Hi fam, we are Hope & Sesame, an independently ran speakeasy cocktail bar based in south China. During the virus outbreak, we have been forced to close our doors since the end of January, meaning we were closed for over 8 weeks (please check out the following link for an article we wrote around 4 weeks into full lockdown http://hopeandsesamegz.com/tips-for-small-business-owners-during-covid-19-outbreak/ ). Situation in Guangzhou (and China in general) is getting better, with little to no confirmed domestic cases in over a couple of weeks, meaning the society is slowing getting back on its feet.
The situation started to turn for the better around 6 weeks in, with confirmed cases plateauing and dropping significantly. Restaurants and cafes were slowly allowed to open with 50% of the usual capacity, with strict measures of temperature and traveling history checks at the door implemented. However, the entertainment business deeming surplus to “daily essential activities” including karaokes, nightclubs and bars were not allowed to open until a couple days ago. As small business owners, although we are starting to see light at the end of the tunnel, there is another battle looming over us – consumer confidence.
But first, lets revisit our situation 2 weeks ago (week 6 of lock down):
Situation (week 6):
- Confirmed COVID 19 cases, plateauing and dropping significantly.
- Restaurants & cafes allowed to open with 50% usual capacity
- Bars & clubs remain closed
Actions taken by Hope & Sesame (week 6):
Revenue driven strategies:
- We are working with restaurants (with a lower reputation for cocktails) which are allowed to open to sell our canned cocktails
- Expand merchandise products to t-shirts, caps, glassware, bar snacks, canned cold brew coffee. All items sold on delivery app & wechat official account.
- switched packaging of takeaway cocktail from plastic bottles to tin can, more pleasant design with sustainable mindset.
- Engaged with alcohol brands to promote takeaway cocktails on social media platforms with large following
- Launched 3rd edition of takeaway cocktails, changing menu every 2 weeks to keep guests engaged and interested.
- Create special buy 2 get 1 free promotion on international women’s day, offer only for women guests ordering that day.
- Work together with the Guangzhou opera house to launch a co-brand cocktail based on their upcoming musical, the cocktail will be advertised and sold on the opera house’s social media, expanding our reach. (We are traditionally a very proud industry and often unwilling to work with other sectors, but during unstable times, its important to not let ego get in the way and explore every viable option to expand reach) We are also working with clothing brands to do co-live broadcast shows, leverage resources to enhance exposure.
Cost saving initiatives:
- Implement a two-time salary payment for senior staff, meaning 50% of the usual salary will be paid at the beginning of the month and the remaining 50% to be paid at the end of the month. This will ease the pressure on cash flow (but only if you also have revenue streams coming in)
- We were in the process of acquiring a small business loan with low interest rate, just in case we are ready to open in the near future, and will need a bit of cash to re-order stock. Also gives us a bit of a cushion financially.
At week 6 with our precisely executed action plan, we remain in a financially stable position. Our takeaway cocktail sales accounts for around 20-30% of our regular income, with 5% additional income coming from merchandise sales. We managed to pay all of our employees in full (without laying off anyone), paid our rent (was not given a deduction) and our suppliers. That is obviously taken in consideration that us as owners have forgone all profits.
Fast forward to the time we are writing this article (8 weeks since lockdown), Hope & Sesame has been allowed to reopen a couple of days ago, along with nightclubs and other entertainment venues aside from cinemas. At this point, our mentality is of course focused on bringing our customers back through the door, making up for lost times. However it is also a time to we did the most reflection, especially on the way our business should be ran moving forward.
Situation (week 8):
- All F&B venues are allowed to reopen with strict temperature & travelling history checks.
- Lives returning to normality, including work schedules and weekend activities.
- Schools remain closed, along with large public entertainment events.
- People do not hesitate to go out to restaurants for meals, but remains cautious about entertainment activities e.g. bars & night clubs.
Actions taken by Hope & Sesame (week 8):
Revenue driven initiatives:
- Launch new brunch & dinner menu in our restaurant / cafe – Charlie’s. This also gives staff something to engage in during the down time.
- Maintain takeaway cocktail revenue stream, at the same time adding new non-alcoholic options .
- Creating special in-bar experience as major talking point / photo-opportunity / interaction. We created an absinthe table side trolley, which is new to the market here, creating a good buzz.
- Begin to invite influencers and magazines to cover the “relaunch” and new menu. Hopefully creating desire for customers to repatriate.
- Be compassionate when promoting reopening, do not over promote as a lot of guests may have loss someone to the virus.
- Continue with doing live video content, as it is the new norm.
- Begin at 50% of usual occupancy. Spatial separation between tables and sofa.
- Suspend any punch bowls or shared cocktails
- Temperature & travel history checks at the door. Ask guest to leave contact details just in case for traceability.
- Provide hand sanitizers in several obvious locations in the bar
- Make sure all glassware are washed in dish washer at a high temperature with disinfectants.
- Do not taste cocktails with cocktail spoon and back of the hand. Suggest to pour cocktail in a smaller glass to taste instead.
- All kitchen and bar staff continues to wear face mask.
- Each table is wiped down using single use paper towel and sprayed with disinfectant after each usage. A sign saying “sanitised” will be placed on each table after cleaning to avoid any staff forgetting to clean the table. Also it gives customers a sense of confidence.
Pivot / looking forward:
- It might be premature, but should your company be financially stable, it is a good time to look into expansion. One’s loss could be another’s gain, look out for good lease deals and a lot of developers will be looking for tenants to fill the void.
- For future venues, we are looking at creating smaller concepts in smaller venues with low overhead cost, remaining nimble facing future uncertainties.
- Time to revisit the structure of the company, streamlining tasks and positions. Revisit manning structure, keeping only what is necessary.
- We are working towards building back up a 2 months cash flow reserve (how to calculate: 80% of your labour cost + 80% of rent + 60% of total supplier cost. Times total number by 2).
- It is a good time to show gratitude to brands and customers who has shown support during the past 2 months. Create good deals for customers in the first two weeks, and consider collaboration with brands who has shown support in the toughest time.
- In a couple of weeks, we will launch a special offer for all medical staff, thanking them for their service.
Lastly, we want to use this opportunity to thank our loyal customers and brands who has supported us during this unusual time. Also not to mention our team who has been our rock and were exceptionally flexible and understanding amidst the uncertainties.
Stay safe and stay strong!
Hope & Sesame
(Amethy, Marcia, Andrew & Bastien)