Coronavirus survival guide for café businesses

coronavirus cafe business guide


Updated 31/3/20: Last night the government announced a new ‘JobKeeper’ payment. This is a payment for employers of $1500 per fortnight per employee. Read below for more details.

The Australian Government has announced that from 23rd March, cafes & restaurants are restricted to takeaway / delivery service only. Read on for ideas & resources to help with this transition.


It’s a tough time for Cafes & Restaurants right now…

Like me, a lot of people who would normally be out in cafes are stuck at home

it’s going to take a different approach to get through this, that’s where we’re seeing cafe businesses ramping up delivery & takeaway options to stay afloat.

In this guide, I’ll share a few creative ideas that our team have spotted as well as a quick outline of what Australian government support you can access.

Marketing / Business Ideas

1) Frozen / Ready Meals

We’re seeing a number of cafes focussed on ready meals. That is, pre-packed meals that customers can store in the fridge or freezer while they’re bunked down at home.

It won’t take long for people to get sick of plain pasta, rice and whatever else they bought in a panic from the supermarket.

This is an opportunity for customers to buy bulk food for pickup or delivery and keep it on hand

ready meals in fridge

2) Grocery Hampers

If you’ve been anywhere near a supermarket, you’ll know that buying any sort of essential grocery item is near impossible right now.

Some creative cafes have stepped in by putting together hampers of the ingredients they already have in stock for customers to take home.

These could include pantry staples, like flour or sugar, as well as dairy, coffee (of course), tea…whatever.

You can take this one step further by teaming up with other local businesses, like a bakery or a butcher, etc.

Check in with your foodservice supplier, they still have stock of the items that supermarkets can’t keep on the shelf – who knows, maybe they’ve got toilet paper?

grocery hampers

3) Driveup / Drivethrough Service

Some people can’t mix with groups of people, even for takeaway orders, that’s where this idea comes in.

Cafés are offering to deliver to the car, whether that’s out the front of the shop or in the carpark using a DIY drive-through setup. Watch the video below for a great example of this in action.

Clearly, this makes the most sense combined with a mobile ordering system like Hey You or Skip so that payment is complete before the customer arrives, but it could also be managed using phone orders.

UPDATE: Square have just announced they have added ‘curbside pickup’ to their online ordering system in addition to the existing delivery option.

4) DIY Delivery

Many cafes are already setup with a delivery platform like Ubereats, Menulog or Deliveroo.

However, some have decided to offer direct delivery to nearby homes and offices.

Apart from saving the fees of using a big delivery platform, the advantage of DIY delivery is that it makes use of your existing service staff, that would otherwise not be working.

cafe rocca delivery

5) All of the above!

A venue in Canberra, Pialligo Estate combined all these ideas to provide a drive through meals & grocery service on site.

Including fruit, vegetables, meat, drinks & even toilet paper, their creative thinking caught the attention on the local TV news:

Pialligo Online

One of Canberra’s top food and event venues has opened up a new contact free grocer.

Pialligo Estate, offering a click and collect service providing meals, produce and essentials to hungry locals.

Posted by WIN News Canberra on Wednesday, March 25, 2020

 

Ordering / Delivery Software Options

Of course, you can take orders from customers by phone, but you’ve still got to handle payment on pickup or delivery – which presents obvious problems

That’s where mobile ordering systems & delivery platforms come in.

The range from mobile ordering systems like Heyyou, Skip or Bopple to delivery platforms like Ubereats, Deliveroo & Menulog.

They all have fees, most range from 10% up to 30% of sales which you’ll need to build into your margins.

Alternatively, you can use something like FROLO, the ‘Free Restaurant Online Ordering System’ or the  Square online ordering system, which now includes delivery & curbside pickup options.

Pickup Delivery Order
Fees*
Hey You YES NO 13.5%
Skip YES NO 10%
Bopple** YES DIY $59/mo
Menulog YES NO 13%
Ubereats YES YES 30%+
Deliveroo NO YES 30%+

*excluding setup costs
**Bopple aren’t charging monthly fees during the crisis

coffee delivery trend ordering on laptop

Government Assistance Available

Click the links below for more on each of these

Australian Federal Government support includes paying staff wages,  cash flow relief as well as wage assistance for apprentices & trainees.

Here’s a summary of what they’ve announced so far:

JobKeeper Payment

On 30/3, the government announced a new ‘JobKeeper’ payment. This is a payment for employers of $1500 per fortnight per employee so that you can keep paying staff, even if you don’t have enough work for them. This includes both full-time and casual staff (as long as they’ve been with you for over 1 year) that we’re still employed with you as of March 1, 2020. The first payments won’t arrive until the first week of May, however you can register right now on the ATO website.

‘Boosting Cash Flow for Employers’

Starting in March, when you pay the PAYG tax for your employees, the government will pay 100% of this back up to $100,000 (minimum payment $50k) . So, if you employ staff, get your BAS sorted quick…

‘Additional Payment: Boosting Cash Flow for Employers’

From June to Sept 2020, when you lodge each BAS, the government will automatically make an extra payment equal to 25% of the amount they paid in the ‘boosting cash flow for employers’ (i.e. the one listed above), up to a maximum of $50k.

‘Supporting the flow of credit’

Starting April 2020, the government is going guarantee on loans of up to $250,000 to be used for working capital (i.e. cash to pay bills, wages, rent, etc). The loans will be up to 3 years, with an initial 6 month repayment holiday. We’ll wait to see what’s available from the banks shortly…

‘Backing business incentive’

If you buy a smaller asset (up to $30k), like an espresso machine or grinder, you can claim 50% depreciation this financial year. In short. buy moderately expensive stuff, pay less tax.

‘Increased instant asset write off threshold from $30k to $150k’.

In the unlikely event that you buy a new delivery van (or something else over $30k) before June 30, then your business can deduct the whole amount from your taxable income. In short, if you buy really expensive stuff, you can pay less tax…

NSW Government support includes cutting fees for hospitality businesses (no specifics yet) & payroll tax relief

QLD Government support includes low interest loans & payroll tax relief

Corporate Assistance Available

Click the links below for more on each of these

Update: Fri, March 20. The Australian Banking Association just announced that they are deferring loan repayments for small businesses for 6 months.

Commbank is reducing rates on business loans, offering deferred payments on business loans & overdrafts, as well as waiving merchant terminal fees for affected customers. Call the Business Financial Assistance Team on 13 26 07

ANZ is reducing rates on business loans, and offering access to additional credit. Call ANZ at 13 13 14 – business customers are advised to talk to their relationship manager.

NAB is offering deferred loan repayments, and business card deferred repayments. They suggest all customers experiencing hardship reach out to their banking manager, or give the general enquiry line a call on 13 22 65.

Westpac is offering deferred loan repayments, business card deferred repayments & merchant terminal rental fee waivers for up to 3 months. To find out more information and if you are eligible, call Westpac on 1800 067 497

Suncorp is offering deferred loan repayments as well as working capital assistance.

Bendigo Bank customers can apply for business loan relief for up to 3 months

Facebook is offering cash grants & ad credits (to use on Facebook & Instagram) to eligible small businesses. Click the link to get updates


If we can help directly, get in touch with us here


 

Ben Irvine
From owner / operator of his own coffee business, to product development for a coffee multinational, to consulting with independent cafe owners, Ben has been involved across a wide range of the industry over the last 20 years. When he isn’t brewing coffee, or writing about it, Ben is likely to be annoying his kids with 90’s music trivia.