lose market share. If you have laid off some key staff, call them back and ensure them they will have a job when you return to business as normal. This is also a great time to evaluate who your key staff are and address any gaps and post job ads well in advance. Although the hiring process will be online as well as any training, you still can have the ability to prepare people before you reopen.
Forecast your revenues for the next 12-24 months. Now some of you might need help with this but there are many business advisors or consultants that can help you if you need it. Projecting revenues is very important as restaurants use a vertical analysis of their business. This means all costs (except cost of sales) are generally measured as a percentage of total revenue. That means that an accurate revenue projection defines your staffing levels, operating margins and how much you should spend on cost of sales and operating expenses. Remember revenues are a simple equation. Average Guest Check x Guest Count. This is simply the amount of people coming in your door multiplied by the average amount they individually spend. You have a lot of control over AGC as you set the menu prices and have good historical data. If you are not changing your pricing or don't think your sales mix will change too much you should be able to forecast this pretty easily. That being said, there is another bullet later on which can help you boost your AGC with some additional training. The difficult forecast will be around guest count. As most businesses compare on a year over year basis, I recommend you create three iterations of your revenue forecasts. One will be very comparable to last year's numbers and I would call this one the "good". The next will have a reduction guest count of 10%. I would call this one the "okay". The last one would see a reduction of guest count by 20% and I would label this one the "bad". As consumer behaviour is going to be hard to predict, having three iterations from good to bad will allow you to quickly adjust when you see how your restaurant guest count is trending when you reopen. If you have never tracked guest count or AGC in your business, reach out to an advisor or consultant for help. As a former accounting teacher, it pains me to say it, but advisors are way cheaper than an accountant and have much more operational insight to support you in this analysis. They also can help you calculate these numbers if you don't have them available.
Keep up your delivery and take out practices. If you are one of many restaurants that has, for the first time, really focused on take-out and delivery, this is a blessing. As a former director of operations for a billion dollar franchise restaurant company, I had many heated discussions with franchisees who hated take-out and delivery. Even after I clearly explained that take-out and delivery is more profitable than your core business, franchisees pushed back. Now, with take-out and delivery being the only way to do business hopefully people are honing their execution and focusing on quality and accuracy. I think its fair to say that some people will take a while to come back to the dining world and delivery/takeout will be a staple in every restaurant moving forward. Remember every delivery guest counts toward your guest count total. If you haven't done delivery (almost everyone does take-out) in the past, this years counts will be 100% incremental to your year over year analysis. If you haven't been doing delivery during the outbreak, you need to adopt this quickly. This is a market segment that is not going away anytime soon.
Keep in touch with your vendors and adjust your menu now if necessary. All relationships are crucial, but your vendor relationships have never been more important. If you haven't yet, discuss with your vendors what they think their logistical challenges will be when business returns to normal. Do they see some ingredients or key items that may lag or be in short supply? Remember that everyone is going to be ordering at the same time when restrictions are lifted, so supply might be challenging for some popular items. You might want to reduce your menu by a few items that could be in short of supply at least in the short term. Also, a massive increase in take out and delivery will change your sales mix (i.e. more pasta sales than steaks for example).
Work on sales and knowledge training virtually while you wait to reopen. If you are going to keep your people on payroll, which is crucial, make sure they come back sharper then when they left. Many people teach sales and experience training for hospitality, and I also have my methods. I wanted to share with you one key philosophy I adhere to when I'm rolling out sales training, staff contests, or promotions. I call this as my Win, Win, Win Approach. Whatever we are doing must be beneficial for the guest, the business, and the associate. All new initiatives should meet this criteria. This way you have staff buy-in, higher guest satisfaction, and are making more money. This current situation we are all faced with isn't easy, but it does allow us an opportunity to develop our people on a higher level with in depth sales and service training. We train new employees all the time, but we rarely have time for elite development with our existing staff or managers. So, this is what I would do. I would focus on three key learnings:
1) Show everyone how we keep score...on our financial statements.
I always train ALL of my staff to have a basic understanding of the business model. I mock up a high level income statement and explain key line items like labor and cost of sales. This training explains how narrow margins are and how $1,000,000 in revenue is only around $100,000 to $150,000 in profitability. Training my entire staff on how we "keep score" has been one of my fundamental break throughs as a leader in many different fields. I create a common language that everyone understands as it pertains to the business being successful. Then as we introduce tactics to increase revenues or decrease expenses there is a foundation that people can draw on to explain the "whys". Once again if you are not comfortable with this there are many firms that can help you craft this training that will have a massive return on investment.
2) I would give all FOH and BOH staff a menu, preparation and Liquor, Wine and Beer knowledge test.
My expectation has always been that all serving staff should know every menu item and key ingredients. This includes hosts or anyone dedicated to answering the phone for take-out and delivery. They are in that case the server. Servers and Bartenders should also know all of the liquor and beer available and at least 3 key wines in each varietal. For example, three Chardonnays, three Merlots etc... Obviously, this is for restaurants with a LWB menu only, but wanted to give you my expectations. If they can memorize the entire wine list, then god love them, but some are pretty extensive. Menu item knowledge leads to better suggestive selling. Suggestive selling allows you to increase your AGC while your guest feels like they are receiving more value. One of the sales tactics I had my team implement was asking the guest what their favorite spirit was in a mixed drink. Stay with me, this will come together soon. If someone ordered a Caesar or Bloody Mary, for my American friends, we would ask them, "what their favorite vodka was?" They would generally ask "What do you have?" or list off their favorite. Now, my team needed to know what all of the options were or this would backfire, but when they recited off the 11 premium Vodkas we had or steered their guest from their favorite to something similar we had in stock, people were impressed. Seeing that this was the first contact of their guest experience, people were off on the right foot. Let's analyze our Win, Win, Win theory. The guest is more satisfied because they get exactly what they want, the server makes a higher percentage of gratuity off a higher overall bill, and the business has higher revenues and margins because of the premium spirit selection. This is why knowledge training can accelerate your AGC and your guest experience.
3) The last training piece I would do online would be some role playing. Once people have completed their knowledge test, you could role model a perfect service experience with some key upsell touch points and video tape it. Have fun with it !!! Maybe some contests for funniest video or best romancing of a certain product. You can send out $25.00 gift cards for grocery stores or to Starbucks drive thru for some frugal recognition.
Keep in contact with your customers. This is very important. If you have a Customer Relations Management tool or an email database, it is important to keep your customers up to date on how the restaurant and team are doing. You will want to mention you are open for take out and delivery (I hope) and any new menu ideas or changes you have made for when you reopen. Also, highlight any promotions you might be running. Maybe a free meal for health care workers (our new superheroes) as a genuine show of gratitude as an example. In Asia, where restaurants are reopening, they are only allowed to reopen at 50% capacity with social distancing still in place. You would want to let your customers know if you were taking any further precautionary measures to protect them and yet still allow them to dine out. This might be legislated anyways, but consumer confidence will be lower when this pandemic ends and a proactive approach is what I would recommend.
This is a scary time for independent and franchise restaurant owners. You are not alone though. All of your competitors are now colleagues in this universal fight to survive and reestablish what you had. I hope all or some of these ideas help or at least spur on some thoughts. I wish you all of the best, stay safe and let's hope you are all fully open very soon.