Though social distancing measures have limited most food service businesses to outdoor seating and take-out, the chillier months ahead call for new strategies around indoor dining in order to stay in business. The question on every restaurant owner’s mind now is, “What can I do about indoor dining, and how many customers can I serve?”
Here are just a few tips and strategies to consider for your restaurant as you head into winter.
Limited capacity during reopening
Current NYS guidelines for indoor dining limit restaurants to 25% capacity while enforcing social distancing measures. In addition, NY requires:
- 25% of your business’s normal seating capacity
- 6 feet of distance between tables
- No bar seating
- Closing at midnight
- One person from each table to provide their contact information for contact tracing (if necessary)
- Adequate ventilation and limited air recirculation
You can find information on guidelines for NJ restaurants in the NJ COVID Information Hub, and for PA restaurants on the PA Governer’s website.
Breaking-even with the new capacity limits
With reduced seating capacity, restaurant owners are squeezed between expenses and revenue potential. As a restaurant owner, it’s important to know your break-even point, or the minimum number of customers you’ll need to serve in order to cover your business’s expenses. Take the following steps:
Step 1: Determine your seating capacity
Twenty-five percent seating means that you can only fill up to 25% of your restaurant’s legal occupancy at any point in time. This does not include bar seats, so exclude any seats at the bar from your indoor dining calculations. If your restaurant has 100 seats, 20 of which are at the bar, your 25% capacity-limit would be 20 people.
Step 2: Determine your required turn rate
Your turn rate is the number of times you’ll need to fill a seat per day in order to break-even. If you’ve been running your restaurant since before the pandemic, then you’re familiar with the typical amount of time customers stay in the restaurant. With this information, you can figure out whether it’s feasible to operate indoors.
If your restaurant has $15,000 in monthly expenses, an average check of $60 per person, an average food and beverage cost at 33% of sales, and a capacity-limit of 20 people, then you can determine your required turn rate as follows:
- Contribution margin: average check ($60) – average food cost ($60 X 33% = $20) = $40.
- Break-even customers per month: monthly expenses ($15,000) / contribution margin ($40) = 375.
- Break-even customers per day: break even customer/month (375) / 30 = 12.5
- Required seat turn rate: break-even customer/day (12.5) / capacity-limit seating (20) = 0.625
For this example business, it’s entirely realistic for them to break-even on their expenses, as they only need to turn their seats 0.625 times (less than once per night) in order to cover their expenses under the new social distancing measures. Other businesses with an average check that’s lower will have to work harder.
Consider a restaurant with the same monthly expenses, the same seating capacity, the same food and beverage cost percent, but with an average check at $15, this company needs to turn the seats 2.5 times per day. Once you calculate this figure, you’ll need to compare it to the average seating time. Ask yourself, if your business is open for 8 hours a day and each guest stays for 2 hours, can you fill every single seat 2.5 times?
Floor planning for the new requirements
With guidelines limiting capacity to 25% while preserving 6 feet of distance between the tables, you’ll want to map out your tables in order to maximize the number of seats in your restaurant.
At the most basic level, you can use paper and a ruler. Or you can use a simple tool like PowerPoint to create squares or circles on a slide and measure the distance between them.
At a more advanced level, there are free floor planning tools like SketchUp Make or DreamPlan, as well as social distancing consultants you can hire. All of these options are up to you, and how much you get involved in floor planning for social distancing depends on how easy or hard it will be to break-even.
Here are some things to consider that could make a big difference:
- Table size: By law, tables must be 6 feet apart. That’s 6 feet from the end of one table to the beginning of another. So, the size of your table affects how many seats you can fit substantially. Ask yourself, can you change your service model or afford to have smaller tables in the space?
- Number of people at a table: The new rules specify that your capacity be set at 25% of your normal capacity. In some cases, this might be substantially more than the number of people that can fit at tables spaced 6 feet apart. If this is the case, you’ll need to figure out how to put more people at a table and figure out how to attract larger parties to come to your restaurant.
- Table arrangement: Not all table arrangements are the same, especially if your tables are square. Make sure to use layout software to set up your room and test out having tables arranged parallel or on a 45-degree angle to each other to see which affords more space in your room.
Though new requirements often bring new challenges, in every challenge there are opportunities to move forward:
- Larger groups mean larger checks. If you can persuade your customers to come in larger groups (filling a smaller number of tables), then historically the average spend per customer tends to go up
- Your contact tracing list can become a customer retention/email list
- A smaller number of guests inhouse means you can try out menu items that would have been impractical at a larger scale
Use these tips and other resources to ensure you’re maximizing your indoor space while staying in line with your state’s requirements. And if you need assistance, get in touch with us today.
