The ongoing coronavirus (COVID-19) outbreak has disrupted global markets, caused mass public shutdowns and inspired anxiety all over the world.
The coffee industry has not been immune. In late January, Starbucks in China closed more than 2000 stores. Although the company recently announced the reopening of many of their stores in China, the country’s retail sector has struggled amidst quarantines and consumer trepidation. A similar phenomenon has occurred in parts of Italy, with once-bustling cafes being temporarily abandoned.
As more coronavirus cases are expected to be diagnosed in the United States, coffee retailers need to prepare for a potential disruption in business. The question we need to be asking ourselves as cafe workers, owners and other coffee professionals is, “How can we best prepare for disruption?”
Further, we need to consider our obligations, both to our co-workers and our community, to keep our public eating spaces as safe as possible, both from the risk of disease communication and from the stress and financial peril that a downturn in cafe business could cause.
While making no attempt to be a legal or medical guide, this piece focuses on the lowest-cost, highest-reward actions that can be undertaken by cafe owners and staff should disruptions to business as usual come to pass.
Be prepared for local health authorities to temporarily close cafes
This has already happened in China, Korea, Japan and Italy, with cafes being shut down for a matter of weeks in some locations.
Prepare emergency funds
Having an emergency fund in these times is critical. Everyone should ask themselves how many days of unemployment or severe under-employment it would take before they can’t make their rent, mortgage, car or other critical payment.
For workers who are not experiencing illness, it might also be wise to save available vacation and sick time in case of a longer-term emergency. It would also be wise to cut back on discretionary spending while allocating any extra money into an emergency fund. The prospect of making those changes may be unappealing, but should everything work out for the best, people will surely appreciate having the extra vacation time and cash.
Cafe owners should talk to their staff about basic responsible financial planning. The downside risk to taking this action is zero. The upside to having these talks or meetings has many facets:
- It shows you care about your staff’s well-being and are invested in their future
- If cuts to hours become necessary, it could minimize the resentment
- Regardless of outcome, basic financial planning by all staff increases the resiliency of a community and a business
Owners should consider how much cash flow is needed to maintain all obligations
Cafe owners have a moral obligation to make sure they have enough cash on hand, or access to capital, to cover all of their obligations for compensated time off given the absence of normal operating revenue.
If the cafe does not have revenue for a month or more, how much cash on hand is needed to cover sick pay, rent, overhead, insurance and other fixed costs that can’t be reduced? Schedule some time with an accountant or financial professional to ensure that you know your restaurant’s fixed operating costs and how much cash you need.
Consider a line of credit
For many owners, having this amount of cash on hand is not immediately achievable. If you find yourself in this position, you should talk to a bank about setting up a line of credit. Many local banks are willing to work with locally owned cafes to establish low-cost, low-interest credit lines.
If your cash on hand is not enough to cover compensated time off liabilities and other base overhead such as rent, vehicle payments, inventory payments, etc., it would be prudent to have such a line of credit available, coronavirus or not.
Inventory planning is essential during potential outbreaks
Cafe owners and management should also keep track of the spread of the virus and the government response to the spread. If a shutdown or sharp drop in business seems likely, consider adjusting the amount of inventory on hand. Inventory of perishable items such as milk and other refrigerated items should be closely monitored.
Consider alternative business models, such as delivery and pickup orders
Cafe owners may also want to consider a shift in business from cafe-based sales to phone, online, delivery, or otherwise off-site sales as there will almost certainly still be a demand for cafe drinks. There are a number of different platforms that support these types of sales and, again, the downside of exploring these options is essentially zero.
Communicate and educate
Fear and misinformation can become rampant at times of public stress, particularly with an unknown pathogen. Make sure your staff understand how the virus spreads — through coughing, sneezing and saliva — and what they can to prevent contagion.
Review all cleaning, sanitation and hygiene procedures with staff
For many employees and managers, the food safety classes are a distant memory. Refreshing everyone on best practices for hygiene is a great place to begin preparing. A cafe is a community center and staff must take every available precaution to minimize risk for public safety.
Additionally, surfaces within the cafe that are commonly touched by customers — such as touch screens, condiment bars, entry doors or bathroom fixtures — should be considered. Sanitizing wipes or tissues with small trash cans could be placed near commonly touched areas. Operators should also consider moving the condiments and drink lids behind the counter, while also adding a sanitization step to mugs brought in by customers.
Fear vs. preparedness
Shop owners should attempt to strike the right balance between fear and preparedness. There is so much we don’t know about this virus and if or how it will spread in the coming weeks or months. However, taking the steps above may well improve our collective resiliency, while also providing a sound foundation for public health and safety during the cold and flu season.
Editor’s note: Any opinions expressed in this piece are solely those of the author/s and do not necessarily represent the views of the Daily Coffee News or its management.