Small business owners have one key weapon they can use to get them through times of change: their ability to pivot. By adapting, diversifying or redirecting operations, owners can pivot their business to meet developing customer needs or to find new markets.
Small business owners can be flexible and fast-moving, whereas the size of a big business can make it cumbersome and slow to shift or adjust. The relative agility of small business gives it a big advantage during unsettled and difficult times.
How the hospitality industry is changing
Just like many in the hospitality industry, restaurant and café owners in Parramatta have experienced uncertainty and changing conditions since the pandemic began impacting lives more than six months ago.
Local business owners should be proud of the way they have used creativity and flair to adapt to new ways of thinking and servicing their customers while they adjust to new business conditions.
Government measures like JobKeeper will continue to make a real difference for a significant portion of the industry for some time. By taking on board the new conditions and learning how to work with what JobKeeper and other government packages have to offer, hospitality businesses can survive and even grow.
The recovery process will continue to require many changes, but the one constant is that businesses able to pivot to take advantage of commercial realities are likely to thrive.
Ways you can pivot your business
Realise Business Advisors have worked successfully with disrupted businesses as part of the Parramatta Light Rail project and we continue to provide professional advisory services to businesses during COVID-19, helping them to pivot and adapt to new and changing conditions.
In human movement, pivoting means keeping at least one foot planted on the ground. The idea of pivoting in business is that you don’t need to step away completely from your core business in order to keep moving. You can keep one foot in while extending the business or turning it in a new direction.
We know there are many opportunities for small businesses in the hospitality industry and here are a few ideas you could consider for changing or adapting your restaurant or café:
Ghost or delivery-only kitchens
A ‘ghost’ kitchen is set up to cook meals only to be delivered to customers and does not offer eat-in dining. Other names for these delivery-only setups include dark, virtual or cloud kitchens. In NSW the State Government has established new rules to make it easier to set up and operate a ghost or delivery-only kitchen.
One of the main benefits of setting up this type of kitchen is that overheads will be lower. Also, as there is no dine-in option you are not impacted by the number of customers you can service due to COVID-19 seating capacity limits.
Once the kitchen has been set up Realise Business Advisors can help you redirect your marketing, including developing a new website and launching social media campaigns to let people know about your service and to allow them to order online and pay online.
A commissary or production kitchen is an established commercial kitchen that can be rented out to other food service owners for them to store and prepare food for their customers. Established kitchen space can also be used to supply wholesale products to other food and beverage businesses. The main benefit of commissary/production kitchens is limited fixed costs for overheads. As the experience of the Ya-Malaysia restaurant’s production of Malaysian sauces has shown, it is possible to transform a restaurant kitchen into a production kitchen that produces in-demand food products. Making a relatively inexpensive pivot to food production harnesses underutilised or unused kitchen space and creates a revenue source that is not dependent on foot traffic to the restaurant.
Landlord/food hall setup
Landlords may consider establishing a food hall that offers other restaurants the chance to supply food to customers. This option would mean greater upfront investment but there are greater chances to recoup costs by drawing a broader range of customers into the space. which may offset expenses. Merchants of Ultimo is a food hall that has been established in Sydney.
Large events (post COVID)
Participating in large events is a good way to attract new customers because it raises awareness of food and beverage businesses. The development of set menus, staffing costs and limited overheads can make one-off events a very profitable option for food and beverage businesses.
Re-establishing the business by offering popular items
One of the most popular, profitable food and beverage options at the moment is shops and cafes selling ‘bubble tea’. The cost to enter this type of business is relatively low and the beverages could be combined with other food offerings. If choosing this option, consider whether or not the product will continue to be popular and if there is competition from established players.
Downsize, re-model or move
The current environment may mean that you need to downsize or remodel your food and beverage business, while keeping the same products and services. The other option may be to relocate your business to a new area where there are more opportunities to develop and grow your new ideas. Realise Business Advisors can help you discover whether this is the right option for you.
COVID-19 has resulted in disruption and change for many industries. Those who work in the hospitality industry are passionate, creative and resilient. Realise Business Advisors can help you make the most of your business experience while pivoting in new directions to capture the opportunities ahead. Book your free advisory session today.