Among the most challenging small businesses hit during the pandemic were restaurants. Restaurants in 2020 had to close their doors, and while some were able to do takeout and delivery, others were unfortunately not and eventually went out of business. Without question, the restaurant industry was detrimentally impacted by COVID. While programs like the PPP did help, the struggle since the pandemic for many restaurant owners has yet to get any easier.
In May 2021, the federal Restaurant Revitalization Fund was launched. Initially valued at nearly $30 billion, the program was explicitly designed to help restaurant owners and caterers desperate to keep their doors open.
The program has since run out of money. Still, new initiatives have been proposed to get Congress to pass yet another round of funding within the context of the Restaurant Revitalization Fund. According to the SBA, single location restaurants may be eligible for up to 5 million in aid. In contrast, multiple location restaurants could apply for up to 10 million. The money was given out by way of grants, meaning, restaurants, caterers and bars did not have to pay the funds back. We can only hope that Congress will back another round of funding.
The current effort aims to get 60 billion in funding to bail out restaurants still uncertain about their futures in this climate. While restaurant owners wait to see if Congress is going to help, they can take steps and things they can do to ensure that their small business has the best chance of staying open. In this article, we look at a few strategies that might help restaurants keep their doors open.
A Difficult Climate for Restaurants
Without question, given the surge of the Omicron variant in the past few weeks, restaurants are facing even more formidable challenges than anticipated. Many are unsure how long they can sustain in this environment. Some things that restaurants and other small businesses, for that matter, might do to help stay afloat in a tough economic time…
There are possible ways to cut, money that can be saved, and areas in which the budget can be trimmed. From keeping better track of inventory to reducing portion sizes if necessary to look into your overall staff costs, you have to stay on top of every single facet of your business as a restaurant owner.
Make sure you have access to cash
Having a steady cash flow is critical for any restaurant or small business. Whether this means liquidating some of your assets or borrowing from family members or people you know, you need to do what is necessary to stem any cash flow problems that you might have. Another good option here would be to apply for a restaurant business loan. Alternative and online lenders especially are great at accommodating small businesses who need cash quickly. Whether you apply for a line of credit or a short-term loan, looking into a restaurant business loan is a smart move during downtime.
Know who you are hiring
Particularly with labor shortages abounding around the country, some restaurant owners seem desperate to hire anybody. This is not necessarily the best strategy. What happens then is that you hire people who cannot be trusted, people who don’t have your best interest at heart, and people who ultimately might hurt the business. Be very deliberate in your recruiting, hiring, and onboarding processes. Having good people on your team will save you money in the end.
Be mindful of quality
While unfortunately, you may have to rethink portion sizes, this does not mean that you have to sacrifice quality. In fact, just the opposite is true. People don’t have as much to spend on nights out or meals at a restaurant. This means that they are going to be even more discerning when choosing where to eat. Quality counts—make no mistake about it.
Spend more money on marketing
Money may be tight right now for your restaurant. However, you still have to get people in the doors. You still have to entice people to order from you. How do you do this? A dynamic marketing campaign will help you attract more customers and thus increase your bottom line. Please make sure that your digital footprint is where it needs to be. You might need to hire an online marketing expert to this end. And again, a restaurant business loan could be the way to help you enhance your marketing efforts.
First Union Lending is Here to Help
Restaurant business loans can mean the difference between staying afloat and having to shut your doors for good. As we wait to see if the government will replenish the Restaurant Revitalization Fund, other options are available to small business owners. We would love to talk to you about your financial needs. Call today.