Cafes in the Time of Corona
Updated: Mar 18
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.
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 stop communicating with your customers. It’s important to nurture your relationship by maintaining constant communication through whatever channel is available, be it social media, email, SMS, or what have you. When the crisis is over, you’ll want your customers to remember you.
What we need to understand, though, is the sensitivity of being in a crisis. The first step is to accept that we won’t be able to sell anything during this time, unless our product or service falls under the “essentials” category—people just aren’t in that space right now. Otherwise, we would just be wasting our time or annoying our customers. Neither will be good.
No, this is not the time for sales. This is the time for branding. The kind of brand messaging that your customers need to hear must clearly communicate the value that you can deliver to them in these trying times. If you’re in the cafe business, the value is quite straightforward. People still need to eat and drink. Focus on that.
At Bean & Barley, we decided to use the forced down time to create more valuable content for our audience, starting with this piece. The intent is to deliver timely and relevant content, especially with regard to the crisis, without hidden agenda. This is the kind of value and authenticity we wish to demonstrate to our audience and other companies.
With the lockdown giving us a lot of forced downtime, it’s best we focus our energy on other things. On the personal side of things, we have more time to spend at home with family (with the proper social distancing) or with ourselves, doing things we never had the time to do. These things include hobbies, further learning, self-improvement, and the like. On the business side, now’s the time to sit down and reflect on our business—what could we do to make our business more resilient to crises? What improvements will we put in place? What can we start working on now?
Some hard questions we threw around during our meetings:
Why are we doing this business in the first place?
How do we grow and diversify our revenue sources?
How do we improve our branding in a competitive industry?
What processes should we have in place? Which existing ones should we tighten?
Is it time to work on our digital presence?
Do we go all-in on digital marketing?
Is it a good time to explore e-commerce? How?
Do we apply for online banking and other digital payment options?
Should we work on enforcing our payment terms?
Is it time to call it quits on this business? There should be no shame in quitting.
Related: a lot of businesses have started appreciating the value of technology and marketing. Having a digital presence is something that’s easily pushed aside in favor of more pressing operational concerns prior to the pandemic. We expect this to change very soon.
These are just some of the hard lessons we’ve learned so far dealing with the current Corona virus crisis, and we would like to update this post as we go along. If you have insights or lessons that you would like to share with our community, feel free to send us a message HERE and we’ll include them in our updates.
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