21 Jun How Restaurants Can Recover Faster from the Pandemic with a Loan
It has never been easier to quickly secure a business loan for your restaurant and put you back on the path toward growth.
When the world shut down in the spring of 2020, it separated businesses into essential and non-essential. The goal was to reduce gatherings to slow the spread of the virus. Restaurants were the first to close down. Unfortunately, many never reopened.
It will take more than time, a stable economy, and dedicated service to restore balance in the restaurant industry. Until then, many are accessing loans for restaurants through an alternative lender to finance their recovery from an economic crisis.
Restaurants can shorten their recovery time by investing in several ways. For example, the post-pandemic economy requires accelerating the adoption of new technologies to better serve customers, and especially true for the restaurant industry.
Fortunately, it has never been easier to quickly secure a business loan for your restaurant and put you back on the path toward growth.
How the Pandemic Affected the Restaurant Industry
Public health restrictions forced restaurants to close in-door dining or face a fine. In some states, restrictions were in place for several months. More than 110,000 food establishments shut their doors for good as a result of the COVID-19 pandemic.
When restaurants opened again, there were new costs associated with adhering to social distancing and procuring PPE for staff.
Restaurants were left desperately looking for new business opportunities to replace the sales mix that was disrupted by a lack of commuters and tourists. Below are other key ways restaurants have been impacted by the pandemic:
- Sales Mix: More than half of employees plan to stay remote long after the pandemic. At least 70% of employers plan to oblige with some type of hybrid working model. This means fewer commuters returning to the office and shorter lines during the workweek.
- Geographic Disparities: Stay-at-home restrictions and phased reopening was the most prevalent in densely populated areas. Meanwhile, rural communities favored a return to normal that was much faster.
- Digital Evolution: Contactless service expanded during the pandemic. Restaurants that adopted delivery apps were able to recover faster than those that stuck with traditional take-out.
- Value Perception: A lot has changed, including consumer trends. While most consumers expect digital accessibility, they also crave meaningful experiences. When modern consumers visit a restaurant, they expect a certain standard of service based on the price. Brands that target the value perception are being rewarded with customer loyalty.
YoY Restaurant Trends
According to the National Restaurant Association, 2020 saw a 24% drop year over year (YoY) across the board for restaurants. The impact of the pandemic was disjointed. Bars were down -65% YoY, while full-service restaurants were down around -30% YoY.
Despite economic uncertainty, many restaurants continue to find innovative solutions to financial obstacles. App-based delivery services helped some restaurants stay afloat during social distancing measures. These digital-friendly strategies led to unanticipated industry growth between 2020 and 2021.
While many were optimistic, the National Restaurant Association confirmed an 11% growth YoY between 2020 and 2021. While that number is still below pre-pandemic levels, it’s trending in the right direction. What is holding the service industry back from a full rebound is that it seems recovery is uneven.
The Key to Recovery
The restaurant industry explored many ways to generate business and otherwise recover from the pandemic. As we begin to see an unequal recovery distribution emerge, one thing is becoming clear–investments in the right areas are leading to faster recovery and growth.
Here are a few ideas for using a business loan to speed up your restaurant’s recovery in the post-pandemic era.
Adapting Business Models & Updating Operating Procedures
Social media and delivery services are here to stay. Before the pandemic, only a few major brands used app-based ordering and third-party delivery services. Now, it’s the norm. For example, major fast-food chain Taco Bell anticipates that 50% of their post-pandemic order mix will be digital.
Servicing customers with app-based ordering takes big investments in high-tech integrations. For example, Taco Bell had to build an app that could service 7,000+ restaurants. Chick-fil-A is using digital tools to monitor social media and quickly identify potential food safety issues.
These new capabilities require business financing for new hardware, software, and technical talent. That’s why getting up to speed on digital transformation could be the key to your post-pandemic recovery.
Securing a small business loan for your restaurant can help you invest in technology. Build an app to service customers, track social media engagement, or provide other consumer insights to boost sales.
Focus on Customer Loyalty
American consumers in the post-pandemic era are tech-driven and connection-focused. While they generally prefer high-tech, self-service convenience; they also appreciate an authentic connection.
Restaurants that focus on providing an authentic connection to niche groups are faring better in their recovery. Focusing on customer loyalty doesn’t mean only paying attention to your long-standing, repeat customers. It means recognizing that the best restaurants today are being rewarded for good service.
- Loyal Customers: Recognize loyal customers with personalized messaging and loyalty-driven promotions.
- Wandering Customers: Previously loyal customers that have a lapse in visits may be spending their money elsewhere. Win them back with on-trend, just-in-time promotions.
- Fresh Catches: Everyone shifted during the pandemic. For some, this meant a completely new routine with new favorite brands. Keep the customers that you won over during the pandemic with an attractive loyalty opt-in.
- Potential Customers: Just as some of your customers strayed to other brands during the pandemic, there are plenty of new customers to attract. Use AI integrations to streamline your next big return-on-investment idea.
Use a small business loan to reinvigorate your business and customer loyalty initiatives. For example, create an app for your loyalty program.
There is no doubt about it–the pandemic hit the restaurant industry hard. Even as the acute pandemic phase has come to an end, many restaurants are struggling to bounce back — but recovery is achievable. Restaurants that invested in transforming their business are seeing the swiftest recovery.
Small business loans can provide the financial relief restaurants need. Alternative lenders offer fast funding and an easy application.
Apply online today for a business loan for your restaurant through QuickBridge. You may receive cash funds in your account in as little as one business day. Learn more about our financing options and take control of your business investments.