Top Tips to Survive the COVID-19 Crisis as a Café or Restaurant

TOP TIPS TO SURVIVE THE COVID-19 CRISIS AS A CAFÉ OR RESTAURANT. ( Inc links to govt help).

At this time when the hospitality industry is being hit the hardest, the strategy is to survive and to hold all your systems and brand intact so that you are ready to bounce back on the other side of the lockdown. It’s difficult to predict how the landscape will look after the crisis, but maintaining a relationship with your staff, suppliers and landlords will be key to how quickly you can get back on your feet. Here are several things that cafes and restaurants can do during this time. It includes links to the govt grants and loans available to small business as well.

  1. SWITCH TO TAKEAWAY MODELS – A CHEAPER MENU THAT IS EASY TO TRANSPORT AND EAT AS WELL AS NEW COMBOS, HAMPERS & TAKEAWAY ITEMS NOT OFFERED PREVIOUSLY.

If you haven’t done so already this is the time to streamline your menu offering so that it’s takeaway friendly, can be transported easily and presents ok after travelling back home. Also, as you will probably have reduced kitchen staff, the menu should be streamlined and easy to prepare. If you can try and offer more than the usual wraps, sandwiches and burger offerings that everyone else does it will help differentiate you. Also mix up your takeaway offerings to include produce to cook at home, sauces, cook at home meals and banquet packs. To try and increase minimum spends venues are combining family feasts, banquet packs and produce packs etc to make it worth while. These can also be another line of revenue once lockout ends as well.

2. OFFER ALCOHOL WITH YOUR DELIVERY

Venues with licences have been increasing their margins with alcohol sales on top of their food sales. Think of great combos that would appeal to your customers. This is a fantastic way to increase the total spend.

3. CREATE YOUR OWN LOCAL DELIVERY IF THE DELIVERY PLATFORMS ARE TOO EXPENSIVE

Delivery platforms are great but because right now, every % of your margin counts, giving more profits to third party companies just isn’t feasible. Some venues have turned their staff into local delivery drivers to reduce costs. Your support at this time is primarily from locals in your area, so once you create awareness that they can get food delivered, then you can start to build a local loyal base that will help you through this time. Most people are supporting their local businesses right now so make it easy for them!

4. GET OLD FASHIONED LOYALTY CARDS GOING SO IT ENCOURAGES REPEATED BUYING.

While everyone is supporting local, you should get that old fashioned loyalty system going with punch cards if you don’t already have a digital system. From coffee to any orders so that locals have an incentive to keep coming back. With every takeaway or delivery order comes a chance for loyalty marketing through a card and flyer with a menu to encourage repeat purchases.

5. ADVERTISE ON FACEBOOK/IG OR AT LEAST POST ON YOUR LOCAL FACEBOOK COMMUNITY PAGES.

The best way to let people know you are open right now is via social media and very tight geo-targeted ads to be front of mind to your local crowd. It’s important to focus more on community reassurance and care in your tone of voice rather than being too pushy and sales-focused. Tell your community how you are implementing new health procedures and supporting your community’s needs as best as you can in light of the situation.

6. PLAN FOR LATER IN THE YEAR AND POSTPONED EVENTS

For now, big days such as Mother’s Day, EOFY functions and public holidays will be postponed but think of how your promotions and events could be rescheduled later in the year or catered for differently. Special dishes or takeaway family feasts can be created and promoted. People are looking for a break from the monotony of staying home and cooking, so give them something to look forward to. We know of businesses that are preparing Mother’s day take away packs and spreads to enjoy.

7. GOVERNMENT FINANCIAL HELP.

There is an unprecedented amount of financial assistance for the hospitality industry from the government right now. Here is a small summary of what the main help might be available for your cafe or restaurant during the crisis. You can use this as a checklist if you haven’t already applied.

A. Talk to your landlord. On the 7th of April, the Prime minister announced ways that tenants can get rental relief. Most cafes and restaurant tenants will fit into this category and it’s time to chat with your landlord to help in this time. Link to more information on this. https://www.abc.net.au/news/2020-04-07/scott-morrison-commercial-tenants-coronavirus-measures/12129178

B. 100% Cashback on PAYG Withholding, up to $100,000 with a minimum of $20, 000. 

Business entities with annual aggregated turnover of less than $50 million that withhold tax to the ATO on their employees’ salary and wages will receive a payment equal to 100% of the amount withheld, up to a maximum payment of $100,000.

Eligible businesses that pay salary and wages will receive a minimum payment of $20,000, even if they are not required to withhold tax.

The ATO will deliver the payment as a credit to the business upon lodgement of their activity statements. Where this places the business in a refund position, the ATO will deliver the refund within 14 days. The payment will be a tax-free refund or credit.

The payment will be tax-free and delivered by the ATO as a credit in your Business Activity Statement (BAS) from 28 April 2020

c. JobKeeper Payments to business (has just been passed in Parliament)

Prime Minister Scott Morrison has announced a third and the largest coronavirus support package – a $130 billion economic stimulus package. In this package, businesses will receive a fortnightly wage subsidy up to $1,500 per employee.

The so-called JobKeeper payment is designed to keep people in work and the Government expects up to 6 million people will access a $1,500 fortnightly wage subsidy.

Under the JobKeeper Payment, businesses impacted by the Coronavirus will be able to access a subsidy from the Government to continue paying their employees. Affected employers will be able to claim a fortnightly payment of $1,500 per eligible employee from 30 March 2020, for a maximum period of 6 months. It does have limitations on which employees it applies to and if your business fits the criteria. This article has more details https://www.theguardian.com/australia-news/2020/apr/06/jobkeeper-payment-am-i-eligible-for-the-wage-subsidy-employers-employees-work-casual-how-do-i-register-ato-jobseeker-supplement-support-package-eligibility

Also the ATO Link to apply here.

https://www.ato.gov.au/general/jobkeeper-payment/employers/enrol-and-apply-for-the-jobkeeper-payment/#Whatitmeansforyouremployees

https://www.ato.gov.au/General/JobKeeper-Payment/In-detail/JobKeeper—timeline-of-content-updates/

D. For NSW Businesses. NSW Governments $10k grant for small business. Most cafes and restaurants in NSW will be able to fit into this category.

Small Businesses from 03 April 2020 receive grants of up to $10,000 under a new assistance scheme.

To be eligible, businesses will need to:

  1. Have between 1-19 employees and a turnover of more than $75,000;

  2. A payroll below the NSW Government 2019-20 payroll tax threshold of $900,000;

  3. Have an Australian Business Number as at 1 March 2020, be based in NSW and employ staff as at 1 March 2020;

  4. Be highly impacted by the Public Health (COVID-19 Restrictions on Gathering and Movement) Order 2020 issued on 30 March 2020;

  5. Use the funding for unavoidable business costs such as utilities, overheads, legal costs and financial advice;

  6. Provide appropriate documentation upon application.

Applications for a small business grant of up to $10,000 will be available through Service NSW within a fortnight and remain open until 1 June 2020.

Link to details and to apply below

https://www.service.nsw.gov.au/transaction/apply-small-business-covid-19-support-grant

E. Check the changes to the next upcoming BAS with your accountant to ease cashflow and get refunds quicker. Here are the several changes below.

F. Deferring by up to 4 months the payment date of amounts due through the business activity statement (including PAYG instalments), income tax assessments, fringe benefits tax assessments and excise duty.

G. Allowing businesses on a quarterly reporting cycle to opt into monthly GST reporting in order to get faster access to GST refunds they may be entitled to.

H. Allowing businesses to vary Pay As You Go (PAYG) instalment amounts to zero for the March 2020 quarter. Businesses that vary their PAYG instalment to zero can also claim a refund for any instalments made for the September 2019 and December 2019 quarters.

I. For Sydney businesses. The City of Sydney small business grant for COVID relief. ( Submissions must be made by 27th April ) This is a lesser known grant for up to $10,000 that would apply for establishments in the city of Sydney region.

https://www.cityofsydney.nsw.gov.au/community/grants-and-sponsorships/business-grants/small-business-grants

J: IF YOU NEED EMERGENCY ACCESS TO FUNDING RIGHT NOW, YOU CAN APPLY FOR AN EMERGENCY LOAN FROM YOUR BANK.

Australia’s major banks will start offering $250,000 loans to small and medium-sized businesses, where no repayments will be required for six months. The unsecured loans are 50 per cent guaranteed by the Federal Government and no interest will be charged unless the money is actually used. Banks are rolling out special loans to help keep businesses afloat until reaching “the other side” of the crisis.

Here is the link to the ANZ loan option.

https://www.anz.com.au/business/covid-19/#loans

Hopefully, this guide will give cafe and restaurant owners some tips on getting through this period to the other side, when the world starts to returns to normality.  There are already positive signs from the Government that some restrictions could be lifted as soon as a few weeks time and we will keep you updated on this site on the best ways to adapt to the changes as they go.

Stay safe and good luck from the CPM Team!