The lockdown may be ending, but the restaurant industry especially the smaller independent restaurants have a long challenging road ahead. With backed up rent, debt and the new limitations on capacity, social distancing and PPE for staff, margins will be even slimmer. These 4 tips may increase your margins at your restaurants and give you a fighting chance.

ADD A COVID-19 SURCHARGE FEE

It’s no secret that your restaurant has been inoperable over the last 2 months. With rising cost of food and PPE requirement for staff, adding a short term fee is not only reasonable but can also make customers feel comfortable knowing that it will be temporary and related to the circumstance. This will also prevent the need to reprint menus, reprogram POS and to familiarize staff with new pricing. The exact amount is up to you but we don’t recommend anything higher than 15% and the fee should be disclosed to guests in advance, best if posted and clearly visible.

TAKE RESERVATION DEPOSITS

Empty tables don’t pay your rent. With even less tables to sit you can’t afford to have a no-show reservation.  The main reason for taking a deposit is to deter customers from cancelling their reservations at the last minute or not showing up at all. This doesn’t have to be standard across all hours of your business but certainly for peak hours and nights including Friday, Saturday and holidays. The deposit should be a per table reservation like $40 for a 2 person to $80 for a 4-person, but the exact amount should be based on the price per person of your respective establishments.

INCREASE TABLE TURN-OVER

You could be slammed when you open but a lackluster turn-over rate could spell disaster for your establishment. Guests will wait substantially longer to sit, servers will be frantic and your restaurant will lose money. Adding in the additional time needed to disinfect each table between guests leaves little room for error. We recommend setting a clear max seating time per table and being upfront with guests at time of reservation. The exact sweet spot and reasonable time for your establishment will vary from others and should be based on table size, but you can’t afford to have a table off the rotation for an unknown amount of time. Kitchens will be operating at 25-50% capacity for some time, it’s reasonable to expect that guests will receive their food in ample time. 

INSTITUTE A BEVERAGE MINIMUM PER GUEST

This is a play out of the comedy club book. Requiring all guests to purchase one beverage with their dine-in meal whether it be an alcoholic beverage like beer, wine or liquor. Soda, bottled water and coffee can also play a crucial role in increasing your margins and survival. We recommend being tasteful with this, thus if at a table of four guests, three of those guests order 4+ drinks but the fourth person didn’t order a drink of any kind that the minimum requirement has been met in spirit.

As uncomfortable and drastic as some of these tips may appear, it’s important to remember that these are drastic times and that the survival of your business relies on your creativity and willingness to do what’s necessary. Some of these may not apply to your establishment and our goal is inspire you to be creative with what your individual establishment may require. The most important thing is to be transparent and upfront with guests with the changes, don’t pull the bait and switch. We are all in this together and we believe guests will respect and embrace these new policies if conveyed in a win-win. The alternative for everyone is the lack of dining experiences and options, which no one wants.

About the Author: Omid Sabet is a managing partner at Five Marketing & Management a San Diego based management and consulting company servicing the nightclub, bar, restaurant and hotel industry. He can be reached at Omid@fivegrp.com

About Five Marketing & Management: Five Group is a San Diego based Marketing and Management company with a keen eye for innovative and unique events. Five Group also provides a variety of consulting and management services to restaurants, bars, and nightclubs to ensure that they reach their full potential by being dynamic, diverse, and ever-changing. In addition, Five Group specializes in experiential festival curation including creations like Horizon Music FestivalBAYKED Festival, Barks & Brews Fest as well as operation and management support of larger festivals like KAABOO San Diego formerly KAABOO Del Mar. Five Group’s vision is to provide unique and elevated experiences to clients and guests that set them apart from the competition.

Furthermore, Five Group is the mother company of four promotional brands: DJhere Productions, TK Productions, Dtown Productions and SFiNX Productions, all of which work closely with San Diego and Las Vegas nightclubs to provide tailored services that meet their needs, from DJ’s and entertainment to digital/print marketing and client access.