According to the National Restaurant Association, the restaurant industry experienced an estimated $240 billion losses in sales. About 12.5 million people lost employment in 2020, and more than 110,000 foodservice companies and restaurants closed their doors to customers.
The report highlights that nine in ten restaurants in the U.S do not have more than 50 employees. Nearly seven in ten restaurants perform single-unit business operations. Restaurant operators have experienced drastic changes during the Covid-19 pandemic. It is crucial to focus on industry trends to plan for budget, staffing, marketing, technology, and menus.
This 2021 step-by-step guide to operating a restaurant effectively will help operators mitigate the harmful effects of Covid-19 and make necessary changes for 2021 to streamline their business operations. Research shows that 2021 is a challenging year for all restaurant brands.
Read this guide to establish or revise your restaurant business plan to operate your restaurant effectively and keep your doors open for customers. The guide will help you get prepared to overcome challenges and explore new opportunities in 2021. Read on!
Step 1: Make or Revise Your Plan
The first step to revise your restaurant business strategy is to focus on your planning. There is no alternative to a well-inscribed plan, making it easy for your stakeholders to understand it and follow the guidelines.
There is no need to write or develop a comprehensive plan because if your team or staff does not understand it, the plan won’t work. Therefore, start with a few pages and write a plan that focuses on different strategies, methodologies, and tactics that you will implement in 2021. Your plan must focus on the following essential strategies!
What are your business verticals and revenue generators? Are you going to revise your strategy and continue grab-and-go, family meals, catering, takeout, and delivery? Make sure you choose revenue generators that go in-line with your business and brand.
The Right Staff
Take your time and evaluate your business strategies, especially about your staff. Do you have qualified and experienced staff to follow new guidelines and practice the new-normal protocols? How will you train your team, and what are your employees’ wellness and safety programs for 2021?
What new changes will you make in your business considering the Covid-19 pandemic, unpredictable lockdowns, and social distancing? Outline the number of changes that you will implement for the year 2021. Will you update your capital expenses budget? How will you do this? Will you consider the current and forecasted revenue? Answer these questions in your business plan.
Public relations is a sophisticated approach to establish your advertising and marketing strategies. The purpose is to create a reliable, effective, and customer-friendly reputation for your restaurant business. What are your public relations and marketing strategies for 2021? What marketing medium do you think will help drive more customers to your restaurant?
The restaurant menu is one of the factors that keeps on changing from time-to-time. Your menu was different in 2019 and 2020, and it’s going to change in 2021. Does your menu align with new potential business verticals and trends? Are there any problems with your supply chain channels?
Restaurant operators are more likely to eliminate various non-essential services in 2021 due to a lack of resources and budgets. What is your plan for removing and keeping some of your services to support your business operations? It is crucial to focus on cash-flow projection. What parts of your business generate more revenue?
Step 2: Focus on Revenue Generation Options
The Covid-19 pandemic has caused unbelievable changes in the restaurant industry, causing operators to think and act creatively to create revenue generators. For instance, have you ever heard restaurants sold flour bags and toilet papers in the pre-pandemic era?
Restaurant operators came with these wise ideas considering the challenging times. Adopting and implementing such ideas streamlined many restaurants’ revenues. People take desperate measures in desperate times and adopt strategies that are best for business.
What are the things that will stay for the long-term and leads to higher revenues? Dine-in guest traffic declined before and during the pandemic due to strict lockdown measures. However, authorities have allowed restaurants to offer dine-in services at a limited capacity, making it difficult for operators to develop a long-term strategy.
If you want to keep your restaurant doors open for customers, we recommend focusing on takeout and delivery options. These strategies are effective for fine and casual dining segments. You can also take advantage of a drive-thru or off-premises sales to fill the delivery gap.
Self-delivery is another viable option for restaurant businesses because the delivery fees of third-party vendors will remain unsustainable. Self-delivery will expand in 2021 with the development of technological tools and apps. Technology advancements in self-delivery apps will make small restaurants more efficient and competitive in the market.
Most consumers stop by their favorite food outlets and restaurants for dining. Takeout will continue to grow in 2021 rapidly because consumers familiarize themselves with curbside ordering services from different restaurants. If the takeout strategy works for you, go for it.
Because catering has declined significantly, restaurants focus more on individual meals instead of usual buffets. The purpose is to maintain social distancing and ensure small gatherings remain in effect. Catering was one of the most effective revenue streams before the outbreak of the coronavirus pandemic.
Although catering has declined, consumers feel more comfortable in groups and gatherings because they are integral parts of the social fabric. Government and state regulations will play a substantial role in the recovery of catering as they relax group size requirements and social distancing restrictions.
As a restaurant operator, you need to evaluate whether grab-and-go and selling pantry items will work for your business. Assess your options and ensure they make sense with your brand. In 2021, grab-and-go is an effective strategy that expands takeout sales because customers prefer value and convenience.
Restaurant businesses are removing pantry items from their offering because consumers are more inclined toward curated lists of items from specialty retailers and restaurants. Take-home meals or meal kits are back in business, and their popularity will increase more in 2021. Therefore, if your budget allows, make sure you think about selling meal kits.
Step 3: Revise Your Staffing Strategy
Unemployment rates have surged for the last one year due to the Covid-19 pandemic. The health, wellbeing, and safety of staff and customers are of utmost importance in 2021 for restaurants. We suggest focusing on training and health coverage for your employees because the working environment in business models for restaurants will undergo considerable changes in 2021
In 2021, many restaurant operators are likely to see health and job security concerns from their employees. Therefore, we suggest reforming your culture and communication strategies with immediate effect.
Your employees may want to be part of your business if its culture goes in line with their values. Make sure you focus on proper communication channels and align your brand’s external and internal messaging.
The restaurant industry shrinkage has caused operators to staff their businesses without open positions. Bear in mind that mid-management ranks will see higher unemployment rates. Therefore, we recommend you ensure job security for your employees so that they remain loyal to your business and optimize your business operations.
Besides, you must invest in employee training to ensure the development of new skills. That way, you can significantly improve your business culture and streamline relationships with your employees.
Well-trained employees will save your restaurant time and money, leading to increased productivity and profitability. Ensure every member of your workforce, including kitchen staff, waiters, and managers, receive continuous training to remain efficient.
Step 4: Remodel Your Restaurant Design
Although remodeling your restaurant design depends on budget and resources, it can benefit you in the long run. If you have means, make sure you take advantage of this opportunity and remodel your kitchen and dining rooms. Bear in mind that social distancing will affect your dining room capacities during the Covid-19 pandemic and in the future. Here are a few suggestions:
Upgrade your HVAC Systems
Upgrading your heating and cooling (HVAC) systems with ultra-violet (UV) filters and HEPA filters will maintain indoor air quality and reduce environmental allergens transmission, including microbes like bacteria, viruses, and even the novel SARS-CoV-2.
Incorporate Contactless Sinks
Incorporate contactless and hand sinks into your restaurant’s dining rooms. Make sure you also install them in the service areas. Likewise, your staff must wash hands using these contactless sinks in service areas. The purpose is to show your customers that your team follows all hygiene protocols. That way, you can earn your customers’ trust and expect more word-of-mouth marketing.
Expand Kitchen Space
The Covid-19 pandemic will continue to evolve restaurant designs as most businesses see fewer guests eat food in the dining area. Therefore, shrink your dining space and expand your kitchen area to keep up with this evolution. Restaurants are more likely to adopt smaller footprints strategies in 2021, and this trend will continue through 2022 because dine-in guests are unlikely to see a rebound to numbers before the Covid-19 pandemic.
Incorporate Touchless Solutions
Pay attention to touchless solutions, whether they are sinks, doors, windows, and other parts of your restaurant. Revise your design strategy by incorporating sanitizer stations for your staff and customers.
Change your restaurant “in” and “out” pathways by having more takeout areas. Likewise, install exit-only doors to protect your customers from getting infected with Covid-19. Because outside dining will grow more in the coming months, you should provide practical and safe outside dining facilities. If you are running a fast-casual restaurant, determine different ways to incorporate pickup or drive-thru windows.
Step 5: Review Your Marketing Plan
A restaurant marketing campaign is essential for keeping your existing customers loyal while attracting new ones to increase your customer base. Effective marketing shows your customers that you not only offer the best meals but also value them. Here are a few marketing strategies you need to incorporate into your plan.
Social Media Marketing
Hire a team of professional social media marketers to run your campaign. According to Statista, over 190 million people use Facebook, and according to Backlinko, over 120 million Americans use Instagram.
Likewise, video marketing is an effective strategy that you can use on social media channels like Facebook, Instagram, and Twitter. Videos will make your potential and existing customers addicted to your restaurant business.
Marketing through videos on YouTube or social media sites will give your restaurant to showcase your business features while integrating stylistic kitchen and dining area photos, engaging food-related music, and fun graphics that attract people.
Use these social media channels to generate more customers during the Covid-19 pandemic. It is an excellent opportunity to represent your business to people who are adopting new ways and creating new habits.
Make sure your digital marketing team conveys an attractive, compelling, and relevant message to your target audience. That way, you can increase awareness while focus on new trends to establish your business on social media and drive new customers.
Convey Your Restaurant Policies Restaurant Effectively
Whether you use social media marketing, YouTube video advertising, or blogging, you must focus on conveying your restaurant policies to your potential and existing customers. Remember, your message should focus on your customers’ health and safety. Consumers will shop or order food from your restaurant when they feel your business follows the Covid-19 safety protocols and sanitation standards.
- Post policies on your website
- Post videos on social media
- Communicate your message on YouTube
- Offer promotional offers and incentives
Sit down with your marketing team and discuss the methods they will use to communicate these messages on your website, third-party sites, social media platforms, like Facebook, Instagram, Twitter, and merchandising materials.
Implement Traditional Marketing Strategies
The effectiveness of traditional marketing strategies has resurrected during the Covid-19 pandemic because out-of-home advertising, such as billboards, can drive more customers to your takeout and dine-in business.
Unlike other restaurants that focus more on digital marketing, you should combine both traditional and contemporary (digital) marketing methods to achieve a greater marketing-mix. The purpose is to convey your message to your customers at all levels.
You can also use cable ads to reach your target customers. Cable ads are effective in targeting a specific demographic population in the local area. Moreover, integrate loyalty programs with your POS system, online ordering, takeout, and delivery platforms.
Step 6: Focus on Trending Menus
The Covid-19 pandemic has led to many changes in the business world, especially in the retail and restaurant sectors. The new normal is evolving rapidly in front of all Americans. The restaurant menu you had last summer won’t be the same this year.
The pandemic has caused rapid paradigm shifts for restaurant operators, and new menu changes will continue for many businesses in 2021. As you move forward, converge your old and new menu strategies while adapting to the right mix of menu items, value, and price points. The purpose is to make your menu more appealing for potential and existing customers.
Supply Chain Flexibility
You may see disruptions in your menu design initially because supply chain constraints imposed by the government have led to record-high prices in beef and pork markets. Although this will level out, it will cause a significant effect on availability, prices, and profits.
Therefore, we suggest you consider supply chain problems and bring flexibility while focusing on your consumer demand. Because customers will see evolution in their interaction with your restaurant as you open dining rooms, people get back to work, and children return to schools.
Balance your Menu
During the Covid-19 pandemic, consumers prefer more value from businesses, including restaurant and food service companies. Some consumers look for value, while others seek indulgent items they can’t cook at home. Balance these two aspects in your menus to attract both groups – those that seek value and people who prefer their favorite food items at your restaurant.
Step 7: Optimize Your Financial Strategy
Many restaurants find it challenging to manage and control cash flow, expenses, and sales projection. Remember, these challenges will continue throughout 2021. You can tackle these problems by focusing on the expense side of the profit and loss.
Your primary objective is to determine your sales channels and evaluate the effect of the pandemic on your changing business conditions. The provision paycheck protection program will impact your business, depending on the option you choose. We recommend:
- Focus on a cash flow forecast
- Make seasonal budgets
- Avoid relying on credit
- Inventory management
- Rely on multiple vendors
- Consider overhead cutbacks
- Follow accounting often
During the Covid-19 pandemic, it is difficult for restaurants to produce constant and reliable sales. If you want to grow your restaurant business, use this 2021 step-by-step guide to operating a restaurant has discussed different aspects of strategic planning, design, marketing, menu development, technology, and evaluations. The steps given above will help you optimize your business development solutions in 2021 and enable you to operate your restaurant successfully.