Fail to prepare, prepare to fail – now is the time for pubs in Australia to act
There’s no doubt at all that Australians love going to the pub. Whether it’s to meet up with mates, watch the footy or put a wager on the horses − pubs are establishments that are part of our social fabric.
And many are beginning to re-open albeit in a very different landscape where only those who best prepare for a new reality of trading will prosper.
Understandably there’s a lot to do.
Our view is that there are four things publicans need to keep in mind:
- The need for capital expenditure
While the full re-opening of pubs when it happens across the country will be a welcome sigh of relief for many, it doesn’t mean that COVID-19 is over and everything we learnt should be forgotten. With the government’s words of ‘Stay Safe’ expected to echo for at least the next 12 months, pubs should expect a new norm of social distancing and stringent sanitising.
So now is the time to get creative.
Many pubs have already opened their doors with a whole new way of trading. Bottle shops and groceries in the public bar, take away only from the bar and the ubiquitous gaffer tape crosses on the floor.
Although the capital expenditure required to become COVID compliant will be essential to get a ticket to trade, it’s going to be important for customers too. Patrons will want to feel safe, and that means visibly demonstrating measures like hand sanitation stations, table service, disposable menus (bring back the blackboard) and venue cleaning to reassure patrons that the venue is COVID-19 compliant.
- Understanding how you will engage your customers
This one’s a tricky one and really depends on the pub itself and its location. Put simply, the amount of revenue that was seen prior to COVID-19 won’t be seen for the foreseeable future. Unlike restaurants it’s unlikely you have an extensive mailing list – this is not the way of most local pubs, but your connection with your clientele is going to be fundamental in ensuring profits are maximised and you become their first point of call as restrictions start to lift.
For example, for a pub trading in the CBD, the new focus could be about capturing the gradually rising number of people returning to work. Forget the large corporate gatherings following a swanky lunch on a Friday or the international tourist dollars which made some of these establishments so profitable; now the focus is on engaging the new breed of customer who might just be looking for the odd schooner and a meal after work. Whether it be converting the unused function room into a comfortable lounge for patrons to sit in, or more tables widely spaced, the foreseeable future will be about standing out above the rest of your competition to ensure you are the best venue for your COVID-19 safe consumer.
We’re not saying it’s going to be easy – but every small group of customers is going to bring back another group when the restriction on numbers starts to lift.
- What have we learnt during the shutdown that we can employ into the future?
No one can dispute that COVID-19 has brought with it much pain and suffering for many in the hospitality industry, including the large number of staff it employs. However, while the going has been tough, many establishments are resilient and innovative and have come up with new ways to ensure a revenue stream for the business. Make no mistake, the requirement for home delivery alcohol and food will still be around for the foreseeable future and what better way to keep in touch with your customer than arriving at their door with a drink and a meal. Home delivery should remain an important and viable part of your new business model.
- Do I have the revenue and cash-flow to sustain the business?
With no international tourism dollars in the foreseeable future and strict social distancing measures in place cash flow is going to be tough.
Ensuring there are adequate funds in the bank to finance any debts (which also calculate into future profits in the new environment) is imperative to future operations. Prior to COVID-19 there were many establishments that negatively geared, based upon forecasted future profits. So now is the time to have constructive talks with banks and private equity firms. If loans can’t be sorted out look to business restructuring options. But make sure you go in with your revised business plan that demonstrates how you will continue to be a viable and newly innovative business.
Although a handful of patrons may seem a very small beginning, it is just that – a beginning. Shutdown has forced us to think beyond the bar – who would have thought just a couple of months ago that people would queue for take home cocktails. Innovation amidst the constraints, managing our cashflow and taking advantage of government assistance is going to go a long way towards ensuring we continue to see pubs being a quintessential part of our nation’s culture for many years to come.