“We were better closed that open” – Nov 2020
November 2020:
None of Baa Bar’s venues have reopened at full capacity since March 2020.
Since then, there have been partial re-openings during the summer, followed by significant mixing restrictions, the lockdown in November, the introduction of the Tier system, and another lockdown in January 2021.
“By opening the doors, you’re paying your rent, you’re paying your bills, you’re paying your staff,” Elaine explained. “But what’s going out is not coming in. You’re taking your extra distancing measures, you’ve got fewer seats and you’ve got to do your cleaning more, all to make it a safe environment – that costs money.”
“We were better closed than open, but then saying ‘better’ doesn’t mean ‘better’, it just means not as worse off.”
“Everyone has a break even,” Elaine went on. “Say [before coronavirus], for example, you take £10,000 net sales, your business will probably have to take £9,000 and you make £1,000. But now you’re probably spending £11,000 to bring in £8,000 – the figures just don’t stack up.”
Elaine added that the Tier system introduced by the government makes it harder for the company to work towards a break even.
“These restrictions are just reducing your footfall,” she said of the situations. “If you’ve got a business and you’re paying rent, but you’re only making half the footfall, you’re not going to make money.”
“It was costing us £8,000 a month on one site to keep the doors closed, but then when we had the doors open during one of the Tiers, we were losing £14,000 a month – it just swings all the time.”
However, Elaine recognised the need to keep trying.
“It’s a bit of a vicious circle,” she explained. “You have to try, because if you don’t try, you’re still building the debt, and by having [the premises] open you can at least start paying some of your bills off and generate some cash coming through the door.”
When we first caught up with Elanie in November, it had just been announced that Liverpool would be going into Tier 2 at the end of the second lockdown, which meant further changes for Baa Bar.
“Our food outlets we will be opening, but we’re keeping everything to a minimum in our kitchens, so we’re bringing some staff in but keeping the rest on furlough,” Elaine went on. “If you overstaff it, you’ll just be worse off, so we’re keeping it really tight.”
She admitted that it would be a tricky balancing act to ensure that they reopened the food outlets in the Baa Bar group in an effective way, but she was determined to try.
“It’s a no-win situation, but if you don’t open, you’re never going to know whether things will get better.”
“It’s hard to adapt your business with two days’ notice” - Dec 2020
December 2020:
In the build up to Christmas, the company was able to open two of the restaurant-based venues with significant restrictions.
Although Elaine reported that they had enjoyed some successful Saturday takings, mid-week business was still low and the uncertainty of what would happen in the next few weeks made it hard to plan ahead.
“It’s very hard to adapt your business with two days’ notice of whether you’re staying open or closing again,” she said. “We have people who are relying on the extra money. And then we have customers coming to the venue, and then suppliers, and fridges and pumps full of drink and food.”
“If you’re closed, at least you know you’re closed, and you can try and tighten everything,” Elaine went on, “But this sort of in-between just doesn’t work because you put so much energy into something with no return.”
“I don’t want to close, but the half dipping your toe just doesn’t work.”
“Our burn rate is thousands and thousands a week” - Jan 2021
January 2021:
When the third national lockdown was announced, plans to reopen Baa Bar’s numerous venues were stalled once again.
With no cash flow into the business, Elaine admitted that the company was financially struggling like never before. In a recent attempt to save money, she had made further deals with her property’s various landlords, but these would only last until March.
“There’s a lot of funding out there, but it’s not necessarily for hospitality,” Elaine said. “I don’t know what’s around the corner – the future’s looking bleak for hospitality.”
Despite the uncertain outlook, Elaine reported that she and her management team were still drawing up plans for how the business would look when it reopened, and what they could do to bring customers in.
“If we do get through this, we’ll be hanging on a thread,” Elaine reported. “Our burn rate is thousands and thousands a week and there’s a huge debt build up, so it’s all about getting cash flow ahead.”
Elaine recognised that the business would be different when it reopened, with many processes and aspects of day-to-day running altered in the wake of the pandemic.
“We’ll definitely have to open on a different cost basis,” she said.
“We’ll maybe try and cut our costs through the way we purchase our stock,” she went on. “We usually do our deals once a year, but we’re probably going to have to keep looking all the time – which can be quite exciting.”
In terms of the venues themselves, Elaine reported that she and her team had plenty of ideas, but that their excitement was tinged by the ongoing uncertainty.
“We have ideas about our product, which I’m quite excited for,” she explained. “But we did a lot of ideas before New Year and then we had one day’s notice [that we couldn’t open], which was horrifying when you’ve got all the chefs in, cooking, preparing.”
“It is a bit worrying how far you go with all your marketing and spend, so a lot of it has got to be creative without spending any money.”
“I’m sure it’s going to be party time for everybody” - March 2021
March 2021:
After months of closures and only a brief respite during the summer period, the government roadmap signalled the partial return of the business on 12 April.
With restrictions still largely in place, only one premise could reopen under the new legislation – Modo in Liverpool.
“We’re trying to come up with ideas for what’s going to make us better and different from last time,” Elaine said, “But the main aim is to just get it open – it’s been dragging now.”
Equipped with a permanent outdoor structure, the premises in Liverpool features significant seating space, awnings and external heating, all of which Elaine hoped to capitalise on during the colder, unpredictable weather of early spring.
Although other premises within the business’ repertoire also have outdoor space, they were not as equipped as Modo. Elaine explained that she didn’t want to invest in outdoor equipment for these other locations with the summer months coming and a further easing of restrictions planned in May and June.
In order to make the reopening a success, Elaine and the team were looking carefully at how they could optimise their procedures.
“It’s just about making things more efficient with staff and training them better,” she explained.
“We’ll be making the service faster by using an order-at-table app. It decreases service time because the customer can just order themselves [and the server just brings it over].”
Elaine said that the key was to generate income, but that the strategy would be different during these reopening phases than before the pandemic.
“Last time it was more about volume, but with [the reopening], customers will come but only a certain amount of them can come so it’s about making sure everything’s in place [for upselling],” Elaine added.
Although the business was going to be busy, Elaine said that the team had made the decision to only book the first sittings, so that they wouldn’t have to remind people to leave when their reservation expired. In this new format, upselling would be key to generating further cash flow.
She also pointed out that there would be an increased appetite and enthusiasm for going out which would benefit the business.
“Before, we might have been quiet Sunday, Monday, Tuesday, but we’re expecting Sunday, Monday, Tuesday to be buoyant, so there’ll be a lot of consistent business throughout,” Elaine explained.
Elaine and the management team had already made the decision that they wouldn’t be increasing prices for the reopening phase of the business.
“We’re keeping our prices the same,” she added.
“I’m not a person who likes to profiteer because our overall product and service isn’t really going to be any different – it’ll be more polished, but our product is our product.”
She went on to add that the priority was streamlining where possible, cutting costs internally instead of raising prices for the customer.
“We’re going through the products, getting rid of the stuff that doesn’t sell, the non-movers, the low gross profit products,” Elaine explained.
“We’re just consolidating and tidying things up,” she added.
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