“These three things are the most important right now in terms of pragmatic decision making: time, resources, and money.”
Mary Scherpe & Kate Bailey: Creating Concepts During A Crisis – March 20th, 2020
Mary Scherpe: Hello everyone – I am the co-founder of the Feminist Food Club, and I run Stil in Berlin. I had this idea to set up this live stream with interviews around the simple question: how do we deal with all of this. Today, we’re starting with Kate Bailey of Hospo Hotline and we’re going to talk about how to create valid business concepts in these stressful times.
It’s March 20, and the current situation in Berlin is as follows: we have a high increase in infections every day, there is no confinement in effect as of yet, restaurants and cafes can be open from 6 am to 6 pm, the rest is closed except for supermarkets and other necessary places. It feels like everyone is waiting for confinement to happen. There are a lot of people who are actively asking for it, especially from the South. And indeedBavaria was the first state in Germany who decided on it today, others will probably follow. Berlin is reluctant, they're waiting for how people will behave over the weekend, however there was fake news today saying that confinement would happen Monday, but it was debunked.
I’d like to be more optimistic but the current situation for gastronomy is a catastrophe. It's actually devastating, so many people have already lost their jobs, so many will follow, everything’s in disarray, people are trying to settle in the new realities. At the Feminist Food Club we are sharing information, and work on keeping spirits of our members up, discussing how to cope with this. Kate, thank you very much for joining me. How are you doing?
Kate Bailey: It’s a pleasure to join you. I'm doing very well for the circumstances. It’s weird to be back in the city I have worked in for 5 years, in this bleak and hard time, and seeing businesses and colleagues that I know so well, really hit by the impact of everything. But it’s good to be in Berlin and back with the community in some way.
Mary: So you actually came to Berlin a week ago because one of your clients was like can you come and help, right?
Kate: Well I actually came for a short business trip, it was planned to be a 3 day trip to do consulting on other stuff, and day by day it got worse and worse and I couldn't go home. Now I'm working with my clients to get something happening. I’ve been throwing around stupid tag lines, like ‘lets thrive not just survive,’ you know that kind of tiddly crap.
Mary: We want to talk about how to create concepts that can help businesses cope. i. First, we need to acknowledge that this situation is super, super hard. It’s hard on everyone, not just business owners, things are changing daily, all the plans you made, were thrown out the window, and a huge adjustment is necessary. It’s an unprecedented situation entirely! It asks us to be adaptable, quick and very creative, and that is a lot when you're worried about where the world is heading. This pressure is adding stress to an already strained situation. So I want to emphasize how important it is to not only take care of your business, but make it a priority to care for yourself:Creativity needs mind space, so you need to be kind to yourself and make space. . Lean on others: ask for help and advice. Make sure you eat regularly, stay hydrated, get as many hours of sleep as you can, and speak regularly to your loved ones over Facetime. In the end this is a marathon, not a sprint. This crisis is not going to be over in two weeks.
Let's get into my first question: what is your advice to business owners who are completely confused and overwhelmed, asking themselves whether they should close or stay open?
Kate: I would say, take a step back from the situation. Self care comes first. If you’re constantly consuming new information, it might prevent you from seeing the bigger picture. You might focus on details that actually aren’t important because they seem easily solved. Like doing all the paperwork because you feel like you got free time.
Take a step back for a second, and look at your business from a macro perspective. Once you do that, you're in a place where you can actually start making good strategic decisions. Like you said, it's a marathon, and it's about being quick, but also strategic. It won’t work out if you’re making fast decisions that in the end affect your business negatively or put too much pressure on you as the owner. If you’re going to trial something make sure it's in a strategic way to give yourself every opportunity to succeed. And that would be my first piece of advice: step back, reflect. Do whatever you need to do, to be able to do that. And that’s different for everybody, everyone has something that takes them away from this really heavy information. Your number one priority is being in a good head-space to make good decisions. And then start reflecting on the business.
Mary: Despair and anxiety are the worst consultants in any kind of business. It’s incredibly hard with this situation where there are no precedents, where there are no role models.
Kate: This situation is awful, so it’s probably a good thing you’re freaking out, because this will also tell you to move. But you don’t have to move immediately. First, you have to take a step back, and then start thinking from the ground up strategically about your business and what is sustainable beyond this. To avoid things that are wasting a lot of time and money. As a business owner, you can’t waste either, especially in Berlin.
Mary: Let’s start with the most pressing question: “do I stay open, or do I close?” Many are waiting for an official order, because that makes compensation by the government or insurances possible. But is waiting it out smart? Can you give us some points on how to make that decision, what would you take into consideration ?
Kate: There are two aspects to this: a pragmatic and an emotional one. In terms of pragmatism, you need to look at your financial cost-benefit analysis and need to be very realistic about it: “How much is it costing me to stay open? What bills am I driving up? Am I keeping staff on when it's not necessary?” In hospitality we need to remember that every minute we are open for business, we’re incurring costs. For small businesses, it’s not just about staff cost, but also about your own time. The question is, is your time best spent doing what you’ve always been doing, or should I shut down, have a rest, step back, and come back with a concept that will be more effective throughout the next couple of weeks? These three things are the most important in terms of pragmatic decision making: time, resources, and money.
Mary: And you have to factor in the public opinion. There’s been a turn in feedback in the last week, where before it was generally accepted when places still invited people to come in and eat, even encouraged them to support them by showing up, now the audience doesn’t appreciate open places because it’s perceived as inhibiting social distancing.
Kate: It’s hard to communicate to customers why a gastronomy business makes the decisions it makes. These days a backlash is hard to foresee since public opinion can turn fast. You need to factor in the emotional aspect: there really is a community around so many of these little shops across Berlin, it can be really hard to shut down that social space. It’s worth considering how people will respond to your decision, and the general public opinion on what is going on. Bear in mind you will never make everyone happy. In the end, you need to make sure it's about what is best for your business, what you want to deal with, and what your time and resources are going into.
Mary: It also depends on what type of business you have. People have a different kind of acceptance of certain things with some businesses that they don’t have for others. It’s a very difficult decision that has to be made by every business owner on their own.
Kate: It’s quite heartbreaking for many people, and this is really showing the demands of running a food business in Berlin. Most businesses need that constant cash flow, there’s no safety net from an investor available like in London or New York,, that is just now how the economy is here. When you have to shut down without any planning, your whole capacity falls out from under you. I see the community does a good job of recognizing that in this hardest of times
Mary: Currently, it’s entirely unclear when the help programs by the government are going to be into effect, when that money will come in. Let’s go through the options for making money business owners have right now. One thing that has come up quickly,, and that I have also pushed, is y to sell gift cards or vouchers. I know there are a couple platforms making this easier, that are built right now. Do you think this is a great idea for instant relief, or is this something that can also cause havoc, because you will have to deliver on those in the future and what if you can’t? In the end, these aren’t gifts, these are tiny loans.
Kate: Yes that's correct, so how do we solve that problem? When you think about food as a business you think about a singular profitable transaction: I give you food, you give me money. Vouchers are eventually going to result in some sort of absorbing of resources in the future. But at the same time that cash flow can be crucial right now. I suggest you look at your monthly reports from years past, and how you expect the business to perform financially once you are back to full business, based on those numbers from previous years. Be cautious with that expectation. Then, set yourself a budget of how many gift vouchers you are realistically able to absorb in the future . Reopening and then losing a ton of money on gift card gratuity over the course of a month will hurt your business. While it's a great way to stay connected with your community and help the cash flow, you need to be aware of what you can absorb in the future.
Mary: The motivation to buy these vouchers is incredibly high right now. However, this enthusiasm will very likely fade. The longer this crisis takes, people will start worrying about their own income and spend even less than now. If you're doing vouchers, you should definitely start right now. And it’s a very important point to set limits, to how many you sell, what you can actually buy with those, and maybe even assign them to certain months. Be mindful of your terms, add a not that if you aren’t reopening, the voucher can’t be paid back either. Customers should consider these vouchers their contribution in the overall trial to get through this crisis.
Kate: All of the nuances of it are super important and depend on your type of business. There’s a reason why so many people want to support small businesses now. They are aware how precious their contribution is. Focus on what you do best and develop solutions based on that, which is going to get you much further than just vouchers. I totally support them, but please be mindful of them being a lot of work. Every decision we make creates work.
Mary: Caroline from Muse just pointed out another benefit of vouchers in the comments: having your restaurant busy in the first, presumably difficult weeks after reopening can be a good thing for public perception.
Kate: In terms of having a full place, yes. But if it’s a restaurant full of people using vouchers, it means no money is coming in, because you probably spent that money weeks ago. You will still need to pay your rent, staff, etc at the end of that month, though. The budget on gift card selling has to exist based on what the restaurant can realistically afford.
Mary: Keeping a limit on gift cards is very good advice. Let's get to the next option that restaurants still have… takeaway. However, we don’t know until when this will be possible. In France, for example, where a quite severe confinement is in place, restaurants aren’t allowed to offer takeaway any longer. But it is also pretty easy to implement for many, right now. What is your stance on it?
Kate: I consider it an interim solution, not a long term, sustainable one. Only because we don’t know how long this will be possible. If we take notes from other countries, delivery is likely to be possible for longer, if not all the time. When you're decision making in a crisis, it’s important to not put too much energy into the unsure. I am apprehensive to recommend takeaway right now, because of this insecurity. It still requires work to set up, and then this was all in vain, if the government decides on more measures. It’s also different to delivery, especially if you don’t go for pre-order you have an unknown amount of produce and prep needed. And even if you do pre-order, what happens when there’s a general curfew? There's just too many limitations. However, it, again, depends on your business model. It’s easier for bakeries and breweries, but for businesses with made-to-order food it’ll be harder to make sustainable.
Mary: And bakeries are more likely to stay open because they fall under the same rule as supermarkets? But then, no one knows. It’s tough to say how long you can offer takeaway, but isn’t the product you offer for takeaway the same for delivery? So let’s talk about what looks at the moment to be the most sustainable option: delivery. The only corporate service we have at the moment is Lieferando, however they do take 30%, and they are at capacityThere were rumours about them maybe waiving or lowering fees, but they’re known to be a business that is entirely profit-driven with little regard for community, or quality. So what other options are there?
Kate: There are limited resources in the city in regards to how we can deliver food, we've acknowledged that. There are some awesome networks, and some people have put together delivery services in the last week, our very own Lauren Lee and Sarah Durante got something off the ground...
Mary: Rocket & Basil by Sophie and Xenia von Oswald are also onto the delivery game, as are Albatross, who have added Isla Coffee, Companion Tea, and Alte Milch cheese.
Kate: So there are ways to do that. In terms of setup it depends on the format your delivery option takes. You've got the option of doing a service to order, but that requires infrastructure most businesses don't have. What makes it easier is to offer pre-order with delivery time windows, that you can prep and plan out better. It’s easier to control that service, and it’s more cost-effective.
Mary: So instead of people calling in whenever saying ‘I need that tahdig now’ it's ‘order Tuesday for delivery on Friday, or order today and delivery tomorrow.’
Kate: I think it would be more like ordering for the weekend or Thursday, Friday, Sunday dinner service. It will allow businesses to know how much produce to order, how much staff to get in, how much to prepare, in the end it’s about eliminating waste and keeping overheads super light. Not to say there aren't businesses that can absorb the standard delivery option. If you're a pizza place, a burger place, all these sort of places are easily adaptable to call in. But for others there is so much prep that such a service could mean financial disaster.
Mary: Do you advise businesses to change their product right now? We’ve seen this for example with barra, where they now started offering chicken sandwiches for takeaway.
Kate: I encourage people to be as creative as possible. Look at your menu and ask yourself what do people love the most? Then consider, how does it look in someone’s living room versus how it looks on a plate you prepared? You need to be realistic about what food you can send out. You can serve the best beans in the world, transport them to someone’s home and they end up looking like a legume murder scene. So you need to look at the type of food you’re making and what is possible. Let’s say you have a curry place with rice as the base and different types of curry. Then you can offer it as an add-on menu. Try and break your menu down into foundations and additions. That's going to keep the management easier and also allow people to adapt to the delivery format.
Mary: It's a very good point to think about what people already love about your business, to figure out what your popular product is and to transform it so you can keep selling it now. This also requires new marketing tools, people don’t yet connect your brand with delivery food, you’ll need time to introduce this idea. Ash Lee of Chungking Noodles was very smart about it, she changed her usual product of Chongqing noodles into an at home product, where she’ll send out a kit with noodles and sauce to finish at home. Or Dalad Kambhu who offers Thai curry takeaway at her Michelin starred Kin Dee restaurant. There are options to be creative. If you don’t know what people love about your place, now’s the time to find out. Reach out to your customers and ask.
Kate: You need to also consider that most places deliver an experience. People go to them for the atmosphere, interior, and so on , so when this falls away, what is left? If you have an awesome sauce, maybe jar it, and sell it. Once you get the first idea, more will come. Keep it simple and optimize this simplicity. It’ll reinforce why people loved you in the first place.
Mary: Some restaurants are going further and send out produce boxes with recipes. For example Ms. Robinson. It seems especially popular with the fine dining spots. Do you see a big market for this?
Kate: The question is the same: Is it easy, cost effective, and does it make sense? Those are the three things that are really important about deciding whether to do it. Unless you are known for having exceptional produce, people might not respond to it. If there's already an overexposure of people doing the same thing, it may not be the right idea. You need to make a realistic cost-benefit analysis to know.
Mary: The idea to put your most famous sauce in a jar and sell it leads to other ideas like general merchandising. Making shirts, print mugs... Should all places now have their own t-shirt?
Kate: My perspective is the same as Honey Boo Boo’s, ‘a dollar makes me holler,’. Every business wants to make money, right? However, you need to remember the overhead. If this isn’t something you’re good at, should you be trying your hand at a new skill during a crisis like this? Probably not. So if you decide for it, reach out for support. And create something that reflects your brand and your business, that you worked so hard for. If it’s creative and genuine, people will be motivated to buy it.
Mary: Now that walk-ins and chats over the counter are a thing of the past, how do you communicate these new services? My pet peeve in Berlin is that so many restaurants and food places don’t run a website, don't have working social media channels, don't have a newsletter, and communicate very sparsely. What do they do now?
Kate: I agree that it's important to have as much public information available as possible. What easy options are available to you now? You can get a website on Squarespace and others like that for 15,- a month. If you do events, is it possible to sell the tickets on a ticketing website?
Mary: But no one does events right now?
Kate: I mean digital events, like a facebook event promoting a delivery service day for which you can sell pre-order tickets.
There are a lot of resources that can support you, that don't require a lot of technical skills. Find out where your biggest audience is and address them there. Build up a newsletter, populate your Instagram account. Be as creative as possible, don't make any huge investments in time and resources, but do some tests.
Mary: It’s definitely not too late, the motivation of people to support small businesses is very high right now, so every day counts. Social Media channels are the only contact you have to your audience at the moment, and they can add emotionality to your message. Let’s summarize your approach once again, what steps does one take?
Kate: I created a 20 question questionnaire to help you step back and look at your business, to reach a clear vision from the top level. Contact me on Instagram or hello@hospohotline.com to get it. Let’s go through the first five.
Question 1: What existing resources does your business have? You need to start with this huge question, because you need to know what’s available to you. You don’t want to be spending money you don’t have. This will also prompt ideas, you might discover things like unused takeaway boxes. Use what you have before you buy new.
Question 2: What is the experience I want people to have? What is my brand, what do I do well, what do people expect of me, how do I want people to feel? And how can I make that look good in a box? You can implement this with little things like adding a note on how to prepare or plate something, something that is a little moment of service - think of it as your current front of house.
Question 3: What options are possible? There are so many out there: takeaway, vouchers, merch, delivery – what about crowdsourcing, or a cooking class channel – there are a lot of ways to utilize your resources to connect with your community. Even if they first sound crazy, write down as many as you can, because within all of it there is the one.
Question 4: What would build into my existing service naturally? Businesses in food rely on systems, processes, and people. Is there a way for this idea to roll out in a very natural and organic way? In a way that isn’t going to create a ton of extra work or require entirely new skills?
Question 5 is essential, you can't decide anything until you answer this: What additional cost would each of these options create? Some of them will be impossible to implement, so throw them out. Some of them might work, so then you can take those ideas and trial them. For example, a delivery service. You do the first one, pre-sell tickets, make a little profit, so you do another one. Then go back to tracking the numbers, optimise, and so on.
If you can't get past question five, step back and repeat the process. My best advice for business people right now is to be careful with your time, resources, and money, and be realistic.
Mary: Not to forget about mind space. Here’s one question from a viewer: What do you think would be the best way to support small food businesses?” The best advice I can give to customers and eaters is to stay connected with your favorite places – check in with them and their offers. Keep doing that when the first two or three weeks of this mess are over. Be considerate where you spend your money. If you have the time and money, put in a little research to find small, local, independent shops, and contact them about delivery options.
Kate: I want to add that in this time of isolation, spreading the words is essential: if you order something, tell your friends about it, share it on social media. Be a cheerleader - if one extra person orders that night because of your shoutout, you have done something really good for that business. Make noise, that's what the community needs right now.
Mary: And if you can’t afford ordering food, just like their stuff on social media. Every little thing really helps.
Transcript by Juliette Groarke, edited for clarity, readability, and length by Mary Scherpe.