When it comes to the task of reopening dining rooms, most restaurant owners and operators are feeling a sense of overwhelming mental limbo. Excitement and eagerness for business to return to normal, and worriment of what that new normal will look like; all while learning how to successfully navigate the many facets that go into the reopening process. To add to the mental gymnastics, determining how to strategically take advantage of the barrage of legislation that has passed, such as the Paycheck Protection Program (PPP) under the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), has created an extra layer of complexity to a delicate situation in which margins were already paper-thin before the global health crisis took the restaurant industry (and world) for a major spin.
While there are countless guides available for health and sanitation principles in order to instill consumer confidence as dining rooms begin to fill back up, such as this playbook from the National Restaurant Association, there has been a gaping hole for best practices on the necessary financial side of the reopening equation. When it comes to where and how you’re spending, or not spending, your SBA loan money, and tackling the rehiring process, it’s critical to remain tactical in your decision making to ensure your restaurant successfully eases back into a fully operational business. Continue reading on for your financial blueprint to reset the table while braving the unknown:
REOPENING = GRAND OPENING
Our top tip that will serve as the umbrella for everything to follow is this: It’s PARAMOUNT to mentally connect your dining room reopening just the same as you treated your restaurant’s grand opening when you first got into business. Remember, your operation is not an 8-week business so treating it as such will only harm you in the long run; the key is to find the moves that help you achieve success past the 8- weeks.
WHAT’S BEST FOR YOU MAY NOT BE WHAT’S BEST FOR BRIAN’S BURGERS AROUND THE CORNER
Your operation is unique to you. It’s unique to the decisions you’ve already made before the pandemic hit, and the decisions you’ll make to reopen need to be independent of those around you. Now we’re not saying don’t share knowledge or don’t learn what others are doing that have been beneficial to their restaurant; we’re saying make sure you remember that your decisions may look different, and THAT’S OK.
SBA LOAN MONEY & LOAN FORGIVENESS
This may sound counterintuitive but listen up – do not base your decisions on the CARES Act, FFCRA, or the many nuances and details of the stimulus plans. Yes, they have been created in an effort to assist you during these unprecedented times, but don’t drown yourself in a teaspoon of water. Instead of getting caught up in; if, how, and where, to spend your loan money entirely based on whether or not it will be forgiven, it’s critical to dive into data and think about the bigger picture of what’s best for your business and go from there:
TO SPEND OR NOT TO SPEND
Just because you have the loan money doesn’t mean you need to spend it. You can simply pay it back without using it if you already know you can survive without it, and debt is not a viable solution for you.
KNOW THE SCORE
You can use a Financial Break-Even Tool to help determine whether or not it’s safer to keep the pot of money and use it for remarketing, cleaning for reopening etc. and pay back the interest, or if you’re better off without touching it.
To learn and understand how to successfully utilize our Financial Break-Even Tool to make educated decisions regarding your restaurant, reach out to one of our Client Advisors today!
I’M USING THE MONEY; HOW DO I MAKE IT LAST?
Great! You’ve used the Break-Even Tool and you’ve concluded that it’s best for business to utilize the loan. There are two places that stand out to us when determining where to spend it so it lasts.
#1. REHIRING: Now we’ll say it again: Do the things that will add to your success in reopening first and foremost. This is going to be a balancing act between ensuring your employees are brought back on for the long-haul (not yoyoed back onto unemployment the second your guests walk in and see your servers wearing masks and decide they’re not ready to dine out), and remaining true to your fiscal accountability.
Here’s the secret: Walking the tight rope between doing what’s right, and doing what’s smart for business, doesn’t need to be mutually exclusive.
You don’t need to bring back every employee right away just to get back at your pre-Covid payroll equivalency. It’s vital to only bring back the individuals that are going to best represent you, your brand, and your guest experience – remember, you’re treating this as a Grand Opening – carte blanche, blank slate.
A great place to start the rehiring process is within your Back of House; this is because you’ll only be opening a percentage of your tables due to social distancing and safety measures, meaning your FOH staff will no doubt be limited, but your BOH? They’re still working at 100%
Take into consideration the following: You will lose a certain # of seats dependent upon mandates and social distancing – the caveat? You don’t know how many just yet so:
Consider your revenue generated PER SEAT, and from there, view your costs on what you will lose per seat – the number you come up with will act as your slider to help you determine how many people and who you will bring back upon reopening.
#2. CONSUMER CONFIDENCE: We won’t go deep into this one; as we mentioned earlier there are numerous resources, and CDC guidelines ensuring your guests both feel safe and see safe, making your restaurant as touchless as possible, but spending your dollars towards the following will be a must: Making sure your restaurant is clean, Signage & Staff Training for safety measures, Food-handling & wellness checks.
DELIVERY – KEEP OR DUMP?
Finally, if you’ve been using Delivery services to help get you through this pandemic, and you’ve seen that your Sales are increasing at, for example, 12.6% per week through delivery – don’t get rid of this cash cow right away! Keep it in place to keep the sales up during your initial reopening, and then you can reevaluate down the road after you’re back on solid ground if it still works for you and your brand.