HOW RESTAURANTS CAN RESPOND TO THE CHALLENGES POSED BY COVID-19?

Coronavirus pandemic has impacted millions of people around the world. The virus has also affected lakhs of people in India, leading to several lockdowns to curtail the transmission of the virus.

These lockdowns have severely affected various sectors throughout India, chief among these being the restaurant industry. If the coronavirus pandemic lasts for a long period, people may get habituated with the idea of not dining out, which will inevitably take the industry longer to recover.

In India, the restaurant industry has faced numerous challenges because of the COVID-19 outbreak: the end of group dining at restaurants, protecting the health of both the employees and the customers, following the safety regulations laid down by the Government, working with a limited number of workers, running expenditure without revenues to match, etc.

Restaurants can address these challenges by actioning the following:

  • Focus on takeaways: Group dining has become a thing of the past due to the coronavirus pandemic. In this situation, focusing on building the business via takeaways would be a wise decision. This would promote social distancing and would prevent the virus from spreading while ensuring operations are sustained.
  • Collaboration: Restaurants can collaborate to benefit from each other’s strengths. This would not only reduce cost but also increase the number of customers (combining the customers of both the restaurants). The merged restaurant can prepare their best dishes (for which they are famous) and focus their efforts on selling these (which would also result in zero wastage). Collaboration would also help in merging the workforce and have more people available for extensive cleaning and door-to-door delivery.
  • Social media marketing: With the onset of COVID-19, traditional marketing wouldn’t prove to be fruitful. On the contrary, it will be expensive. Owing to the lockdowns, people are getting time to surf on social media. Thus, social media marketing would catch their attention. Restaurants will also be able to connect directly with their customers to build effective customer relationships.
  • Opt for online food ordering: Since people cannot go to restaurants, the only way for these businesses to operate would be through food delivery. They can list themselves on Swiggy, Zomato or other food delivery aggregators to increase sales. They can even opt for food orders placed directly through phone calls. This would reduce costs and create a revenue stream.
  • Create a social awareness program: The restaurants can create a social awareness program around frontline healthcare workers of COVID-19 by supplying them food. Apart from the element of social service, this can also be marketed or advertised on social media and other digital platforms to create goodwill amongst customers.
  • Follow the norms laid down by WHO on hygiene: There are operational challenges in the wake of the pandemic. To overcome those, restaurants should maintain hygiene by extensively using hand sanitizers. They should bear in mind that food safety should be their priority. The working stations should be wiped down at regular intervals using a bleach solution. The executives and valets should be cautious during food delivery and opt for contactless payments.

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5 Ways SLACK Can Help Your Organisation

There are several tools in the market that people could use to communicate, such as Email, Skype, Whatsapp, Messenger, HipChat, Slack, etc. How do you pick the right communication tool for your organization? And does it even matter which one you choose? One tool which is considered as the latest and greatest among tech startups is Slack: a chat tool designed for companies. We decided to give Slack a shot, and started using it late last year at Capital Float.

There isn’t one clear solution to choosing a chat engine for office communication, but we recommend companies give their communication channels some serious thought. Slack has features which make it distinctive from other popular tools like Skype and Whatsapp – we won’t go into that here, but do read up for more context. We’ve definitely witnessed a positive impact from using Slack.

Here are a few things a great chat tool like Slack can help you do:

1) Get things done faster

Chat enables real-time communication, and hence collaboration. Discussions can happen in real-time, rather than asynchronously over email threads. Scheduling meeting times becomes much simpler. Email communication reduces, freeing up productive time. Slack fits better into workflows: the mobile app enables people to respond on the go and great keyboard shortcuts on desktop app enable rapid usage. This leads to quicker action being taken resulting in faster decision-making.

2) Organize your information

Conversations on Slack become an archive of internal information. You can create a different “channel” for each group or topical discussion. Channels help keep discussions focused. Slack’s search feature makes it easy to find data across the medium, either by channel or by person. Files shared are compiled into a list. You can ‘star’ things for later and you can pin messages in conversations.

3) Enable people to focus on the right things at the right time

Having a separate company chat tool enables people to keep work and personal communication separate. Work related messages won’t get lost, and people will be less tempted to start replying to personal communication. On the flip side, people can choose when it’s important to tune in or out. Notifications can be customized by channel on Slack and also by time of day. People can schedule notifications to turn off in the evenings, but be notified on an urgent basis if needed. Essentially, people can focus on what they’re doing while at work, but also be engaged and plugged-in when they are with family and friends.

4) Have more control over user access

It is important to keep control of who can access company data – even conversations. You can create private channels which limited users can see, and also control what specific users can access (e.g. a consultant could be made a restricted user). With Slack, you can enable Google App login or other single sign-on (SSO) mechanisms, which has a couple of benefits. Firstly, people can add themselves without creating new accounts, and no one has to ‘add’ contacts. Secondly, it ensures your chat user list is synced to your user management. When someone leaves your company you just have to remove them in one place to ensure they no longer have access to company info.

5) Innovate, connect dots in your business, and have fun

Being a cutting-edge tech company, Slack constantly innovates and also enables innovation. Slack has integrated with many applications, enabling you to play around with a myriad of other tools your business may use. Do you use Zendesk? You could create a channel which gets notifications when a ticket is created. How about Google Hangouts? You could spin up a new Hangout link for a channel. Slack also provides API access which can allow you to create workflows even with your internal systems. Slack’s funky interface and other cool in-built features can prove useful (e.g. a bot that can remind you of stuff) or simply give you inspiration.

While we’re excited about Slack, we realize it isn’t a perfect solution. A few things to keep in mind: Slack may not quite work as well for companies with primarily external-facing communication, since it’s built for intra company conversations. Even if Slack does work for your organization, there are still kinks in the machinery with pertinent features missing from the module. Video/ voice calling can be initiated from Slack (e.g. you can create links for Google Hangouts), but this feature isn’t built into the system. And while Slack has a high uptime and reliable message delivery, for companies in India, Slack isn’t quite optimized for our existing infrastructure. When used over a flaky network, Slack can perform inconsistently while Whatsapp functions adequately.

If you do decide to go down the path of trying something like Slack out for your company (which you should!), be prepared to work initially on getting people to use it. Here are a few tactical ideas to help you get your colleagues on board: have a few champions for the product. Go for grassroots growth, not taking a top-down approach. Create shameless plugs via email with simple instructions. Create channels which people really need to be a part of, otherwise they’re missing out. Be patient, and be positive! You’ll soon see desired results!

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Sakshi leads the investor facing product at Capital Float. Before that, she did product at KPCB backed Turo, a p2p car rental marketplace in SF. Her experience is in a mix of tech, design thinking, and strategy. She enjoys building delightful solutions to problems in traditional industries. At Stanford, she built her core foundation in CS, design, and economics. Beyond building products, she tries to sing and simultaneously play the piano, runs in Cubbon Park, and rolls out fresh pasta.

Sakshi is the Senior Product Manager at Capital Float.

Oct 24, 2018

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RBI Governor Talks SME, Receivables Finance

Since his appointment last year, Raghuram Rajan has been making the headlines for all the right reasons. But beyond his interventions in currency markets and the macroeconomy, a steady stream of pronouncements from the RBI Governor on potential priority sector reforms should give the SME sector in India much to cheer about.

In his inaugural address, Rajan specifically highlighted the importance of SME finance in spurring growth across the broader economy:

As the central bank of a developing country, we have additional tools to generate growth – we can accelerate financial development and inclusion. Rural areas, especially our villages, as well as small and medium industries across the country, have been important engines of growth even as large company growth has slowed

He went on to endorse receivables financing as a key policy tool to unlock timely credit to SMEs and address the massive working capital gap in the sector today:

For small and medium firms, we intend to facilitate Electronic Bill Factoring Exchanges, whereby MSME bills against large companies can be accepted electronically and auctioned so that MSMEs are paid promptly. This was a proposal in the report of my Committee on Financial Sector reforms in 2008, and I intend to see it carried out.

On a cautionary note, it is worth noting that this is not the first formal RBI pronouncement in recent times advocating factoring or receivables-based financing as a financial inclusion tool for the SME sector. In fact, the RBI has signaled a steady commitment in recent times to SME credit growth, but its policy directives have frequently not translated into real priorities for public and private sector banks operating on the ground.

In 2013, IFMR reported that 16 out of 26 public sector banks had failed to meet their priority-sector lending (PSL) targets. Half the private sector banks also did not reach their targets, bringing the total shortfall in priority-sector lending in 2013 to USD 28 billion.

Despite these hiccups, Mr. Rajan’s strong words and visible proactivity since coming into office suggest that the RBI may embarking on a fresh chapter of promoting innovation to further financial inclusion for priority sectors. If recent sentiment across capital markets is any indication to go by, the consensus is that this Governor means business. This is good news for innovators trying to bring new and disruptive business models to sectors that have traditionally been starved for credit. But for entrepreneurs in these sectors, it could mean something more transformative – unprecedented access to an entirely new set of institutions, tools, and financial products more finely attuned to serving their business requirements and financing needs.

(Image credit: Business Today Aug 12, 2013)

Oct 24, 2018

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5 Things to Know About Short Term Business Loans

If you are planning to embark on a new venture or are already running an enterprise, knowing all about short-term loans will serve you well.

Money plays a crucial role in your entrepreneurial journey, determining the size and scope of your business. After all, when you are brimming with ideas to cater to a market need, the last thing you want on your hands is a financial concern that could result in a compromised business opportunity.

Fortunately every problem has a solution and financial solutions for businesses come in many forms.

Reach out to experts

Should you require commercial finance, a short-term business loan could prove to be immensely useful. Wondering what exactly short-term loans are? You could ask friends who have applied for one, or approach specialized financial companies like us. You would be better placed to know more about short term business loans before applying for one. This is particularly useful if you are venturing into business for the first time as a small entrepreneur.

What is a short-term loan?

The simplest way to understand the concept of a short-term loan is to think of it as a business loan that provides immediate working capital to your company. You are given a lump sum amount that you have to repay within a period of one year, or up to five years at most. This is in contrast to other loans which can be repaid over a longer term.

Financial experts say that a short term business loans hold the potential of making or breaking your company. As per a study, conducted by the National Small Business Association, 19% of small business owners cite lack of available capital as the major challenge in their growth, and 82% of businesses fail due to improper management of cash flow.

Given its importance to small businesses, let’s take a quick look at the implications of a short-term business loan.

Factors to keep in mind

Short-term loans are easier to obtain as compared to long-term loans. You can avail of them in the alternative finance market through online lenders, and thus you can completely bypass the slow and cumbersome conventional lenders like banks. These loans are less tedious to get as they have a shorter list of qualifications and lesser paperwork. But you also need to repay them faster, usually within a year. If you manage to raise your profitability in the short term, this can be comfortably achieved.

However, there are certain points that you need to keep in mind while applying for a short-term loan. The interest rates of short-term loans are relatively higher in the commercial finance segment. Thus, it’s advisable for you to go through and understand the total cost of the loan before applying for it. Short-term loans often demand frequent payments from you. In case you don’t have regular/stable cash flow, you may find it difficult to repay your loan with weekly payments.

To help you further, here are five things you should know before applying for a short-term loan.

  1. Be clear about the purpose: Having a clear purpose is the pre-requisite for exploring a short-term business loan. It’s of utmost importance to be crystal clear as to the purpose of the loan—to hire new talent, expand your supplier network, invest in technology etc. If the purpose is not clear, the loan amount could well be frittered away on incidental expenses that can hold back the progress of young companies. Analyze in detail if the short-term loan is going to work for you in your current situation.
  2. Have an operational plan: Have a clear business strategy in place before securing a loan from a financier. It’s crucial to have a strategy that optimizes your resources. Without a proper business plan/strategy, it’s likely that you are going to find yourself in a debt-trap.
  3. Research interest rates and overall cost: Interest rates are an important part of any loan. It’s a smart move to know the interest rates on your dream loan early on, along with the other charges/fees that your lender may levy. A fee would not cause an increase in your interest rate, but it will be a part of your monthly payments.
  4. Calculate risks: As a wise entrepreneur, it is crucial that you carefully weigh all the possible risks before arriving at any decision. Analyze and ask yourself questions like: Will this loan help me in reaping the benefits? Will it generate regular cash flow? Will I be able to repay my loan in regular weekly or monthly payments?
  5. Know your loan duration: Apart from calculating all the risks, and having the strategy in place, it is important to know the duration of your loan and to choose the repayment tenure wisely. You can choose a slightly extended period, keeping risks and emergencies in mind, instead of choosing a short tenure.

Take a leap of faith

We understand that the journey of any venture, especially of a small business, is not an easy one. It takes a lot to take your business to a certain level and when issues like finances become a hindrance, one is likely to lose hope. But remember, today’s new age financial solutions offer a timely respite. Yet, you need to have an analytical and calculative mind, which can understand the pros and cons of the loan in order to leverage it fully.

If you are still in a dilemma, wondering how to get loan for your business or are unable to decide if a short-term business loan suits you or not, we, at Capital Float would be more than happy to assist you.

Oct 24, 2018