Desperation has sunk in for those of us in the restaurant business. We know that closure is a reality for at least 30 more days and likely longer than that. The only adjustment that can be made is the heartbreaking decision to furlough employees or consider permanent closure of operations. Some try and paint a brighter picture by projecting that as soon as the quarantine is lifted – people will return in droves to their previous lifestyle and fill those empty restaurant seats. We must recognize that this scenario is not that likely. Everyone is beginning to get use to social distancing and understand just how serious this virus is. It is likely that people will continue to be cautious and ease into any semblance of past normalcy. A return to business as usual is not realistic and we should plan accordingly.
After three weeks of our current state of uncertainty it is time to take a deep breath and do what Americans have done in the past: develop a plan moving forward. Our first job is certainly to protect ourselves and our families, to stop the spread of the virus in every way within our individual power, but time wasted now will come back to bite us in the near future. Whenever we are able to return to business it is imperative that we are ready to face new challenges head on. To fail to recognize that EVERYTHING WILL BE DIFFERENT is a formula for real failure.
This is a time to THINK DIFFERENTLY about every aspect of our business. Let’s put aside the projections by those important figures in the food business that talk about the demise of the restaurant industry and begin with a few very important facts:
- THE RESTAURANT BUSINESS IS IMPORTANT TO OUR CULTURE
Dining in restaurants is a vehicle for communication, a respite for those who are looking for solace, a place of celebration, an environment for reward, and a source of entertainment that would be impossible to replace.
- THE RESTAURANT BUSINESS IS ESSENTIAL TO OUR ECONOMY
Nearly 14 million Americans work in restaurants and even more found a restaurant as their first job leading to numerous careers in their lives. As the second largest employer of people, businesses that pay taxes, and central focal points for urban growth – restaurants are a foundation of free enterprise.
- THE RESTAURANT BUSINESS IS HISTORICALLY ONE OF THE FIRST TO RECOVER
Worldwide – when countries, cities, and communities transition out of difficult times it is the restaurant and hotel industry that leads the way back to prosperity. People want and need to gather, to tell stories, to renew friendships, and to take care of business. We can expect that this will be the case in America and elsewhere when Covid-19 becomes a part of history.
- THE RESTAURANT BUSINESS IS ESSENTIAL TO THE AMERICAN LIFESTYLE
As we return to some level of prosperity, once people are back at work and businesses turn in the right direction – it will be restaurants that allow families to manage their busy lifestyle.
We also must remember that the challenges that we faced before this outbreak will still be present during recovery – in fact those challenges will be even more significant.
- RESTAURANTS DO NOT PROVIDE QUALITY OF LIFE FOR ITS EMPLOYEES
Let’s figure this one out! Just a few months ago – the restaurant industry’s major issue was a lack of competent staff, a faltering retention rate, and millions of employees who felt under-appreciated and poorly compensated. This problem will continue – how will we address it?
- RESTAURANTS ARE NOT AS PROFITABLE AS THEY SHOULD BE TO ENCOURAGE ENTREPRENEURSHIP
Restaurants will fail, likely at a rate not seen in our lifetime. How will entrepreneurs be encouraged to take the leap and open an operation when profit (at best) hovers around 5-6%? We must rebuild with a model of operation that allows the entrepreneur to earn a respectable profit and move beyond week-to-week survival. When there are no reserves, when restaurants are so cash strapped and void of savings that a few weeks of closure is the kiss of death – then it is apparent that change is required.
- THE FAILURE RATE OF RESTAURANTS IS MUCH HIGHER THAN OTHER BUSINESSES
Various percentages float around – some as high as 2/3 failure rate in the first year and more than 50% of those remaining failing in the first five years – this is a huge issue. Banks will never view loans as a good investment with this level of failure and smart entrepreneurs will shy away until it appears that the rewards are worth the blood, sweat, and tears. Now is the time to figure this out!
- CUSTOMER NEEDS AND DESIRES ARE CHANGING AND WE MAY NOT BE READY TO CHANGE WITH THEM
How will we (you) stay in touch with customer needs so that concepts, menus, locations, methods of delivery, and pricing strategies align? Restaurants need measurement, assessment, and most of all – analytic data to help make correct decisions in this regard. Let’s work that into our recovery models.
NOW is the time to address these challenges head on – to research, brainstorm, develop new concepts, reinvent, and plan, plan, plan. Let’s view this break from operations as a positive opportunity to make the needed changes that have been looming for more than two decades.
ESSENTIAL READING FOR ENTREPRENEURS DURING THE LOCKDOWN:
Selling the Invisible, by: Harry Beckwith
Setting the Table, by: Danny Meyer
The Underground Culinary Tour, by: Damian Mogavero
PLAN BETTER – TRAIN HARDER
Harvest America Ventures, LLC
Now is the time!
Harvest America Ventures 