To business owners: what you need to do now

April has arrived, and the turmoil shows no signs of subsiding. Even those who were optimistic at first seem to realize the situation is dire, and I have started receiving requests for countermeasures.

Actually, I wrote about these countermeasures over a month ago, on February 17th.

Two days after that, I wrote about it in even more detail.

A month and a half has passed since then... and the situation has only gotten worse.

And unfortunately, this situation will likely continue until at least May or June.

While there is a non-zero chance that countermeasures might miraculously work, it is highly probable that we will see a cycle of intermittent requests for self-restraint until the situation settles down after the summer.

Customer traffic... will likely stay away.

If the number of severe cases and deaths begins to rise before long, the grief of the surviving families will likely be dramatized on television and elsewhere, and fear will likely spread.

Even without that, this infectious disease is spread through droplets, and the 'three Cs'—closed spaces, crowded places, and close-contact settings—are considered high-risk.

No matter how hard you try to ventilate, there are limits for restaurants that rely on operating within a physical space.

Takeout and e-commerce have their limits too

In a previous note, I talked about how you should diversify your income through takeout, e-commerce, and so on! Those who acted quickly were featured in the media and likely saw some results.

However, the fundamental business model of a restaurant is designed to succeed only when customers come in to eat and drink.

Even if you charge 1,500 yen for a single takeout bento, the profit margin is thin. That is a model that only works through high-volume, low-margin sales.

Furthermore, if you use Uber Eats, over 30% is taken as a commission. If you handle delivery yourself, you have to pay for staff labor costs.

It is better if customers come to pick up their takeout, but when you consider the cost of containers and other factors, it is impossible to make more profit than you would by having them eat in the restaurant.

This approach is essentially a life-prolonging measure, a technique to delay the inevitable end just a little bit. In other words, if things continue this way, you will go under before long.

Either run away now, or steel yourself and find a way to survive.

If your loan repayments are finished and your property lease is nearing its expiration, it may be time to calculate everything and consider an exit strategy. If you are incorporated, another option is to take out a loan to extend your business's life as long as possible before liquidating.

However, in reality, you probably cannot make such a cold-blooded decision. If you have employees to support, choosing sudden bankruptcy is even harder.

In that case, you have no choice but to resolve yourself to survive.

Once you have made that resolution, there is only one thing to do: secure cash.

As long as your cash does not run out, your business will not collapse. Even if you continue to operate at a loss or your debts pile up, you can keep going as long as you have cash.

First, please check the information provided by public institutions.

[ Ministry of Economy, Trade and Industry ]
To business operators affected by
the COVID-19 pandemic

https://www.meti.go.jp/covid-19/pdf/pamphlet.pdf

There are several measures you can take.

Finance (Defensive)
1. Receive interest-free loans
2. Negotiate rent reductions
3. Consult and apply for employment subsidies

Sales (Offensive/Short-term)
4. Takeout
5. Online sales (EC)
6. Delivery (Direct mail to the local area)

Information dissemination (Offensive/Medium to long-term)
7. Disseminating information via social media
8. Turning expertise into content
9. Repurposing professional skills

Finance (Defensive)
1. Receive interest-free loans
2. Negotiate rent reductions
3. Consult and apply for employment subsidies

You won't die as long as you don't run out of cash, so the first priority is securing cash. While loans are debt, this is a special case where you can receive them interest-free, so if you can borrow interest-free, you should borrow up to the limit.

Next, reduce fixed costs. Let's negotiate rent reductions. A notice has also been issued by the Ministry of Land, Infrastructure, Transport and Tourism. (Request to consider implementing flexible measures regarding rent payments for tenants such as restaurants in light of the impact of the COVID-19 pandemic)

And regarding the employment of your staff, please consult with Hello Work about employment subsidies. It may not cover everything, but it is better than nothing.

Also, while cash is extremely important, do not make the mistake of turning to high-interest lenders like loan sharks!

Tokyo might provide compensation... possibly. Please keep an eye out for further updates.

Sales (Offensive/Short-term)
4. Takeout
5. Online Sales (E-commerce)
6. Delivery (Direct mail to the local area)

While securing your current cash flow and minimizing bleeding fixed and variable costs as much as possible, you must earn the cash that will serve as your fuel.

There are several means available: takeout, online sales, and delivery.

This note is very helpful. It contains case studies by region, including interactions with public health centers. Let's try imitating them.

However, there is little chance of success if you do it blindly. You must once again dig deep into what your restaurant's selling point is and what method you should use to approach customers.

This is the current situation in NY, which entered a lockdown a step ahead of us. If things go poorly, Tokyo could face a similar situation.

Putting a sign in front of your shop is almost ineffective. If you are going to do it, use direct mail for the local area and announcements on social media.

Announcing on social media might feel difficult for those who haven't done it before. But you have no choice but to get used to it.

Also, it would be good to ask your regular customers for help by distributing flyers. If you copy information onto an A4 sheet—such as your shop's account, contact details, how to order, prices, and delivery or pickup methods—and distribute it, it should have some effect.

Google Maps has also added icons for delivery and takeout! Make sure to register right away.

Furthermore, you don't have to sell only your own shop's items.

For example, you could plan a service to deliver ingredients from producers along with your dishes, or team up with a local liquor store to deliver alcohol plus meals.

You could also collaborate with friendly shops in the area to offer a course where multiple shops provide dishes on a rotating basis. If you work as a group, the cost of promotion will decrease.

Information Dissemination (Offensive/Medium to Long-term)
7. Information dissemination via social media
8. Turning know-how into content
9. Repurposing professional skills

I said this back in February. I will say it again.

As long as staying home is essential and prolonged, the weapon left to us is the internet. Use the internet!

First, let's set up various social media accounts. The four essential ones are Twitter, Instagram, Note, and Facebook, along with Google My Business (the page for Google Maps).

Use Twitter for gathering information and networking. Information on grants and know-how from others in the industry will also come your way.

On Instagram, use hashtags with your local area name plus your business type or menu items to promote takeout and online sales.

On Note, share honest talk about your struggles and current situation, and turn the expertise you've cultivated into recipes to provide useful information for people at home. This is how you gain new fans.

For Facebook, create a business page and share information while leveraging your real-name connections to call for business as appropriate. If you overdo it, people might find it annoying, but since this is an emergency, I think it's fine to post about it every day.

With Google My Business, you can add delivery and takeout icons, and include URLs to direct people to your e-commerce site. While there are downsides, such as the inclusion of reviews, it is worse for your shop not to appear on the map right now.

And, 9. Repurposing your professional skills. This is a pattern where you convert your cooking skills into photos, text, or videos, or verbalize your cooking skills to perform other types of work.

If you are in the service industry, leverage your communication skills. Sensing the nuances of others, anticipating their needs, and acting ahead of time to please them is a valuable skill. It should be useful online as well.

Since a prolonged situation is unavoidable, it is better to quickly challenge yourself in fields you have never tried before, which will take at least a few months to master.

If you wait until the last minute when things have dragged on until summer, there is a possibility that you will collapse before you can keep your head above water.

Surviving—that is the top priority.

In the worst-case scenario, even if your shop is gone and you are left with debt, please do not die. You can go bankrupt, or you can go on welfare. If you live stubbornly, there is a future.

I am also trying various measures while refining my strategies and tactics for the summer. Let's be flexible, adapt, and survive!

Let's survive no matter what!
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