Profit Insights: A Major Course Correction

You're the pilot of a commercial airliner with 150 passengers aboard. You have an emergency, such as an engine failure, fire onboard the aircraft, aircraft damage as a result of a collision, bird strike, extreme weather, or bomb threat.

What do you do? First, you don't panic. Second, you likely reach for the appropriate checklist for procedures.

You might recall US Airways Flight 1549 in which an Airbus A320 airplane struck a flock of geese after takeoff from New York's LaGuardia Airport. The pilots, including celebrated Captain Chesley Sullenberger, successfully ditched the aircraft in the Hudson River and all passengers aboard were saved. If you research the events, you will learn the pilots followed checklists on restarting a failed engine, configuring the aircraft for a ditch landing, and other procedures.

We don't have to tell you in the path of COVID-19 the restaurant industry has just struck a flock of geese and we're all losing altitude. We believe we can still have a safe landing if we keep our heads and attend to important matters.

In this issue, we are dedicating Profit Insights to a checklist to use in this crisis or any emergency.

FINANCE CHECKLIST

• Quickly gather as much restaurant financial information as possible for use with bankers, landlords and government authorities to explain the situation.
• Call accountant to prepare necessary employee history and earnings for unemployment filings, including:

• Employment date
• Birthday
• Hours worked during previous 12 months

• Use financial information to apply for loans with Small Business Administration and other Government agencies.
• Contact landlord or mortgagee to discuss alternative payment options, including rent abatement and deferral of common charges and maintenance fees pursuant to triple net lease. Don't wait for them to call you.
• Contact your attorney to discuss legal obligations to employees and vendors.
• Use all available resources, including RestaurantOwner.com to stay abreast of government mandates and programs related to employee benefits and notifications.
• Be vigilant regarding online and mailed financing scams, which are growing as the crisis expands.

VENDOR CHECKLIST

• Call each vendor about possible extended terms for outstanding invoices.
• Cancel or suspend all items not needed for duration of crisis, such as trash collection and compressed gas for carbonated drinks, and cleaning and linen services.
• Put pending capital improvement projects on hold.
• Contact alcoholic beverage distributors about buy backs of wine and liquor.
• Survey your restaurant's premises for security problems, such as inadequate lighting, while restaurant is inactive.
• Contact local police and security to let them know current hours or closure for increased patrols.
• Contact security and fire alert vendors to notify them of changes and updated contact information.
• Contact insurance company to inform them what you are doing to protect business and to solicit advice to lower your risk and keep your premiums in check.
• Review online and TV contract for services that are not being used, such as televised "sports packages" that can be discontinued.
• Insure essential online services and telephone remain active when cancelling non-essential services.

UTILITIES CHECKLIST

• Contact all utility services, including electric, gas, and water to learn about any programs or terms they might be offering to delay payments or to find out about any interruptions of services.
• Set thermostats to save energy costs in areas of your restaurant that are not be used.
• Make sure all utility emergency services contact information is forwarded to the staff members on duty.

KITCHEN CHECKLIST

• Secure food storage against possible theft including limited access to pantry and walk-ins.
• Determine which inventory can be frozen for use at a later date.
• Disconnect equipment that is not in use, including ice machines and non-essential refrigeration.
• Check water and gas connections, including those in the restroom, to ensure they are either tightened or turned off. Water damage is the leading cause of insurance claims.
• Fine-tune all kitchen and inventory systems for re-opening when business returns.
• Deep clean kitchen areas that are not in use.

MARKETING CHECKLIST

• Convert marketing programs to communication vehicles to customers to apprise them of your current situation and keep them abreast of hours and service.
• Look to cut marketing expenses. If you are doing direct mail now is the time to clean up your lists.
• Where possible & necessary reduce promotional expenses. This is a good time to clean up lists.
• Offer deals to loyalty program customers as they are most likely to patronize your business during this crisis.
• Use social media with videos of activity at the restaurant, and particularly demonstrating cleanliness of the kitchen and food preparation, with a personal message of thanks and good wishes from the owner(s).
• Use your customer database, signage, your Facebook page, online community groups, and the local newspaper to let everyone know about your take out, home delivery, and/or meal replacement options.
• Put a thank you note, a special offer or incentive to order again (BOGO, etc.), and information about your community efforts in every to-go package. Invite your customers to let you know if they know of anyone in need of food.
• See what your competitors are doing well by patronizing them with takeout and delivery orders.
• Put your best people on the front line with customers. That includes those who will take orders cheerfully, smile at guests when they pick up their food, and make people feel good about patronizing your business.

TAKEOUT CHECKLIST

• Build a spreadsheet to perform a cost-benefit analysis of your takeout and delivery service to determine if prospective sales are worth the expense and effort of remaining open in terms of operating cash flow.
• Consider your concept's takeout and delivery menu, in terms of what requires minimal labor and food cost, value, and travels well.
• Contact your POS vendor to determine if they have add-ons or features to make online ordering more seamless for guests and your staff.
• Provide takeout and delivery reheating and home preparation instructions with all orders.
• Create value-added specials for families such as dinners for four, including appetizer, salad, entrée and dessert.
• Use proper packaging if necessary provide utensils, napkins and condiments. Don't skimp on bags and boxes; they represent your brand.
• Offer bottled drinks, such as sodas and teas, as add-on items.
• Create added-value thank you- items to be included with orders to create customer loyalty, such as gift cards for future orders or a free menu item.
• Be certain to include a business card from the owner or general manager with a note outlining steps should customers not be satisfied. If contacted, promptly reply courteously and to solve the problem.
• Create a system to check order taking and fulfillment to insure customers get what they wanted. Ask about allergies, special food preparation or dietary requirements.
• Create a telephone answering script. Add a personal touch by making sure customers know the name of person taking their order.
• Phone calls must be answered as promptly as possible, and in a professional manner -- Thank you for calling.
• Pay attention on how menu items are placed in containers. They need to look attractive and appetizing.
• Be sure to track all orders and hold accountable all delivery drivers.
• Follow up with all customers later that day or at the latest, the next morning, to determine if they were satisfied.
• Include a list of future specials and of course, the takeout and delivery menu with all orders.
• Create a simple frequent takeout and delivery diner program; for example, every fourth order receives a $10 or 10% off discount.
• Offer an additional entrée with orders over a certain amount; for example, if they spend $50 and receive an order of pasta at no additional charge.
• Document all takeout and delivery processes and methods to apply to regular restaurant operations to enhance your business when the restaurant is open for dine-in customers.

ATTITUDE CHECKLIST

• Stay positive even in tough times. Staff and guests notice.
• Control your emotions. Talk to your staff about this. If people are short-tempered, be forgiving. Recognize that everyone is under major stress, especially now. Give them the benefit of the doubt. Don't take it personally. Tell your staff to do the same.
• Don't sell too hard! Competition is not your biggest issue. We're all in this together. It's all about taking care of each other, our community, and our industry.
• Start a GoFundMe page for donations from your community to help you feed people or families in need and publicize it via your social media.

ADDITIONAL RESOURCES...