How Restaurants Can Survive Serious Business Disruption

Trends 9 minute read 5th October 2020

Things go wrong in the hospitality industry. If you’re opening a restaurant business in this sector, it’s unfortunately a given that you’ll experience some tough times.

The good news is that the restaurant industry is surprisingly resilient. It has survived recessions, natural disasters and relentless industry disruption.

However, these words will feel rather hollow if your restaurant business is currently experiencing serious challenges. A bit like an illness, it might feel like the business is never going to get better and recover.

But, it will - providing you follow this simple but effective guide to surviving serious business disruption.

Seek financial help early, if needed

restaurant financial help

If your restaurant has serious money troubles, it’s important you act quickly.

You can usually define ‘money troubles’ as follows:

  • you can’t afford to pay your creditors or tax obligations;
  • you can’t afford to pay staff; or
  • you don’t have adequate cash reserves to see the business through the next few weeks or months.

If any of the above statements apply to your restaurant, you need to seek professional advice as early as possible. Start with your bank manager, but keep an eye on government help, too, which might be available if the issues you are facing relate to a national crisis.

Perform a reality check on your business (and yourself)

restaurant reality check

Business crises are opportunities to perform reality checks and reflect on both yourself as a restaurant owner and the restaurant itself.

Grab some time to yourself and ask yourself these questions:

  • Are you happy as a restaurant owner?
  • If the answer to the above was “no”, write down three reasons why you’re unhappy.
  • If the answer to the above was “yes”, write down why (this is a cathartic experience and reminds you why you’re in the industry).
  • Do you enjoy being your own boss?
  • Did you have enough cash in the bank before this crisis?
  • If you had the chance to start the business again, tomorrow, what would you do differently?
  • Are you making a comfortable living?
  • Are your staff happy?
  • When was the last time you looked at the original business plan?

Answers in hand, retreat into business planning mode. Make changes; revisit the business plan; speak to your team.

The decisions and changes you make now will define how successful your business will be once it emerges from its current troubles.

Read these blog posts

restaurant industry blogs

We’ve covered a raft of topics on this blog that are designed to help restaurateurs build profitable businesses.

If you have extra time on your hands or need an injection of inspiration, check out some of our most popular blog posts:

Resource: How to Identify Needless Costs in Your Hospitality Business

Resource: How to Select a Theme for Your Restaurant

Resource: The Psychology of Loyalty Programs and Why They Work

Talk to your suppliers

restaurant supplier relations

Restaurants can’t survive without the best supplier relationships, and you’ll need friends like that more than ever if things aren’t going to plan.

Now is the time to talk to your key suppliers. Find out what they can do to help in terms of deliveries, pricing and the ability for you to get supplies if they’re limited or delivery is restricted.

If nothing else, just keep the line of communication going. Your suppliers should be a great source of support at a time like this.

Make a list of every potential impact on your business

restaurant business impacts

This isn’t a particularly palatable task, but you need to be one step ahead of any potential impacts on your business.

With that in mind, take a moment to list the potential areas that might be affected by the current situation. You may need to speak to your staff, suppliers and customers to get to the bottom of it all, but it’s time well spent.

  • Sales: The big one. How will the challenges you’re currently experiencing impact your sales figures? If you physically can’t let people into the restaurant, what does that mean for the next few weeks?
  • Customers: How will these troubles affect customers?
  • Staff: How will morale be affected? Is there a more serious question about your ability to retain people?
  • Finance: How’s cash flow looking? How much longer can it sustain and ensure you meet your obligations?

Once you’ve outlined the above, you can start to work positively on solutions. For sales what can you do to plug the gap? When it comes to customers, how can you ensure they know you’re still in business? What can you do to rally staff? Is a cash injection needed to sustain the business?

For every challenge, create an answer.

Create a contingency plan

restaurant contingency plan

Ideally, you’ll never want to enter a period like this again, but it’s important to be prepared and learn from the situation you’re going through.

This is the perfect time to create a contingency plan. At the time of writing, the coronavirus has severely impacted the restaurant sector, yet many governments and industry bodies are offering brilliant guides for contingency planning.

Take this example from the CPS in Australia, which could be a useful template for your own business (and not just during a pandemic):


Summing up

Your restaurant is capable of emerging stronger than ever before from any crisis. Just use any additional time you have available to work systematically through the advice above.

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