More Restaurant Revitalization Fund Support Was Nixed, So Now What? Experts Offer Tips

Last week, the Senate nixed a $48 billion aid package for restaurants (during a procedural vote), likely dealing a fatal blow to an effort to provide a final round of relief for industries that suffered major revenue losses during the pandemic, according to a Roll Call report.

The new bill to replenish the Restaurant Revitalization Fund (RRF) would have funded those restaurant and bar operators that were missed during the first round and still waiting for assistance.

The RRF not passing in the Senate was an enormous blow to the industry, especially to the thousands of independent bar and restaurant owners that qualified for the program but could not get funds before they ran out.

According to Restaurants Act, nearly 177,000 eligible restaurants did not receive RRF grants as the program ran out of funds in a matter of weeks in 2021.

As a result, Bar & Restaurant spoke to some leading bar and restaurant consultants to get their take on what operators should do right now.

Seek Other Financing, Get Creative

Kevin Tam, franchise owner, author and operations consultant with Sculpture Hospitality, is blunt: Scramble for financing.

“Government money is nice, but seldom is it reliable,” he said. “Call every business bank immediately to secure lines of credit and other tools to ensure liquidity. Keep interest rates reasonable, nothing more than 10 percent, on anything you need to borrow. If all traditional lenders are off the table, start searching the private market. If you need money just to stay afloat, you may need to entertain the idea of borrowing money from friends, family or associates to get you through. Searching for financing is a sales job, so you have to pound pavement to make it happen.”

Market Your Business Like Crazy

If sales aren’t increasing consistently, more financing isn’t going to save you, so market your business – a LOT. “You may be behind on some bills and your finances [are] a complete mess, but your marketing activity is the only reason why you should be optimistic or pessimistic about anything,” explained Tam. “Your sheet level of output, based on the number of outbound communications you send out to solicit sales activity, is what determines your survival now. Even if you’re searching for financing, having increasing sales month after month after month shows any prospective investor you’re talking to that they're looking at backing a successful business.”

Tam pointed out that marketing also helps operators feel better because marketing gets them back on the offensive, which feels much nicer than staring at the bank statement and worrying about money.

Focus on What You Can

So maybe the government has let you down. The same thing happened in Canada, noted Tam, who said he was upset too, but he got over it and started concentrating only on the things he could control.

“Those things were my attitude, and my sheer marketing activity,” said Tam. “I chose not to get involved in the politics, the protests and the anger, because instead that time was better spent crafting ad copy, the next year's set of promotions, and adding more automation to sales processes. It paid off, because when the business climate got better, I wasn't scrambling for material.”

For his next quarter of marketing and promotion material, after funding did not work out, Tam had everything ready to send out, on time and without any second thought. He remembers what it was like during COVID-19 lockdowns when he was constantly scanning the news, seeing what the government was going to do next. Since this last reopening, Tam hasn’t paid attention to what the government is saying or doing because of how busy he is with work, because he now concentrates his energy on marketing.

Look at All Operations to Help Your Business

Mark Moeller, national restaurant consultant and owner of The Recipe of Success, agreed with Tam and said that bar and restaurant operators should focus on their operations – if the government isn’t going to help, they have to help themselves.

“Look closely at every expense, the details will show you where you can save quickly – credit card processing, menu adherence, jiggers (for the bar), time punches (who is punching in early or leaving late), linen costs, utilities. Every penny matters,” shared Moeller.

Moeller noted the average operator should be spending three to five percent of their net revenue on marketing. And if you aren’t doing that, you’re leaving a lot of money on the table.

He also said don’t give up on the RRF. “Keep the communication lines open with your local and state government officials. If enough people speak up, my hope is that they will listen and do the right thing,” he added.

Contact Your Suppliers and See Where You Can Save

Mary King, retail and restaurant expert with Fit Small Business, said now that the RRF funding is off the table (at least for now), owners still have many options – even overlooked things like negotiating rates with software and service providers can make a big difference.

King said when COVID-19 first sent the industry into a tailspin, POS companies and other software providers stepped in by offering price breaks, fee forgiveness, and developing new tools to help bars and restaurants deal with the new normal.“

Contact your software providers and inquire about any currently running deals or promotions you may qualify for,” said King. “See if it is possible to lower your payment processing rates, or lower your monthly payments. Contact your suppliers and inquire about lower cost products that could lower your supply costs. Mainline distributors like Sysco and US Foods typically offer menu planning tools to help streamline your menus and food costs.”

King said she’s seen sales reps sit down with operators and walk through their entire product catalog to help identify the best priced products to help navigate tight times. These supplier businesses rely on the success of small bars and restaurants to succeed, so they want to help restaurants and bars survive and thrive.

Communicate to Your Customers, Lean on Your Community

“If in the coming weeks and months you need to add fuel surcharges to delivery orders, add packaging fees to takeout, or raise prices in general, clearly communicate this to your customers,” King suggested. “The RRF failing in Congress is national news – as are surging fuel and wheat prices. The dining and drinking public will have heard about these things. Most of your customers will understand that their favorite local watering hole is feeling the pressure.”

To assist the independent businesses that were overlooked in the first round of RRF funding, the U.S. Small Business Administration created the Community Navigator program to provide support and resources to independent small businesses throughout the country. King said the funds were distributed to 51 small business hub organizations throughout the country. Bars and restaurants can find their local Navigator program to get financial guidance, community support, and to learn about local grant programs their businesses may qualify for.

Remember you are not alone in this. Numerous industry organizations have not stopped fighting for restaurant recovery, and King suggested that operators should plug into a community of local or like-minded bar and restaurant owners, who can share support and strategies for upcoming challenges.

Erin Flynn Jay is a reporter and publicist based in Philadelphia. She’s a Bar & Restaurant contributor, and some of her other writing credits include Next Avenue and Woman’s World, among many others.

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