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Cafes in the Time of Corona

Updated: Dec 21, 2021


Empty cafe with a rustic feel.

What a week. Actually, it hasn’t even been a week since we started feeling the initial impact of the Corona virus pandemic here in Manila, what with community quarantine and lockdown efforts rapidly raising anxiety levels for individuals and businesses alike. Nobody knows how long this situation will last, but we’re quite sure everyone’s bracing for impact.


Now, we’re not claiming to be the experts in crisis management, but the Corona crisis has us learning a lot of things quickly, and we’d like to share lessons from our customers, our friends, and our own operations, in the hopes of helping your establishment weather the proverbial storm.


Mindset


Call it cheesy, but we believe that having the proper mindset is the first step, and is key to getting the right things done. Let’s talk about perspective—while your business it at risk, the fact that you’re alive and healthy means you have hope, and that you can pull yourself together after the crisis. Now, add a little patience—it will be tough, it will take time, but you’ll eventually get back there.


Got your mind in the right place? Ok, let’s get to work.


Cash is King


It’s true, cash is the lifeblood of a business, for without it, a business dies an abrupt death. It doesn’t matter if you’re profitable—if you don’t have cash right now, you stop operating.


Explore Other Revenue Streams. Prior to the lockdown days, we encouraged our customers to explore products or services that could help curb the sharp decline of dine-in customers—a clear effect of the Corona virus-induced fear. The obvious action point was to push more deliveries and takeaways. This meant either engaging third-party delivery platforms (e.g. Food Panda, Grab Food) or setting up your own delivery infrastructure (if you didn’t have one yet). Pushing sales of gift checks also became a popular option. This, of course, was easier for businesses that had some sort e-commerce or similar digital system.


Stop The Bleeding. Once the lockdown was implemented, most establishments were unable to operate normally. Some still provided deliveries and takeaways on a skeletal operation, while others made the hard decision of closing the business entirely, for the duration of the lockdown. While this definitely doesn’t leave business owners and employees jumping for joy, it is nonetheless the best solution in the spirit of conserving cash. Wise business owners knew when it was time to close shop.


Cash Out. One thing business owners could look at is their accounts receivable, and it’s in their best interest to secure that amount as cash. This can be a challenging and sensitive conversation to have, especially amidst a crisis, but a necessary conversation regardless. What’s important here is to never forget the human aspect of things—in the same way you need cash now, that person or establishment that owes you money is also trying to hold on to as much cash as possible. Conversely, you will want your suppliers to extend you the same courtesy. Negotiate for an arrangement that’s mutually beneficial for both parties—now’s the time to nurture relationships, not burn them.


This scenario is true for Bean & Barley. We knew the chances of collecting from our corporate clients and cafe customers would be a challenge, so we focused our efforts on those with high accounts receivables and high probability of paying. There's also the hurdle of how to get the cash, as most banking establishments are either closed or have limited operations, and meeting up for check handovers isn't the best option (due to social distancing and limited banking operations). We had to look at those who could pay us remotely via bank transfer or similar methods. All this while understanding that our customers may negotiate for favorable terms, something we were prepared to face. Because we intended to have the same conversation with our suppliers as well.


Secure Your Crew


In times of crisis, it’s important to maintain a certain level of morale within your team, without creating delusion. You’ll have to reassure them that everything is and will be ok—from job security to general health and safety. You’ll need to demonstrate that you are prioritizing their welfare. However, you’ll also need to be realistic with them and true to the situation.


At Bean & Barley, we decided we will disburse full salaries to all our employees, despite the month-long lockdown leaving us with no business operations, hence no source of revenue. Because we had to preserve our cash, we made this possible by deciding to forego our own management salaries without hesitation. It was aligned to our company values, and it was the right thing to do. However, we do intend to have a conversation with our team regarding the crisis, the business, and the outlook. Everyone deserves to be in the know.


Engage Your Customers


Stopping operations doesn’t mean you have to sto