Rapid Recovery Series: Session #3 – What’s Your Post-COVID Profit Model?
This part of an ongoing series of articles covering all 10 sessions of the Rapid Recovery Series. You can find recordings and downloads and resources for all recordings here.
In Session #3: What’s Your Post-COVID Profit Model?, attendees heard from David Hopkins, president of The Fifteen Group. Presented by The Fifteen Group, this session took a look at some of the considerations in the ‘new normal’ landscape and how establishments can work within these new regulations, mandates, or procedures to achieve a positive bottom line.
For operators, these considerations look like:
- 50% Capacity Restrictions
- Sanitization procedures
- Guest caution over dining out
- Catering revenues / buffet revenues
- Supply Chain
- Staff challenges about working
So, knowing that these are challenges along the road ahead for operators, how can they ensure they not just survive but thrive? Here are three key highlights from David’s presentation that speak to how operators can maintain a positive profit statement.
Take advantage of the wage subsidy for reopening
David Hopkins points out that pre-COVID, an average restaurant may earn roughly CA$7,000/month. In a post-COVID model, David estimated that a restaurant would be losing $27/month with a 50% capacity. By taking advantage of the wage subsidy, David shows how a restaurant would lose much less. He notes that this still is not enough though. According to David, restaurants still need 3 – 3.5% sales volume to get to opening day. Ensuring that the wage subsidy is held well into fall is vital.
Consumers are tentative about returning to dining out. David suggests that the market size will be 60 – 70% of what it was before, pre-COVID. As restaurant capacity shrinks, the market size is still larger than the capacity, creating a seller’s market. He notes that this provides the opportunity for restaurants to take advantage of this and raise prices.
Increase value proposition
Increase your value proposition by increasing experience. David spoke to his experience in working with restaurateurs and the importance of offering what he calls a ‘10/10 level’ experience.
This means taking a look at the four pillars of post-COVID restaurant success:
Product, Service, Atmosphere, Safety/Sanitization: is your business offering unparalleled excellence in all of these categories?
David points out that staff will become incredibly important going forward. Your staff need to execute products, deliver quality customer service and atmosphere, and as they’re on the frontlines, they need to be sure that guests are keeping customers safe and healthy.
We encourage readers to not just listen to the full session but reach out to David Hopkins of The Fifteen Group for more information on how they can help relaunch your business right.
Rapid Recovery Series Articles:
Session #1: COVID-19 Impact and Industry Outlook
Session #2: Opening Your Doors to a Safer Future
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