Yaneek Page | Ideas to save a business severely affected by COVID
Published:Sunday | July 19, 2020 | 12:26 AM
ADVISORY COLUMN: SMALL BUSINESS
QUESTION: At this very moment I am totally lost because my client base for my restaurant decreased drastically over the past two weeks. I went through my books thoroughly, looked at my structure, and I revamped. Right now, I’m just hanging here with my team, staying consistent and riding the wave. Honestly, it would help me if it’s even one sentence of advice.
What I am trying to do now is develop another stream of income, adding a juice line to the brand. My customers are used to the variety each day, so that’s what my demographic wants. However, one of the biggest things is that they believe I am making a lot of money and getting big. They just don’t support young people and believe we must fight hard. My corporate people who support me always owe me, and when I get stern with them, they get vexed and don’t come back.
– D.
BUSINESSWISE: I’m truly sorry that your business has been buckling under the stress of the current global pandemic. Unfortunately, the severe social and financial fallout from COVID-19 is proving to be a once-in-a-lifetime phenomenon, surpassing even the most grim economic predictions.
For the first time since the Great Depression of 1920, every single region of the world is in recession, and Jamaica is no exception. In fact, our over-reliance on tourism has made us more vulnerable than several other countries to the current economic shock waves.
Focus on what you can control
While you have no control over the external environment, or the timeline for economic recovery, you do have complete control over your business strategy, decision-making, and pivoting for survival.
The first pivot must be your mindset. Stop worrying about those you believe are unsupportive because you’re ‘getting too big’ or are ‘too young’. Those aren’t your target customers, and you may never win them over. Obsessing over their views isn’t just a waste of time, it’s an unnecessary distraction and drain on the energy you need to withstand the current economic storm.
The other mindset shift you need is recognising that all your customers and potential customers may be affected. They too are in survival mode and will have to learn to manage with less for now. Redefine, therefore, what managing with less would look like for your own business, personal income, and expenses.
Reduce food costs
I note that you already reduced all your major expenses except the most costly: food. While your customers want variety, you won’t survive with runaway food costs. You need to rework the menu to reduce costs and waste while meeting your customers’ needs.
Encourage pre-orders
To further reduce waste, consider publishing a weekly menu on a Sunday and/or Monday and actively encourage regular customers to pre-order and even pre-pay for the week. You can offer incentives for prepayment such as ‘free drink with every meal this week’. This is a great way to lock in your customers, discourage credit, boost positive cash flow, and support better planning. I looked through your social media pages and didn’t see any weekly menus or consistent daily menus and pricing.
Review credit terms
Survival requires a review of credit arrangements with customers. For good customers who have built a relationship with you and pay monthly when they receive their salary, you may continue extending credit - but with limits.
Note that cash is still king, and running out of cash can wipe out your business, especially now. As a rule, offer minimal credit and instead, encourage pre-payments or payment on delivery.
Push profitable ‘specials’
Survival necessitates being strategic about what you sell. Since you’re selling fewer meals, ensure that you are maximising profits on what is being sold. That may mean creating daily specials from the most profitable meals. For example, fried chicken may be in greatest demand, but curried chicken may be more profitable or vice versa.
Lead with the most profitable meals as the specials and push those daily. Ultimately, the aim is to influence sales that really count.
Marketing and engagement
Finally, keep marketing and positively engaging your customers and team. As challenging as the times may be, now is when you need to show up positively as a leader for your team and for your customers.
Encourage your employees, engage with your customers more, keep marketing and advertising as your budget allows, and convey positivity in all you do.
People literally feed off your energy and leadership, so if you constantly complain and are negative or dreary, it affects how your employees show up, the service your customers receive, and, ultimately, the outcomes for your business.
Good luck!
Yaneek Page is the programme lead for Market Entry USA, a certified trainer in entrepreneurship, and creator and executive producer of The Innovators and Let’s Make Peace TV series.