First 3 Things Restaurants Should Do Now for Recovery
I’ll tell you what, here in week five, my energy levels are up. Your energy level should be up because if you've made it this far. If you're in this week five, then I think you’re going to make it. I didn't say you weren’t going to come out of this wounded. I didn't say you were going to make money, but you're going to make it.
That's huge, because anecdotally, I have no research, no information to provide you, but my belief about 25% or more of independent restaurants, are not coming back from this. These restaurants didn’t have any cash flow and had no way to generate it without sales or employees. And that makes me very sad because just because their cash flow was tight didn't mean they weren’t going to make it another 10, 20 more years. For a lot of operators, that’s just normal operations.
We are a resilient group, and I have a lot of hope for you and faith in your ability to get through this. To do that, first and foremost, you can't go back to the way you were doing things. Ever.
And now the money is available through Small Business Administration loans, but it’s confusing to apply and to know what you’re getting yourself into. Part of this is the ebb and flow of crisis and change.
But the exciting part is I'm hearing more and more from email and telephone conversations that restaurant owners are getting the money, it is hitting bank account. Approvals were happening. The federal government is coming through. The money is here.
So, now you have this money. We already talked about the importance of a 12-week cash flow budget, which was the focus of the first few weeks (if you didn’t sign up for the free course with budgeting spreadsheets, you can do so here).
The first three things you need to work on right now to make sure you never go back are:
Restaurant 101 is solid
Restaurant 101 is the very first thing that must happen your business. Before put together the checklists and cash controls, before you get into the myriad of systems I teach to help you get your life back and make the money you deserve. Because ultimately, if you don't do Restaurant 191 right, your restaurant sucks.
Do I have your attention? OK, let’s break it down. Restaurant 101 is simply great hospitality.
- It's hot food hot.
- Cold food cold.
- A clean safe work environment for guests and employees.
- It’s WOW customer service and an incredible product.
Checklists in place
To start, if you're running a great restaurant, putting out great product, and you've got great service, checklists are the key critical system you're going to put in place if you want to make money. Why? If you can't get your managers to use a checklist on a daily basis, what makes you think they’re going to take inventory Sunday, on time and accurately. If you can't get them to do the simple stuff, what makes you think it's going to change? The key to checklists is using them to create a culture where the details matter.
You need to make sure you have a checklist for opening and closing side work for every position that it is so detailed that anybody could pick it up and do it. It’s not just “clean the bathroom,” but, “Make sure the bathroom is clean: the mirrors have no water spots, there's no standing water on the counter, wipe down the counter and throw away the paper towel, if the garbage pail is 50% filled, take it out and replace the liner.” It is step-by-step instructions how you want it done, how well you want it done and by when.
Now is the time to create the checklists. Walk around your building with a yellow pad of paper, write down everything that pisses you off, grab your old checklist, grab your new checklist and put it all together. From that point forward, when you reopen, you will have checklists that set expectations.
Checklists are also essential for cash controls. Make sure every penny makes it in your bank account. Using the daily sales report from your point of sale system, track how the money came in. Then every day you put in your actual deposits, track your over short and make sure it's within whatever you allow for servers and bartenders. Take the time to put your procedures in place for that.
A system for everything
You must have systems for everything in your restaurant. Systems are a process, a way of doing anything and everything in your business. Period. Whether it's count out a bar drawer the same way or dollars per labor hour worked and anything and everything in between.
You need to embrace what the chains do well, which are making through the pandemic easier than we are because they have systems, processes, ways of doing everything they do. They don't have owners in their business. They're able to cut.
What systems? There's a whole list. In fact, there's a book that I wrote, many of you should know now, called Restaurant Prosperity Formula: What Successful Restaurateurs Do. It’s an easy read and will set you up with everything you need to have in place that you can start to create your plan for success.
You've made it this far with COVID-19 restrictions and money is starting to hit the bank. Do not blow this opportunity. Do not piss through that money without having a plan.
- Your plan:
Restaurant 101 - Checklists and cash controls for everything you do
- Get your systems in place
Our industry has just gone through something it’s never gone through. You have opportunity. Yes, your sales may not be as strong because we have all these people out of work, but there will be less competition, which means it's an opportunity to be great.
Take this free restaurant evaluation. It takes about 10-15 minutes to fill out and when you're done, you’ll have a 20-25-page customized report based on your answers about your restaurant. It will show you where your gaps are in the 23 stages. There are no strings attached. Just look at it for where your gaps are and what you should be working on now.
I teach systems in my book, Restaurant Prosperity Formula: What Successful Restaurateurs Do, which you can order here.
