Jordan Baker, CEO of Sanity Marketing, reveals key learnings foodservice and hospitality businesses can gain from the crisis
Large scale pandemics are (thankfully) few and far between, but this relative rarity often leaves business owners/operators scrambling when crunch-time comes.
Those in the foodservice and hospitality sectors, plus small independent businesses, are often the hardest hit as they rely on a challenging mix of a) consumers having spending money, b) consumers being willing/able to be out and about, and c) consumers having confidence in the global economy as a whole.
Even once a disaster is over, it takes a long time for things to resume as normal for businesses in the industry, as consumers may not have the ability to spend additional cash on non-essentials after a few months of reduced pay or fully losing their job. That’s not to mention the challenge that business owners/operators face of re-hiring and training staff, plus getting suppliers to fulfil orders quickly enough.
It’s no surprise then that, besides lives, hospitality and foodservice businesses are often some of the largest casualties left in the trail of a global outbreak.
That’s why it’s critical for businesses to pay attention and take lessons from past events in order to future-proof their operations for any manner of disaster.
So, here are five important lessons foodservice and hospitality businesses can learn from the COVID-19 outbreak:
- Don’t cut it too fine – the relationship between profit and cashflow can be hard to identify, but most savvy business owners would agree that the latter is more important. If you’ve had 2-3 days of bad trading, this shouldn’t be enough to completely wipe out your business. Restructure your operations to ensure that you have enough cash coming in to last for a few weeks – at a minimum. You never know how long events will last and how far the ripple effect will carry on.
- Have a plan and be prepared to adjust it – even if it’s just a one-page document with some ideas, make sure you have a plan as to what your business will do in case of a global or even regional downturn in sales. This will help you to think clearly and avoid making any irrational and potentially damaging decisions. That being said, take each and every day as it comes and be prepared to adjust your actions according to how events unfold.
- Be realistic – if every other restaurant, bar, or hotel on your street is shutting down, it’s likely a sign that you should too. Don’t focus on your sense of pride in these situations – instead you should pay attention to what others are saying/doing and don’t be afraid to follow along. The herd mentality generally proves right in this instance, as other business owners may have more knowledge or experience in these types of situations.
- Be open and focus on communication – during a mass downturn in business, it’s going to be tough for absolutely everyone. Don’t fob people off if you can’t afford to pay their invoice or come up with countless excuses as to why you can’t continue working with a supplier. An open line of communication will always ensure you and said supplier/partner are on the same team and can work effectively to come up with a fair solution for both parties. Damaging a relationship with a partner or supplier can also leave you scrambling to make alternative arrangements when it comes time to restart business operations.
- Don’t axe marketing budgets first – with money tight, it’s tempting to cut services you may deem ‘non-essential.’ But in fact, tough times are when you really need to be focusing on marketing. You want to be building brand awareness and woo-ing your market – ready for them to spend when the saga is over. Keep your business in the minds of your consumers through social media, advertising, and remarketing, and they’ll flock to you when things are back to normal.
About the author
Jordan Baker is CEO of Sanity Marketing. Baker is a former journalist (Mail Online, The Gay Times) turned marketing expert, who is a regular on business programming (BBC, BBC Radio, Russia Today) and is frequently featured in a plethora of publications (Evening Standing BBC Working Life, Daily Mail) talking all things small business and marketing.
Sanity Marketing is a growth agency for growing business with a keen focus on boosting sales through marketing. It has worked with the likes of the Crowne Plaza Hotel Chain, Britney Spears, Strictly Come Dancing and the House of Commons, as well as over 650+ small businesses. sanity-marketing.com