Running a business has always involved juggling financial priorities. During these challenging times, having a specialists restaurant accountant can make all the difference. Most expenses are meant to enable a corresponding return. Business owners hope that the profits not only outstrip the costs but justify them.
As restaurants and bars seek to reopen during the COVID-19 pandemic, it’s difficult to weight the cost of reopening against the benefit. Operational costs are not going down even as adhering to new recommendations for restaurant and bar layouts to maintain social distancing removes necessary covers.
Businesses are being given the excruciating task of being asked to remain solvent while doing less business for the public good. It’s possible, but these new challenges aren’t a simple matter to address and likely will go through iterative changes.
For business owners and customers alike, this is a difficult time that needs to be met with caution and forward-thinking. The following offers an overview of the situations and some solutions.
The Shortcomings of Restaurant and Bar Layouts
The biggest step in reopening is finding a way to reduce the spread of the SARS-CoV-2 virus by maintaining social distancing.
This flies in the face of decades of restaurant know-how. The prevailing trends have been about how to decorate and utilize space effectively. Emphasis was placed on how to make a small space feel big and big spaces feel intimate.
The hostility industry succeeds when it can move a high volume of patrons through an establishment at pace. Now, with the space between tables, chairs, and waiting areas needing to meet the minimum two metres as set out by social distancing recommendations those ideas are all out the door.
Even the speed with which patrons enter and exist needs to be reconsidered to avoid them passing each other.
Removing furniture requires storage that many establishments simply don’t have. Cutting down the number of concurrent customers slashes into profit margins. At the same time, not attempting to get some bodies in the door means a rapid bleed-out from recurring costs.
Multiples steps need to be taken to ensure the safe distancing of staff and customers. ON top of that, it’s important that the restaurant and bar environments avoid unnecessary risks of contaminant and spread.
This includes recommitting to sanitation standards for surfaces and all work areas. Different surfaces keep the virus viable for differing amounts of time. Surfaces are still less of a problem, overall, than person to person transmission.
Taking precautionary steps in the delivery of orders to establishments, aiming towards expanded takeaway options, and limiting menu choices all overhead costs.
Cost reducing measures are key to success. For each projection of profit loss, a restaurant or bar needs to look at how to remove those expenses. One places often chosen early in cost-cutting is labour.
This is not recommended for multiple reasons. One is the need to keep trained staff on-hand to cover unexpected absences from illness. Another is the public outcry against establishments surviving in a remove the nose to spite the face fashion.
Reducing the costs in the kitchen by limiting menu items to a core selection work better. Not only does this remove costs from ordering and storage, but it also works better with current mentalities.
Patrons venturing out of the home to eat and socialize are heading out with specific desires in mind. The game isn’t to entice with a wide net but to grab a few loyal customers and deliver a satisfying, and safe, experience.
State of the Industry
Tentative reopenings are planned for 4 July. This gives only so much time for businesses to arrange themselves. The first few weeks will be crucial. A spike in cases means more than a loss of trust by the public, it means another round of closures and even longer road between now and return to normalcy.
Limiting business hours and offering more takeaway options on limited menus have been helpful so far. These measures keep revenue trickling in for some bars and restaurants. Even tentative openings will increase those dividends and aide businesses rapidly losing funds.
Unfortunately, for those in dire troubles, a slow return to normal is uncomfortable and untenable.
For the foreseeable future, food dividers and maks worn by servers are necessary. Expect shorter hours to continue forward to prevent lingering bodies from increasing risks.
Recommendations coming from the government are hazy. While many are gearing up for indoor reopenings, guidelines may only suggest outdoor patios and gardens.
A study of a large outbreak in China has been widely reported on in media and scientific literature. The cause was inadequate ventilation in a congested indoor area. Normal restaurants have powerful ventilation in the kitchen areas, but rarely in the dining areas.
With summer here, opening windows and doors to increase airflow will be difficult.
Supplies of both PPE and sanitation products is another issue. With an increased demand for both, it’s imperative that a restaurant have adequate stock. Any lapse in policy and use will create significant risk.
Even as the hospitality industry gets moving, those in charge need to stay focused on the bottom line.
Many of the projections used for ordering supplies and food products rely on expectations of sales. Pricing of rubbish removal, laundry, and other necessities is also in flux as other businesses deal with a lack of employees and a surplus of work in these sectors.
Updates to spreadsheets and keeping precise tallies of new costs can keep a business from blundering. Tools such as restaurant checklist templates offer a starting point of considerations.
Keeping tight control of financial health allows a business to roll with the waves of changes that have occurred and will continue into the future.
In general, changing over to a new restaurant or bar layout won’t cost much more than time and labour. In some instances, new costs will arise from storage or updates to ventilation systems.
The majority of the work in reopening will be to balance costs and revenue. Contact KG Accountants for assistance in mapping out a financial plan and exploring options.
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Categories: covid19, Restaurant and bars
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