Running a business has never been more challenging during the pandemic. Governments and health officials are ordering people to stay indoors, and businesses have to operate in a limited capacity. The economic crisis led countless restaurants to struggle financially, which led them to no choice but to close temporarily or permanently.
While the future of food businesses appears dire and restaurant owners are struggling to find financial support, new restaurants, and food establishments continue to open despite the current crisis. The pandemic has given birth to plenty of restaurants, which no one has ever predicted in a time when countries are ordering dining rooms to close.
In a 2020 Annual Report by Yelp, new openings and reopenings drive economic recovery fueled by business closures and the resilience of many local businesses across the U.S. More businesses are becoming prepared to adapt to new local restrictions and meet the COVID-safe lifestyle. This inspired aspiring entrepreneurs to invest in a food franchise such as a grazing table business for special dining occasions and everyday activities.
While the pandemic has hit many industries hard, this doesn’t mean that it’s game over for aspiring restaurant owners. The current business climate opens many opportunities to start a business for people who know how to plan strategically. For those who want to take a plunge by opening a restaurant amid a pandemic, here’s what you need to know.
Maximize build-out opportunities
While competition is fierce, experts believe that starting a restaurant amid a pandemic offers financial benefits to those looking for real estate space. Despite closures in the food business, we’re seeing more reasonable structures in succeeding months, specifically for leases.
Before the pandemic, rental rates for food establishments in populated areas, such as Chicago and New York, depends on the density of surrounding business areas and residential neighborhoods. The more customers spending money at restaurants, the bigger the rent. But with limited employees and restricted dining capacities, rent structures will adjust to the current reality.
The bear market offers a perfect opportunity to invest, especially among seasoned entrepreneurs willing to take serious risks. Second-generation spaces are widely available without key money involved, something very different from what we have been accustomed to. Today, you’ll find those spaces in desirable locations such as high street retail.
When we talk about “key money,” this refers to the fee paid to the landlord to secure a lease or buy the existing tenant out of the lease. This gives the new tenant a chance to set up a second-generation space, including the equipment, fixtures, and furniture. In the bear market, restaurateurs who close their business will look for people to sign their lease without the key money, providing a financial benefit for the new tenant.
Step up your social responsibility efforts
While opening a new unit is your top priority right now, you have to make your brand known by leveraging social responsibility efforts through charity or donations. In other words, the current climate offers a perfect opportunity to stay visible in the public eye by doing good deeds.
For example, restaurant operators are stepping up their corporate citizenship by visiting local hospitals to distribute meals for front-line workers and healthcare professionals, such as doctors and nurses.
Giving back in consumer markets with a preexisting following will highlight a business’s dedication to helping the community. Charitable initiatives serve as positive reinforcement that encourages people to spread the word about the brand and push loyal customers to transact more frequently. These changes offer a quick boost when you’re just starting out in the food industry.
Rethink your business model
Across markets, restaurants and food businesses have to change directions to thrive during the pandemic. But only a small percentage of restaurants have normal operations in 2020, while the rest of them have to modify their operations completely.
Since the pandemic, many restaurants have redesigned their business models to accommodate pandemic-friendly features, such as outdoor seating, drive-thrus, and curbside pickup. While dining options remain limited, isolation kept people seeking new food experiences. This means offering other delivery options, introductory specials, and meal deals.
Virtual and ghost kitchens are also gaining a significant following. This allowed restaurateurs to remain in the business by eliminating the physical establishment while allowing orders to come in online. This type of dining option allows customers to order from their favorite restaurants through delivery platforms. In turn, this helped restaurant owners reduce the overhead cost of running a food business.
COVID-19 may have hit hard the food business industry, but the crisis has given startups a different degree of flexibility. To stay afloat, new restaurants have to adopt new, creative ways to gain a stronger foothold while operating in limited capacities. People are taking innovation more seriously, which can put them in a strong position in future crises.