Another lockdown? How to save your restaurant from bankruptcy

It’s been over a year since COVID-19 hit the world. COVID-19 is not only a major problem for people but also restaurants and other foodservice businesses. The lockdown has caused many restaurants to close their doors or go into bankruptcy because they can’t cover their costs anymore. Luckily, there are ways you can save your restaurant from any other lockdown, which could lead to bankruptcy. Below are the tips to consider;

1. Take advantage of government programs

If you’re in the United Kingdom, there are government programs to help restaurants that have been affected by the COVID-19 lockdown. For example, the government provides funding to businesses that have been damaged or closed down.
The National Environment Research Council is also running a program for restaurateurs, which they can apply for. There are many other programs if you’re in another country, and it’s always worth talking with your local councillor office to see what help may be available.
Another government program in the UK is the Rural Support Scheme, which provides funding to some rural businesses. Your restaurant can also benefit from the UK governments “Business Support and Development Program,” which can provide advice for businesses looking to grow or diversify.

– Make sure you understand what is needed for these programs and make an appointment with your local councilor office if you require any help.

Once accepted into a government program, it’s important to do everything they tell you so that payments don’t get stopped or delayed because this could also lead to bankruptcy.

2. Renegotiate contracts

Restaurants often have to sign long-term contracts with suppliers and other companies. The lockdown has made these agreements no longer beneficial for the restaurant (or probably even affordable).
That’s why you should talk with your supplier or construction company about renegotiating these agreements, especially any contact that doesn’t come up until after COVID-19 is gone. Asking them if they can change some of the terms may lead to a better situation in the future.

The producer will also be willing to offer more favorable prices because there is no need for their product anymore since not many people want it. It might take time, but try being persistent when negotiating new terms for an agreement, which could save your restaurant from bankruptcy.
Keep in mind that if you’re not able to renegotiate, then it’s likely time for your business to close its doors or go bankrupt because these contracts are too expensive and will only get worse over time.

3. Reduce staff if it’s needed

If there is a lockdown, you should minimise your staff. If you don’t require as much staff anymore, you should first talk with your employees about what can be done so that everyone stays employed (especially considering COVID-19). This could mean using more part-time workers or turning down catering requests even though there may be less work available now due to all of its consequences from COVID- 19.
If you’re unable to find an agreement, one option might be reducing staff by 15%. For example, if you had a staff of 100 people before the pandemic, then reduce it to 85%.

It’s hard because no one wants to give up their job, but this may be necessary in the long run, so employees don’t lose anything while you’re looking for another solution or negotiating with suppliers and other companies.
If your restaurant is struggling financially, there might come a time when letting go of some staff will help keep them afloat. You should only do this once all possible solutions have been exhausted, though, including renegotiating contracts as well as getting an online loan.

4. Get an online loan if you can cover all costs and expenses

Lockdown has made getting loans so challenging, especially for restaurants that are struggling to get by. For some people, this means working another job or finding help from family members, but others will be forced to declare bankruptcy and close their doors permanently.

If you’re able (or willing), one option might be taking out an online loan at Omacl Loans before everything gets worse. Just find a reputable online lender like Little Loans and check what will be your best options.

Conclusion

The restaurant industry is always changing and evolving, and these changes are often hard to keep up with. COVID-19 is just another example of how the industry is changing, but there are also some solutions available for when you’re struggling financially or doing all that’s necessary to try and make it work in a post-COVID-19 world.