During this year, I’ve had numerous conversations with more than 75+ restaurant & hospitality owners & executives, ranging from all concepts and sizes. It’s been a privilege to have such deep, connected, frank and fascinating conversations given these unprecedented times. So I’d like to unveil some of the key takeaways and nuggets of insight I gathered. My hope is this will help you going into 2021.
1) New income streams & acquisitions: Many of RZ’s clients reported adjusting their businesses to these changing times. The adjustments included but were not limited to:
- Focusing on online sales & website sales. They invested more resources and time in their online and website presence. In addition, they adjusted their menus for more takeout and delivery friendly options.
- Several small & mid sized groups created drive-thrus and built drive-thrus for their businesses.
- Added new products, services to adapt to a completely new environment. We have several clients who have been focusing on ghost-kitchens or who are shifting/opening new takeout/delivery businesses (with little to no-sit down components).
- Several of our mid-sized and large sized owners have been holding cash. Many are still holding cash, expecting further downturns. However, many have been investigating & closing on fantastic acquisition deals this year. Prices on restaurant franchises, hotels, property and hospitality businesses across the board have decreased in valuation, making them appealing to buyers with a long-term horizon (3-5 years+).
2) Cost Savings & Deals: Right now some of the best deals are available in the marketplace and this can be a time for you to approach all your vendors for better pricing and or payment flexibility (payment plans, longer payment terms, etc.). Many of our clients have had opportunities to renegotiate, purchase and secure the following:
- Lower interest rates on loans and close on cheaper financing.
- Commercial kitchen space for better prices (many reported 25-150% lower than in 2019). Also, moving corporate staff to remote/home offices has saved on overhead and resources.
- Cheaper Acquisitions – franchises, property, hotels, etc.
- Talent pool opportunities – with the surge in supply of talent & volatility, clients have more access to excellent talent, in many cases at lower salary ranges. Consider Jack Welch’s advice, “Business is a game, and as with all games, the team that puts the best people on the field and gets them playing together wins. It’s that simple.”
- Renegotiating service agreements with vendors for more favorable rates.
3) Strong focus on service & safety (more than ever!!): With all the stress, chaos and anxiety around the virus and financial tough times, people are more than ever either in fight or flight mode. And one thing to combat this and help your business is emphasizing service. During these times, leaders have to be even more empathetic towards their staff and customers. And there has been a newfound focus on what “quality service” means for your customers. Along with service, many conversations, actions and safeguards have been put in place to prioritize customer & staff safety. Authentic relationships with our customers, supporting our team members, and finding time and connection with our friends and loved ones is paramount. It’s been a hard year for so many of us, but we will come out the other side stronger and better.
Overall, I’ve seen three groups of clients: The failing/struggling business, the frozen/stagnant business, and the opportunistic/thriving one. And we all have a choice on how we want our business to be in 2021. Famously, Jeff Bezos (whose business has thrived in all sorts of economic times) says that it is better to take decisive calculated risks than to stay frozen and wait for your business to be put out of businesses by those who are taking risks. Bezos has had many failures from his risks, but also has developed billion dollar income streams from taking these risks and learned many lessons from his failures. In my opinion, if you can take this approach you can do better. Fortunately, our own business has adjusted for the better and if you don’t know how to make that change, contact me and I’d be happy to help you the best I can.
In 2021, there will be no shortage of opinions related to what is to come, a continuation of different perspectives from experts/media. But the biggest obstacle going forward is fear of the unknown. The only thing I am 100% sure about is that despite the range of perspectives on the hospitality industry, health outcomes, economic conditions, job market, etc. no one truly knows what is in store. I challenge all of us to respond by being the kind of person we want in our lives when we face adversity. Consider choosing empathy over judgement. Optimism over pessimism and choose giving over taking. Times of adversity shape who you will become but also exposes who you are now.
I am grateful to be able to serve the restaurant & hospitality industry – the industry that was hardest hit by the 2020 COVID pandemic. You are the most resilient group of people I have ever known. I’m writing this to all our clients & our employees, but you are welcome to share it with anyone you know as well as your teams. Here is to a successful 2021!
With immense gratitude —
Matthew W. Rodgers
1415 total views, 6 today