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How Foodservice Businesses Can Mitigate the Effects of the Coronavirus Pandemic

Posted on May 05, 2020 | by | Posted in Insurance

How Foodservice Businesses Can Mitigate the Effects of the Coronavirus Pandemic

With the coronavirus pandemic affecting the foodservice industry across the world, many Australian hospitality owners are facing unique challenges they’ve never seen before. Businesses owners in this industry are advised to monitor their last income statement to determine which areas felt the most impact. If the sales drop, how will that trickle down to the expenses? While labour and food costs can be adjusted, rent and insurance cannot.

Restaurant and cafe owners usually focus on pushing out food and beverages and what menu works best for their customers. But now is the time for owners to make crucial adjustments and become ‘numbers people’ in hopes of riding out the storm. Thankfully, this unprecedented downturn in business can be minimized by practising a few practical tips which we’ll discuss down below.

Approaching your staff

  • Before you let go of your staff, you have to establish a solid plan. Who will be the first to let go? And what will you owe them afterwards? Letting go of permanent staff members means there’s a possibility for redundancy payments. We suggest doing your own research to help manage your expectations when letting staff go.
  • Communicate with your staff in an open manner. With all of the attention-grabbing headlines today, being the bearer of bad news can be a tough pill to swallow. Despite this, your staff is expecting you to be fair before they get shown the door. Create an internal communication system like a WhatsApp or a Facebook chat group to discuss things openly with your staff.
  • Be prompt with the statements needed to give your staff the benefits that will help them support themselves without work. It’s important to have a good understanding of how this works as Newstart Allowance has been replaced with Jobseeker Payment as the main income support payment for individuals between ages 22 and pension age.
  • Not all staff have a clear understanding of the financial workings of the business. As a business owner, you owe them transparency by explaining to them your income statement. It won’t be pretty, but at least they get to view things from your perspective.
  • Insist on unwell staff to stay at home. Some staff may want to work while sick, but that is not okay given the current circumstances. Many will be casual which equates to no work, no pay.

Improving customer service

  • Take advantage of home delivery options whether it be food pickup thru your online ordering page or by using third-party systems (if the margins permit such costs). Adding a takeaway option is critical to keep your business afloat during this pandemic.
  • Consider upgrading your delivery platform. Customers are seeking ‘no contact’ payments like hygienic packaging and touch payments. Observe how big operators like McDonald’s make adjustments to their pickup and delivery space and try to emulate their practices as best as you can.
  • Maintain the highest level of food safety and hygiene throughout the entire kitchen. Assure your customers on your hygiene efforts to maintain their trust in your services.
  • Invest in better staff training. Improved cleaning, hygiene, and customer services translate into long-term benefits that go well beyond the pandemic.
  • Place a concerted effort to your admin and office systems. You can’t afford to waste time and efficiency at a time of crisis. Think about moving tasks online that still require paper and conduct payrolls, orders, and social media activities remotely.
  • Improve communication with your customers. Take advantage of various social media channels like Facebook, Instagram, Twitter, and Snapchat to build interest and let everyone know about your offerings. An interesting newsletter each week is a welcome addition considering that most people look towards cafes and restaurants for food comfort.
  • Maintain a warm and friendly service. Positive interactions establish deeper connections with customers, especially during a pandemic where people are surrounded by attention-grabbing headlines.

Other factors worth considering

  • Discuss the delivery and food availability with your suppliers. Chances are they’re having their own staffing issues to deal with, meaning your orders will be down and the entire supply chain may be affected as well.
  • Ask your accountant on how they can negotiate tax and bills payments with the Australian Taxation Office.
  • Have your lawyer talk to your landlord about rent payments. Paying full rent at a loss of revenue can hurt your business. Try to share your figures and seek what arrangements you can come to terms with to help soften the blow of the pandemic.
  • Learn about government support payments. These funds are being announced regularly which makes it crucial to know which ones relate to your business.
  • Talk to your creditors. They most likely have their own problems as well, but that doesn’t mean they’re unwilling to negotiate. Find out which of your creditors are tolerant and which ones you can negotiate with.
  • Check for cancellation terms on your function booking agreements. Evaluate the strictness of these agreements, see what you can possibly enforce, and make adjustments when necessary.

With the coronavirus pandemic threatening hospitality businesses, taking swift action is critical to reducing its impact. These practical tips can help you make better decisions on how to handle your staff, provide efficient customer service, and deal with other aspects of your business to help keep the operations running. Should you have any additional issues relating to insurance it is always advisable to speak directly with a hospitality insurance expert in Australia.

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