SUCCESS BEYOND THE GREAT PAUSE CONNECTION, CASH, CREATIVITY & COLLABORATION
Restaurant and bar owners have suffered greatly this year thanks to the coronavirus, but they are resilient!
On July 1, we pulled a panel of professionals together to advise restaurant and bar owners on surviving and thriving during this challenging time.
Our webinar, "Success Beyond the Great Pause: Connection, Cash, Creativity & Collaboration" featured Randy Gerber, founder and principal of Gerber, LLC; J.R. Kern, principal of Capitol Equites; Vince Stasiulewicz, client executive of Hylant; Jeff Tubaugh, partner, BDO; and Alicia Zambelli, partner at Issac Wiles.
If you missed it or just want a refresher, here are the highlights:
LESSONS & TRENDS
The panel discussed the lessons and trends they've noticed in the restaurant and bar industry:
- COMMUNITY AND CUSTOMER LOYALTY HELPED SOME SURVIVE - Customers, fellow restaurant and bar owners, and professional services genuinely supported each other. Intellectual capital was "checked at the doors" and they focused on getting through the Great Pause and starting the new normal. Restaurants with a local supply chain connection had more reliability, and customers patronized local businesses over big chain restaurants.
- RESTAURANTS THAT RETOOLED SUCCEEDED - The restaurants that succeeded figured out how to make the take-out option work, either through their drive thru window, delivery, or by bringing pre-ordered food to designating parking spots. Take-outs spirits will likely continue. Outdoor spaces are expanding, and streets are closing so customers can walk around outside with drinks in hand.
- CASH IS STILL KING, AND IT IS HARD TO COME BY - Without liquidity in their balance sheets, the PPP was a restaurant and bar owner's lifeblood. But it came with restrictions. Franchisors considered merger and acquisition options with their franchisees, and banks were tightening up loans. While restaurants and bar owners bootstrapped or asked friends and family for support when they first started the business, they were hesitant to ask for this support after experiencing years of success.
- A CULTURE OF FORGIVENESS - Most landlords were willing to wait for rent payments, renegotiate terms or consider a percentage rent deal to help restaurant and bar owners.
- INCREASING COST OF INSURANCE - Insurance carriers experienced higher than normal expenses from riot damage, curfew-induced business interruption claims, and litigation expenses. They were also hit with director / officers and employment practice liability claims. The result was higher premiums for insurers and shrinking capacity for policies previously declined, such as active shooter coverage.
The panel recommended the following tips to restaurant and bar owners:
- MIND YOUR MARGINS - Restaurant and bar owners should look closely every line item and try to cut costs. Renegotiate expenses such as rent and utilities if possible.
- SIMPLIFY YOUR MENU - Fewer menu choices make ordering easier for your customers. Know the cost of each meal, and offer more entrees with a higher profit margin at a higher price. Your ideal customers will pay more to offset your costs. Offer items with similar ingredients to streamline the kitchen.
- CONTINUE TO RETOOL - Some restaurant owners are considering concepts like "ghost kitchens", where customers order from multiple restaurants in one building delivered by one service.
- MAXMIZE YOUR CURRENT SPACE - Don't spend money on capital expenditures. Consider remodeling your existing space instead.
Please mark your calendar for Gerber's upcoming Discovery events! If you have any questions,
please reach out!
