COVID-19 – Financial assistance – a break down of what’s available

COVID-19 – Financial assistance – a break down of what’s available

Cafes and Restaurants are facing one of the most challenging and dynamic periods in history, Government trading restrictions and social distancing have changed the face of the industry.

Some who have adapted with Apps, takeaway service, selling hampers and alternative products have seen equal or increasing trade with lower staffing overheads. The recent adaption by McDonalds to sell pantry staples is an example of one multinational, incredibly strong business adapting to the market, finding a way to get more people coming through the door/drive through.

The resultant stimulus packages from CoronaVirus has identified, unreservedly and unashamedly that following the taxation rules results in Government assistance, whereas those who have followed the Hospo way of always doing things are finding it difficult to stay open. I apologise if this offends some but it’s the truth, the Governments packages of assistance in the majority assists businesses that do the right thing, pay wages at the award or above, no cash paid to employees (all on the books), investing in staff, declaring all your income (so you can prove declines in trade) all fly in the face of the traditional Hospo culture.

The honesty of the situation now is, deal with what you have in front of you, negotiate with your landlord, know your limits and be prepared to make the hard decisions.

What to do

Watch your wages as a percentage of your sales

If you bank $1000 for the day then your wages should be $250 to $300 inc tax and super.

Watch your Cost of Sales

As a benchmark always aim for 40% (sell a plate for $20 then it should cost you $8 in stock to produce).

Budget

Work out what you are going to receive in stimulus, estimate what you are going to sell (then take off a quarter) and then work out what you can spend.

DRAW A LINE

Pride, Love, Dedication, give yourself the reality check, pouring more time and money into the business when it’s not working is not a strategy. Draw your line in your bank account, don’t pour the redraw into the business, or borrow from Super or Mum and Dad. Know your limit and realise the reality that the situation (when it drops below the line) is done. Close the doors and work on a plan to re-open them.

Be dynamic

We all know the definition of insanity is doing the same thing over and over, expecting a different result, CHANGE, adapt, move, be creative, change your menu, there is no such thing as a necessary evil. Change your menu, adapt your menu, make hard calls because ultimately if you don’t all the staff, their families, your customers, your family, landlords, accountants, suppliers and all the other stakeholders will lose out. The reality that you are a part of a massive machine and so much relies on you is daunting, but also incredibly empowering, make the hard calls and adapt so you take care of yourself and all those who rely on you.

For a comprehensive list on Government and financial help download the table here

Article by Sprague & Associates

by Michael Sprague