• Theri B

How might a post-pandemic restaurant business model look like

Fewer businesses are chasing even fewer customers. This transition includes reassessing business philosophies that will help us all in getting through this phase. This pandemic is going to force us to write new chapters in our businesses. On a bright note, the industry could make sure it's better prepared the next time around.  

Words by Theresa Burhan. Source: www.setthetables.com

The industry is going to be different - for good. The pandemic lockdown could be beneficial to the industry in the long run. Hear us out. 

In the past decades, our industry has spent much resources on adding capacity and driving prices down. One issue with the restaurant business is that everyone thinks they can operate one. The majority is made up of small businesses, independents and franchisees, who operate on thin margins, with little room for error, and would have the toughest time reemerging. Underperforming zombie restaurants and bars that were muddling along pre-pandemic with weak balance sheets will be closing down. If there is a bright spot, 

This pandemic is going to stress test the industry through this process

Restaurants and bars that remain will be in a stronger position, and probably more efficient, with better balance sheets and financial strategies. One key takeaway from this pandemic is that establishments with the most cash will be the ones that come out of it the strongest.  

This industry always features many risks. If anything, this pandemic enables you to identify inefficiency and weaknesses in your strategy and its implementation. If you want your restaurant businesses to be able to withstand a crisis in the future, you have to reassess your business philosophy and strategies. Here's how:

Build to Last 

We can't solve problems by using the same kind of thinking we used when we created them Albert Einstein

Whatever works pre-pandemic have (mostly) become obsolete. Your customer's perspective has changed, existing standard operating procedures and technology will render your restaurant uncompetitive.

There is only one route to success: You must engage in ongoing conversations with the people around you - your FOH team is your most valuable resource as they are on the ground. List out unspoken assumptions, difficult choices, and, ultimately, action plans. Re-visit your "why did I open this restaurant in the first place?", align with your core values and business philosophy, only then can you be confident that your strategy is on track.

When asked about his philosophy of hospitality, CEO of Union Square Hospitality Group Danny Meyer, said in an interview, "I think the experience of how you are made to feel is the most important thing. Hospitality basically says that the most important business principle at work, way beyond that the food tastes great, and by the way, if the food doesn't taste great, you're never coming back here, but if the food tastes great, that alone doesn't assure that you will come back here. So what hospitality does is it adds the way we made you feel to how good the food tasted."

It starts with listening and paying attention. Danny Meyer wrote a new narrative for himself, his businesses, and also changed the entire industry.

What is your business philosophy? It is a timeless guiding principle that has intrinsic value and importance to hold your business together. 

Switching gears between dine-ins and takeaways 

While most of your customers look forward to patronising your restaurants once lockdowns are lifted, there is also two other possible categories - 1) wait and see, and 2) those who may not return to dine-in routine for a good six months or more. Revenue is probably at 50% at where it used to be. Therefore, you need to avail your menus in multiple channels within a sound business model. Some examples can be: 

  1. Avoid 30% of fees from delivery service providers at all means. Use your internal resources for delivery within the vicinity and only utilise third parties for longer distance deliveries 

  2. Offer e-receipts instead of paper form 

  3. Cut down on highly perishable ingredients

  4. Maximise your resources through cross-utilisation: 

  5. Offer an assortment of signature ingredients that your restaurant is currently using to be branded, packaged, and available 

  6. Menu in digital form with anti-microbial screens instead of paper form

  7. Built scenarios for the different easing restrictions with your team

Businesses that survived will be held to a higher standard

The good news? There will be significantly less competition. The not-so-good news? Your customer's expectation will go up several notches. 

Not necessarily your new menu launch, but in regards to hygiene measures, safety and overall quality. Less staffing per workstation; more distancing between tables; subdued customer behaviour, muted environments; and a lot more safety measures to convince customers in returning to a social environment. 

Your team will need to be vigilant in your cleanliness measures. There is absolutely no room for error here. 

Hygiene measures, safety and overall quality will become hallmarks of a remarkable experience. 

A few examples could be: 

  1. Set the tables with plates and cutleries after customers have ordered. A restaurant go so far as to lay out still warm cutleries from the dishwasher to assure customers. 

  2. Alternatively, cutlery and plates to be cleaned at tableside instead 

  3. Sanitising of trays prior to delivering it to the customer

  4. Napkins and condiments upon request only over the counter 

  5. Cleaning of POS systems between transactions 

  6. Pay-at-table functionality to avoid passing credit cards

  7. Serve condiments like salt and papers in packets 

Read between the data 

Use your business control and digital systems as interactive tools. May it be an ordering system, a new booking system, reports from third-party providers or CRM systems. In the coming months, Google and Apple are working together in a health data partnership to enable the use of Bluetooth technology to help governments and health agencies reduce the spread of the virus, with user privacy and security central to the design. You can opt-in to track your exposure to COVID-19 on your cell phone, where restaurants can ask customers to self-report, in addition to temperature checks. 

There will be fewer actual menus, replaced with ordering from a tablet at the table and customer's phone. Pay close—and visible—attention to the data to the system you choose to use interactively. Utilise data to generate dialogues among your managers and generate new action plans.

This pandemic is going to force us to write new chapters in our businesses. Fewer businesses are chasing even fewer customers. This transition includes reassessing business philosophies that will help us all in getting through this phase. On the bright side, when this whole episode has come to a slow simmer, the industry could make sure it's better prepared the next time around.  

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