• Rodolitz

4 Strategies To Preserve Cash-Flow While Operating Under Limited Capacity

Operating restaurants right now has never been harder. Preserving cash is essential to keep your business afloat and to be able to continue to handle the crosswinds of COVID. Unfortunately, it looks like COVID will remain around for some time, hence, it’s critical to make strategic and smart monetary decisions.


1- Do not be first. Local government continues to change their mind on reopening phases, indoor versus outdoor seating, etc. If you move too quickly, you may have exposure to the continued flip-flopping of government rules. Let each new rule/regulation play out a bit before you have to unwind your moves, which can cost you double in the end.

2- Outsource when possible. Unfortunately, full-time employees come with payroll, benefits, and taxes. If you’re able to find ways to receive similar services and products without employing these people in-house, it may make sense to outsource that service/need. Being lean is a huge advantage today during all of this uncertainty.


3- Restructure your lease. Outside of payroll, operators' largest expense is usually rent/occupancy. Present the current operating difficulties to your landlord and share a few alternative rent structures you’d like them to consider. Be fair and honest and strive for mutually beneficial outcomes. Express your interest to be there for the long-term and the reality that if current concessions aren’t made quickly, that the business will fail in the short-term.


4- Skeleton staffing levels and smaller menus. Employees need to wear multiple hats since revenues are much lower which makes hitting payroll very challenging due to fixed manager salaries. You need to find the threshold of the least amount of people to reasonably operate your store(s). Similarly, you can’t afford to waste products or sit on inventory. Shrink your menu to the 15 greatest hits. Consumer expectations are currently high when it comes to safety & cleanliness and lower when it comes to the product offering. Now’s the time to streamline menus and go back to the basics. The days of 35 menu items are gone for the foreseeable future.

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