As news continually swirls around the impact of the Coronavirus, there are many unknowns for citizens, businesses, and organizations of all kinds. The distancing goes against human nature and against the foundation of which many businesses operate.  Shared work space, manufacturing facilities, entertainment venues like bars and restaurants, even running errands… The virus has affected people around the world and it appears that it will continue to do so for the foreseeable future.

In many states, restaurants and bars will be closing.  This is to avoid large groups of people becoming exposed.  This approach is twofold. With fewer people in one location, there is a lower chance that someone in that room has the virus.  Secondly, it somewhat mitigates the impact of an infection if someone were to have the virus.  The number of those exposed can be limited to say, 10 individuals, rather than hundreds or thousands.

Restaurants are a gathering place which is a foundation of their existence. Whether patrons avoid restaurants on their own to avoid exposure or the restaurants are closed by the government, the implications are the same.  Revenues at sit-in restaurants will take a nose-dive.  If they are able to remain open, personnel costs will most likely exceed gross revenue so many restaurants will operate at a loss, if they are allowed to remain open. If they are ordered to be closed, or close on their own accord, they can reduce some of the loss by avoiding personnel costs but are still ultimately losing money.

There are no real winners in this scenario but those who can operate during this crisis while minimizing the potential for exposure are far more likely to do well.  Take out, drive through, delivery…They will draw customers from sit-in establishments that are either a risk to their health or they are closed.

There are many variables that dictate exactly the depth and breadth of this crisis on the restaurant industry. Some factors are acceleration or deceleration of the infection rate, consumer perceptions and behavior, and obviously time is a large factor, something that restaurants running on tight margins may not have a lot of. Liquidity within the industry will determine which restaurants will be able to stomach the ballooning losses and which will not.  For those not positioned well for this type of event, it is likely that there will be some closures and potentially a cycle of consolidation within the industry. Figuratively, it is a test of who can hold their breath the longest and surface when the threat has subsided.

Due to the relatively long incubation period of the Coronavirus, the best you can do is to take measures to avoid it at all cost. You can carry it for as long as 10 days with no symptoms, or carry it without knowing it at all!  Feeling good is no indication of the short-term infectious nature of this virus so be cognizant of the high-risk environments and implement a system to be sure you are routinely sterilizing all primary and secondary points of contact with others.