The food ecosystem has changed since the World Health Organization (WHO) declared covid-19 to be a pandemic, leaving restaurants scrambling to survive. Most restaurants are transacting only about a 10th of the business they were before. Restaurants have to figure out how to handle their finances to stay afloat. Demand has slowed down significantly, and the restaurant industry has been forced to lay off workers. Takeout and delivery are not enough. Restaurant design also needs to be thought upon to manage your restaurant finances.
While governments around the world are taking steps to stabilize the economy, it is also important for businesses to be prepared. Making a choice between letting people go or cutting back on pay is bound to be a difficult one. Here are a few restaurant cost control strategies that you should be practicing:
Refrain from Putting Too Much Pressure on Your Investments: Take a look at your goals for the current financial year and make sure your investments are aligned with them. If you need to change your strategy based on the dynamics of the market go ahead and change. While some think it’s good to buy new stocks since the time is right, some disregard that advice. Ryan Marshall, a New-Jersey based certified financial partner advises, “It’s more important to invest on a consistent basis than to try to get a deal. Put fresh investments on hold and instead try to keep your money in a “safer place”. Having multiple savings accounts would help you stand strong during the epidemic”
Increase Your Emergency Savings: Stabilized emergency fund should be the foremost financial concern. In the restaurant industry, there are hardly any mandated paid sick leaves, so even if you miss a single day of work, you might lose your job. Setting up an emergency fund in place and a plan to access lines of credit is the most important thing you can do now. As suggested by financial advisers, make a list of all non-essential expenditures and recurring subscriptions/memberships. Rank them in order of importance and then cut out the items that are not in top priorities.
Look At The Silverline: It’s the time to focus on delivery operations. To stay in the game, we must go with what’s been trending and the restaurant design should be planned accordingly. Restaurants globally are switching to a delivery kitchen business model or tying up with delivery applications. Moreover adapting to the current situation by making required changes in your business model is more of a necessity than a choice. Many restaurants have moved to cloud kitchens and contactless delivery and have created an emergency fund to cover the needs of their delivery staff
Take steps to manage your inventory to ensure restaurant food cost control: Track the daily Stock-in and Stock-out and the actual consumption throughout the day. Get tools to measure the portions and to control the size of the portion in order to control the price and reduce waste. Another important tip that you have to follow is to keep regular track of your overall restaurant business. Real-time reporting comes extremely handy in this case.
Support Others Amidst The Crisis: If you are privileged and have enough money to sustain your business during these critical times and you are healthy and have a constant income, you can help colleagues or employees that are most hit by the pandemic
Step Away From The Fear: You need to understand that there is absolutely nothing you can do to prevent the fallout of the pandemic, apart from staying home and taking necessary precautions to be safe. Alexander Koury, a Phoenix-based CFP, says, “In every previous health scare, the markets reacted negatively, and over the course of three to six months after the initial shock, markets returned to normalcy, and in most cases, the markets produced a positive return.”
Implement these tips in your restaurant’s budgeting and price control measures and you will have a sense of security with your finances.