We are in unprecedented times with the COVID-19 pandemic.
Public health organisations and governments may advise us on how to deal with the disease here and now. But there are many unanswered questions as to how to deal with the fallout.
How to reduce costs, exposure and risks:
Although we covered some of this in our last article, we wanted to clarify some points.
Without the sales, your exposure to costs will be considerable. Not a comfortable situation – and one we are all worried about in business. Here are some of the ways you can maximise cash flow right now. It’s advisable to involve your accountant or legal advisor to ensure that no stones are left unturned.
Reassure your customers that you are taking risks seriously through your processes and procedures. Look to spread out tables more than usual. Communicate the actions you are taking in-store and online. Reassure your guests that you take disinfection of surfaces seriously.
Talk to your business manager at the bank for a payment holiday on your loans.
Call HMRC and ask if you can defer payments on VAT & Corporation TAX?
Ask your landlord for a payment plan or to move to monthly upfront, rather than quarterly.
Discuss extended credit terms with your suppliers if you are stuck, but try keep it flowing.
Talk to your accountant and make sure you are claiming any subsidies or benefits your government is offering.
Ask your employees to take an unscheduled holiday to help with the burden. Be honest with your employees; they will be worried about the situation.
Reduce your operating hours to core trading periods to reduce variable costs like energy.
If you have a restaurant and take away, maybe consider closing the restaurant to utilise your resources for the takeaway.
Offer a shortened menu – look to reduce stock holding, removing items that have a short shelf life or are low margin.
Make more in-house: if there are items you are usually buying in ready-made, that could be produced on-site with the additional labour hours on hand, consider making these changes.
How to utilise resources and time if there are no or fewer customers:
You are likely to have a considerable fixed cost of employment, with many people’s workload linked to the volume of guests you usually accommodate. These resources aren’t necessarily wholly wasted if you get some of all those things done that regular busy times do not allow time for – with the ambition to emerge stronger from the crisis when it is over.
Here are some of our recommendations to handle this situation.
Plan for the future. Use this forced downtime to develop new recipes, update costings, build-out improved training manuals etc.
Get your shops looking top-notch. If your teams can still be on site, look to do deep cleans and undertake those small maintenance tasks that never get done.
Build great social media content. Use the time to get creative, set photography contests for your staff, get them coming up with brilliant ideas for social media and plan marketing initiatives for when you are back to full steam and ready to maximise your business.
Do a bit of strategic planning. Are there new markets, customers or diets you have been thinking about catering for? Now is a great time to do your research, phone suppliers, speak to other shops and gain customer feedback.
Get up to speed with any paperwork that needs doing, for example bookkeeping and taxes.
Spend some time considering ways you can streamline your business and work smarter, for example with digital food safety management systems and staff rota software.
Shield and build your brand. They say that reputations are created in tough times. Think about how you are talking with your customers.
People I would keep on speed dial, accountant, business manager from bank, wholesalers, keep them informed about your intentions but also find out what others they serve are doing.
If you do close, you need to check your insurance policy as most policies have a limit on how long a property can be unoccupied – usually 30 days but some insurance policies less.
Remember everyone is going through the same challenges right now and customers will be quick to judge how we react. Think about doing things that add value for your customers, even if they can’t or won’t come to you right now.
And don’t forget to rest and recuperate.