David Benowitz, President of Craft & Crew Hospitality, was a scheduled speaker at our now postponed Nightclub & Bar Show and was going to speak on culture and empowering staff. Those same traits are shining through as his team has quickly pivoted to keep revenue relatively high during this national pandemic. Four of their six locations are continuing with takeout and delivery at about 30-40% of revenue before COVID-19 closures. We virtually sat down with David to ask how he keeps his staff motivated and safe while also diving into the successful changes his businesses has embraced to keep cash flow coming in.
You have placed a great emphasis on team building and culture, how has that paid off during this time?
People show their true colors during times of crisis. Our team has really stepped up and is handling COVID-19 incredibly well. In order to be successful in this environment, you need a strong and dynamic culture and an invested team, because you can’t do this on your own. We have been fortunate to be able to keep the majority of our salaried managers employed, which allows us to be strategic with our new approach. Businesses need to be creative and continue to think outside the box, while managing everchanging daily responsibilities as we navigate what has quickly become a new, constantly evolving, normal. I emphasized to my team that we need to be doing things that others aren’t doing and bringing a unique offering to our community. The more unique and uncharacteristic the better. We are no longer a full-service restaurant. As soon as everyone internalized this, we were off and running. The ideas my team has come up with have been remarkable, and have truly saved our restaurants from closing.
In which ways are you supporting your staff and your community during this time?
A huge part of the Craft & Crew Hospitality culture is giving back to our community, so this came somewhat natural to my team. Starting the first week of the pandemic we began offering free lunches to any crew member and family in need. We have not put limits or restrictions on the number of lunches, or time of day can come to pick them up. We’ve had tremendous of support from our food distributor to enable this as well. Additionally, we offer an employee assistance program through Sand Creek Clinics. We are continuing to pay for these services even though the majority of our hourly staff members our furloughed. This service offers free counseling and therapy for staff who need help with depression, anxiety, chemical dependency, conflict resolution, relationship concerns, work or career concerns, financial troubles, grief and loss, PTSD and stress management. During times like this, these programs are crucial to ensuring the health and wellbeing of employees. Finally, through our Craft & Crew Cares program we have started a meal donation program for frontline healthcare workers. Anyone ordering for delivery or takeout has to option to add $6 fund a meal to be delivered to several hospitals in the Twin Cities area. Our customer base has already purchased over 1,000 meals and we’re aiming to deliver 10,000 meals doctors, nurses and healthcare providers during this pandemic.
You mentioned you have managed to keep revenue at 30-40% of pre-coronavirus levels. How are you able to achieve this when so many are struggling?
I think it was crucial that we took action immediately upon learning that restaurants were going to be closed in-store dining. Within 48 hours of the mandatory shut down, we were up and running with our new take-out and delivery model. We did have a small advantage in the fact our restaurants were known for quality take-out prior to this, and we had spent time and money optimizing our processes and packaging to maintain food quality in transit. But I was estimating we would only do 15% of our typical sales during this period. The key is to be innovative and get the word out, quickly. Communities are looking to support local businesses, but they have to know who you are and what you stand for. Social media is now more important than ever. Fortunately, we are able to retain our marketing team which has been so valuable in developing and disseminating our messaging during this time. We are doing more video messages than ever before which is helping to build engagement on social platforms. Every week, we challenge our team to come up with new ideas. Some have worked better than others, but we’re learning and adapting every day. This past week we launched a “Survival Grocery Store” in order to provide hard-to-find items like toilet paper, rice and burger patties as an add on to any take out order. This helps people avoid the exposure that comes with visiting stores and ensures they get what they need. Each week, we plan to roll-out a new idea with the intention of continuing those that catch-on through the duration of the shutdown. Worst case scenario, something doesn’t sell and we move on!
Finally, it’s really important to be communicating regularly (daily!) with your staff. If they are in the dark regarding any aspect of the plans, they won’t act. We’ve worked hard to stay positive and convey that positivity clearly and consistently! If the leader is down and not confident, it will trickle down faster than you can imagine! We have a constant real-time thread going for each store, enabling us to jump in and help at any point in the day. We also are running Zoom conference calls with all the managers at least once a week to go through updates, questions, and concerns. The more you can engage your staff during this time, the better. Also, don’t forget to recognize them for what they are doing, it’s so important! We just sent all of our managers $100 bite squad gift cards to use when they aren’t working.
In reference to the above, what changes did you have to make operationally to achieve these results? Specifically focused on technology and SOP.
Prior to COVID-19 we exclusively used one 3rd party delivery platform. We quickly changed that, adding Doordash, Grubhub and UberEats to all our stores. The majority of our orders are still coming through our website platform that was set up prior to COVID, but the extra $1,000 per week with each platform adds up. We are currently looking at technologies to streamline this as well, ideally adding the ability to view all these services on one screen, and interact with our POS system. The inside of our stores is unrecognizable as they are now set up to expedite a take-out only operation. We have set up stations inside the dining room where FOH employees can easily package food and keep it organized for pick-up and delivery. Finally, we have worked closely with our online ordering partners to make sure our menus are easy to navigate and that we are utilizing the technology to our advantage. The platforms support cross-promoting and upselling features we never knew existed, that we are now utilizing to sell more desserts than ever before. If you don’t leverage online ordering in the current environment, it’s going to be very challenging to succeed.
What are your plans with PPP or other relief efforts to ensure you will be back and running once we are through this downturn?
We are taking this one day at a time because it seems to change daily! We will be funded next week from the Payroll Protection loan and I think restaurant owners need to be very couscous as to how they go about using this money. There is a lot of information out there, and I would encourage everyone to work directly with a banker you trust rather than a third party. As of today, our plan is to hire back as many people as possible within the 8 week time frame in order to take advantage of the federal forgiveness option. I am hoping we will be able to ramp up hiring each week during this period, assuming we are allowed to re-open sometime in May. I don’t think there is a clear answer on exactly what to do, and not to do, as every restaurant and every state is in a different situation. We have also considered withdrawing the application before it closes and reapplying closer to the June 30th expiration date, but funds may run out and you may be unable to obtain additional liquidity for reopening. The worst-case scenario if you do take the money in April, and can’t use the funds during the forgiveness period? You then have the lowest interest rate loan you’ll ever see, ever. This does, however, need to be paid back within two years - so be mindful of how you are using the money.
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