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The Complete Guide to Reopening Your Restaurant After a Closure

Restaurants are the lifeblood of society. They share different cultures with the community, they bring people together to socialize, they support the local economy and they play a pivotal role in many people’s lives.

In fact, by the end of 2017 revenue generated by the restaurant industry in the US was estimated at 799 billion dollars (almost 4 percent of the US GDP), according to restaurant.org. Add to that the fact that the US restaurant industry employs more than 14.7 million people, which is 10 percent of the overall US workforce, and it’s clear just how essential restaurants are for both the local and global economy. 

Meanwhile, a study by Deloitte found that there are more than 620,000 eating and drinking establishments across the US, with restaurants growing at a rate of twice the population of the country.

Clearly there’s huge demand for restaurants, and they play a vital role in our society - but competition is fierce. Restaurants that shut down must have a strong reopening strategy if they are to attract customers, improve revenue and build loyal brand followers.

To help your restaurant do just that, Sculpture Hospitality has brought together everything you need to know when reopening your business all on one consolidated page. 

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There are more than 1 million restaurants in the U.S. right now, said Hudson Riehle, senior vice president of the National Restaurant Association's research and knowledge group. And more are added every day: The industry adds about 10,000 units a year, from a combination of 60,000 openings and 50,000 closures.

“People keep saying this industry is competitive,” Riehle said. “They’re absolutely right.”

 

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How to Prepare for the Reopening of Your Restaurant

How to Prepare for the Reopening of Your Restaurant

Reopening your restaurant after a lengthy period of closure can be overwhelming, and it’s often difficult to know where to start. Before opening your doors, it’s vital that you sit down and create a management plan with a clear path of how your business will move forward over the next couple of months. 

By properly forecasting the future of your business, before employees get back to work and customers start coming through your door, you’ll be able to make sure you aren’t spending more money than you’re bringing in. Here are some tips to help you prepare for the big reopen:

Prepare for reduced business: If your restaurant has been operating for a few years, you should have a good idea of how sales affect your future forecasting and how to manage your inventory and staff to limit overspending. After a reopening, however, don’t take it for granted that these numbers will still be the same. Prepare as you would for a slow season, and slowly build your way back up. Customers will understand if you have limited capacity for a few months or a reduced menu. You don’t want to cripple your business by overspending.

Rethink your menu: Reopening is an opportunity to create a new menu based on the dishes that will make the highest profit, and the dishes that are the most popular among your loyal customers. Make sure you analyze the cost of any inventory for your old dishes, and make sure you still have strong per plate profits before reopening. Prices may have changed since you were last in operation.

Consider buying local: Consumers are becoming increasingly conscious of where the products they buy come from, and it’s no different when they enter a restaurant. In fact, 61 percent of Canadians say purchasing local food is important and nearly half would pay up to 30 percent more to get it, as reported by CTV News. When reopening, it’s worth taking a look if buying local could work for your business. Restaurants that do it have reported benefits such as fresher ingredients, improved brand image, better menus with seasonal items and a stronger local economy.

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Customer Communication is Absolutely Crucial for Success

Customer Communication is Absolutely Crucial for Success

In any time of uncertainty, there’s nothing more important than staying in touch with your customers and letting them know when you will open your doors again. Even when your business is closed, you still need to keep your restaurant visible within the community or you will be drowned out by competitors.

In fact, 90 percent of guests research a restaurant online before dining - more than any other type of business. It’s clear a strong online presence is crucial for your restaurant. 

By maintaining communication with your customers and keeping them engaged with your brand, you can actually create a buzz that drives increased sales and revenue for when you do finally open again. 

We strongly recommend creating a communications and marketing strategy that focuses on digital engagement. Not only is social media free to use, it’s an incredible way to keep in touch with both loyal and potential customers and share content that positions your restaurant as an engaged and active community leader. 

If you invest your time back into your community, your community will invest back into your business.

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How to Limit Food and Beverage Waste When Reopening

How to Limit Food and Beverage Waste When Reopening

To ensure you aren’t overspending once your restaurant has reopened, it’s absolutely crucial that you monitor your stock to ensure that bartenders aren’t overouring and that you’re not buying too much food inventory.  Many restaurants and bars struggle with this, since it’s pretty much impossible to monitor each member of staff on their shift and know exactly where food and drink may be being wasted.

That’s where an inventory management system comes in.

What is an inventory management system?

An inventory management is a system for tracking your entire food and beverage inventory. That includes the stock that comes into your restaurant, the inventory that leaves your restaurant and the stock that’s left unused. 

Rather than using timely and ineffective manual calculations to track your inventory, a food or beverage inventory management system will completely automate that tracking for you. By automating your back-end processes, you’ll have more time to focus on the important front-end of your restaurant. 

An inventory management system will ensure your assets aren’t being stolen, that you’re not wasting stock and that you don’t have a quality control problem. 

The result? Significant cost savings, the ability to maximize profits, decreased food and beverage costs, the reduction in shrinkage and waste, improved operational efficiencies and an optimum return on investments.

Work with an inventory management expert

Sculpture Hospitality was founded by a team of highly-experienced and passionate hospitality industry experts, and that’s why our food and beverage inventory management systems have become a one-stop-solution for restaurants and bars.

Our innovative system will revolutionize your inventory management processes and ensure that your business hits its profit and loss (P&L) goals. We do this by automating each stage of your inventory process, from counting, controlling, ordering and much more.

This final result will be less waste, more efficient processes and huge money savings.

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What Measures to Consider When Reopening During a Pandemic

What Measures to Consider When Reopening During a Pandemic

Global pandemics have a huge impact on the global economy, and often result in the temporary closure of businesses.

In fact, according to Restaurants Canada, the end of March 2020 (in the middle of the COVID-19 pandemic), lower revenues and social social distancing measures imposed by governments resulted in 53 percent of restaurants closing down their entire operation temporarily.

However, as we saw with the COVID-19 pandemic, it’s only a matter of time until your restaurant can open its doors again (if you haven’t already done so). You’ll need to take some extra precautions that protect the health of both your employees and customers.

To successfully reopen your restaurant following a pandemic, you’ll need to do a few things that are completely unique to the situation. We have listed a few tips here:

1 - Put employee and customer safety first

The safety of your employees and customers comes first. When reopening following a pandemic, make sure you follow the advice of your local health department - such as the CDC in the US. Measures you might need to implement could include anything from putting up safety posters and guidelines throughout your restaurant, wearing PPE equipment, setting up sanitization stations, investing in disposable menus, not accepting cash and much more.

2 - Train your staff online before going back to work

A pandemic will result in changes to industry standards and regulations, and that means you need to change the way your company operates. Before opening your restaurant again and heading back to work, make sure your employees are fully updated on how they need to change the way they work. Provide employees with online training sessions to ensure they follow these new policies and guidelines.

3 - Limit the number of customers coming into your restaurant

It may sound counterintuitive to profit, but following a health pandemic it’s important that you limit the number of customers that are coming into your restaurant. Not only will this ensure viruses cannot be spread between customers, it also helps you slowly work your way back up to full capacity after a few months of being shut. This will ensure that not only is your inventory management on track, but that customers are reassured by the approach you are taking.

4 - Reopen with a safety surcharge

Are you worried about making little profit due to affected supply chains ramping up the cost of inventory? Implementing a safety surcharge is one possible solution. By simply charging your customers slightly more on each meal, whether by increasing menu costs or naming it as a surcharge for extra expenses, it’s possible for your restaurant to make that money back. However, how effective this is will depend on your diners. You don’t want to frustrate customers and receive a torrent of bad feedback that impacts the future of your business.  

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Find Ways to Drive Additional Revenue

Find Ways to Drive Additional Revenue

When reopening a restaurant, it’s crucial that you don’t bite off more than you can chew. Trying too much in a short space of time without any real plan can result in huge chunks of wasted cash that have serious long-term implications for your restaurant. 

However, it is a good idea to look at a few additional ways to drive revenue.

Some restaurants that reopen have a huge amount of buzz that drives large numbers of customers and significant profits. For some restaurants though, it may take some time to build that customer base backup.

If you’re expecting a slow start, then why not look into some additional ways that you can drive revenue for your business? 

Take this restaurant, for example, that transformed into a grocery store during the COVID-19 pandemic. Rather than closing its doors, Oceans 234 transformed from restaurant to grocery store. If you are anticipating a slow start after opening your business, then try and find creative solutions to drive additional revenue. 

Maybe you have a unique sauce you can sell to loyal customers. Do you brew your own beer? There are plenty of ways you can drive up profits even in those early months when your brand is still gaining traction after reopening.

Another huge opportunity for restaurateurs to increase revenue is through developing a successful takeout strategy. In fact, in 2018 Frost & Sullivan estimated the takeout industry at $82 billion in terms of gross revenue bookings, with that number set to more than double by 2025 to $200 billion. 

You can read our blog below on how to develop your very own takeout strategy that will drive happier customers and increased profits. 

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Put Staff Retention at the Forefront of Your Business

Put Staff Retention at the Forefront of Your Business

Both restaurants and bars face huge challenges when it comes to employee retention. Unfortunately, high employee churn rates are preventing many restaurateurs from growing their business. 

Figures from the Bureau of Labor Statistics found the overall turnover rate in the restaurants and accommodations sector was 74.9 percent in 2018, up from a rate of 72.5 percent in 2017.

This is well beyond the average turnover rate of all industries that stands at around 17.8 percent according to the 2016 Compensation Force study.

While you may be tempted to fire people during restaurant closures, this could have much more damaging long-term implications than short-term benefits. Remember, the slow season is temporary but your talented workers are permanent - as long as you keep them giving them a reason to stay in their job.

Instead of firing people, look at ways to cut back costs through supplies, inventory, benefits and bonuses rather than losing your best employees forever. Read our blog below on how you can ensure you retain your most talented workers for the long haul.

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What Happens if My Restaurant Closes Again?

What Happens if My Restaurant Closes Again?

There’s always a risk that your restaurant will have to close again, whether it’s down to government regulations, a health pandemic or even to undergo a renovation to your space. If this happens, it’s important that you are properly prepared to protect your assets during shutdown.

You can make this experience easier by taking some steps to improve cash flow, better organize your operational processes and rethink the way you manage your business for the short-term.

Here are just a few tips that will help your business:

Plan and budget for slower times: Whether you are anticipating an eventual shutdown or not, it’s crucial that your business is putting away some extra cash for more difficult times. Restaurateurs who spend all their profits when they are doing well, will eventually cripple their business when times become slow. Think carefully about how much money your business can spend, and what the return on investment will be for that expenditure. It’s always a good idea to save between 5 and 10 percent of all profits.

Protect your assets: When your business shuts downs, you’ll likely have stock left in your restaurant. Not all of your assets are perishable, and you’ll want to save what you safely can for when you reopen. Take your beverages for example, beer will last inside your kegs for 90 days - but you can increase this time by taking some simple steps such as draft beer system cooler, unhooking kegs and turning off the gas system. By taking some simple measures to protect your assets, you’ll save your restaurant or bar huge amounts of money in wasted inventory. 

Turn unused stock into cash: Most restaurants and bars are overstocked. In fact, 80 percent of most restaurant sales come from just 20 percent of their product range. If you are closing your restaurant and are not anticipating using that stock, then why not sell that dead stock? This way you’ll be turning unused stock into cash that will better help your business survive leaner times.

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