Four Ways to Fuel Profitability During a Pandemic

According to the National Restaurant Association the restaurant industry is positioned to lose $40 billion in sales just in the final two months of the year. Here are four ways you can continue to keep your restaurant operation healthy and profitable through the last few months of this unprecedented year:

1. Flexible Business Model

The restaurants that have stayed profitable through this pandemic have had to adapt repeatedly, and unfortunately those that have refused to shift their business model are struggling to stay afloat. So how do you create a flexible business model when stability is all that you’ve known and has kept you afloat historically? Here are a few ideas:

Focus on Delivery and Takeout (if you haven’t already) into your Business Model and Make it Unique: The easiest way for a restaurant to keep money coming in right now is to incorporate carryout and delivery into their business model. 60% of U.S. consumers order delivery or takeout once a week. Check out this webinar on how to Transition to Take Out and Delivery if you haven’t done so already and don’t forget to add a special touch so consumers are sure to not forget their experience with you:

  • Encourage repeat visits by throwing in a gift card they can use for themselves the next time they visit.
  • Show your commitment to the community by feeding the local hospital or frontline workers.
  • If they order a kid’s meal throw in a coloring book or a small toy.
  • Include a handwritten “thank you” note from one of your employees or better yet the restaurant owner.

New Streams of Revenue: Restaurant operators had to act fast and be innovative with new revenue streams when things shifted suddenly back in March. Here are a few revenue streams that will most definitely stick around post pandemic.

  • Meal Kits: Meal kits have gained a lot of traction over the past 7 months. We’ve seen everything from a Taco Tuesday At Home Taco Bar to a Boozy Sunday Brunch Box. Bonus – if you are willing to share one or two of your recipes with the public, consider offering a recipe printout in a box with all the ingredients guests need to make an extra special meal at home.
  • Virtual Cooking Classes: The truth is, even with restaurants open, people continue to work from home or are just generally at home more often. This is freeing up more time to take on new hobbies such as learning how to cook and is the perfect time for chefs to offer virtual cooking classes to provide tips and techniques to these newbie chefs. Make them a fan of your chefs and they’ll be a fan of your restaurant for life!
  • Selling your own propriety products: Do people come to your restaurant specifically for your fresh pasta, signature sauce, jalapeno mango ranch, or sweet and spicy homemade BBQ sauce? Package them up and sell them.
  • Grocery Kits: Consumers need groceries and as a restaurant operator you have access to goods at a price that they don’t.  Some restaurants are currently operating as a type of grocery store and offering customers bundles of inventory or items à la carte. Sell them a meal kit, a bottle of your homemade BBQ sauce, and a roll of toilet paper – one stop shop!

Think Outside the Box: Al fresco dining is one way of welcoming guests to your restaurant who are still hesitant to dine indoors in a safe, socially distanced manner. However, with winter and cold months coming we know this can be challenging. Here are some innovative ideas to think about.

2. Simplify your Operations

Over the past several months restaurant operators have been forced to take a step back and look at their operation differently to simplify their operations and cut costs.  A few common themes we are seeing:

Going back to core menus and reducing SKUs:  Complex menus increase costs. By simplifying your menu to focus on a core base of adaptable, high-quality ingredients you’ll be able to hold less inventory and reduce your SKUs, better control waste, and ease the burden on your wallet. Using a restaurant data analytical tool like Compeat allows you to easily see what items are selling best in which locations enabling you to scale your menu down to the most popular items and the ones that travel best for delivery and takeout.

Shifting to limited days of service or hours of operation:  If you are open 7 days a week and seeing a slow trickle of customers certain days, test out limited days of service. Which days have been your busiest? Open on just those days for the time being to cut down on costs and free up your time for planning or trying out a new stream of revenue as discussed below. You should look at hours of operations as well. Does it makes sense to close earlier or open later on certain days? Compeat customers have the benefit of our Shift Profitability report that makes these decisions easy.

Require reservations in order to reduce staff: To better control your labor costs and ensure you only have the staff needed for a particular shift, you can require reservations.  This will not only give you a better handle on your labor and inventory each night but also ensure you are following the state mandated guidelines for number of people inside of your establishment at a time.

3. Reduce Labor Costs

Did you know labor is the second biggest cost (after food cost) in the restaurant industry. Fortunately, there are some tips and tricks out there to help you keep it in line.

Hire flexible employees: Restaurant turnover is ridiculously high and training costs are expensive. Employees who can easily pick up or drop shifts are invaluable. Flexible employees are also likely to stay around longer since schedule issues are one of the top reasons employees leave.

Look for sales trends: Balancing good service and low labor is difficult but it can be done. It is important to review your sales history to know what to expect on any given shift. Also, be aware of local events that have historically caused an unexpected spike or drop in sales. Be sure you are adequately covered for peak hours but be careful not to over schedule as this will quickly cut into your profits.

Check your Compeat or POS reports hourly: Restaurant managers are insanely busy, but this is important. Did every employee clock in and out on time? Is anyone at risk of going into overtime? Are sales tracking to forecast? Compeat’s restaurant management software makes this incredibly easy.

Cross train employees: Increase productivity by cross training employees so that they can be utilized in other areas of the restaurant when you are short-handed or need extra help during a rush. For example, train a few waiters how to jump behind the bar during happy hour when the bar is full and the restaurant is empty. Train your busser to take drink orders and run food when all of your tables are full and there are none to clean.

For more ways to reduce labor and other variable costs download our full guide here.

4. Don’t Forget about Marketing

Marketing is essential for restaurant operators to stay top of mind and survive this crisis.  Here are some ideas to help you engage with customers online, boost awareness around your dining, takeout and delivery offerings, and keep business going strong during this unprecedented time.

Communication is Key: Tell your customers that you’re open (for takeout, delivery, or your dining room) on social media, over email, on your phone recording, on your website, with door or street signage – anywhere and everywhere someone may look. Drop fliers in mailboxes in nearby neighborhoods. Make sure to share your hours of operations, updated menu, updated take out options (alcohol is a big one) and be SURE to share what type of safety precautions you are taking. Americans remain anxious – so show your customers that you’re taking extra steps to keep them safe.

Social Media Initiatives: For the most part the traditional social media “rules” should be thrown out the window right now. We are in an unprecedented situation – which requires an approach that is outside the norm. Meaning, post more than X number of times a day if you want to, don’t overly edit your videos or put beautiful filters on everything. Make it real, make it authentic, and try to make it fun. Here are some ideas:

  • Show and Tell: Connect with you customers by taking them behind the scenes where all the magic happens. Highlight your chef cooking up a new recipe and then share that recipe for those who may want to try it at home.  Feature that goofy BOH worker who can always seem to bring energy and smiles to the faces of your hardworking employees. Share stories from your restaurant owner on how he or she is truthfully coping and dealing with the stresses and fear of the unknown. Now more than ever before people want to connect and what better way than to bring them inside your operation. Make sure as you are highlighting in BOH visuals, your staff is shown in protective gear so you can reiterate your restaurant operations is abiding by all safety precautions.
  • Host a social media contest: Encourage customers who visit you or order from you to tag you in a post to be entered to win prizes or a free meal. The more creative the post the better to really liven up your Instagram feed!

Optimize Your Online Presence: With the world of takeout and delivery now being a primary way to drive revenue, now is the time to make sure that consumers can easily find you online. Do not leave it to chance that search engines will automatically list your website when a search is conducted. 92% of consumers will pick a business on the first page of local search results and 60% of users click on one of the top three search results; which means it is extremely important that your restaurant’s website comes up on top when consumers conduct a search.

How? By increasing your Search Engine Optimization or SEO.  And great news – it’s free to do!  All major search engines rank listings based on its relevance to users. Does your restaurant appear when you Google “food near me”? This just happens to be one of the most search terms on the web today. These search engine companies want to keep their users by providing the best search results possible. In order to do that, they scan websites for certain key words and topics, rewarding the sites with the clearest messaging with the highest rankings.

The whole idea of SEO and how to compete in this website competition can feel pretty intimidating especially in unimaginable times like these. Click here for our Top 8 Tips to get an immediate boost in your SEO ranking.

We hope these four strategies will help you to ignite profitability over the next two months and beyond! Check out this webinar to learn even more!




Read also:

Don’t Let your Menu go to the Dogs

Why Restaurants Shouldn’t ’86’ Marketing Efforts During COVID-19 – Top 5 Ways to Connect with your Guests

COVID-19 Relief is Emerging. Where to Turn for Help