COVID-19, Restaurants, and Bankruptcy
One of the businesses hit the hardest during the COVID-19 pandemic is the restaurant industry. Most restaurants in the United States make most of their income through dine-in business. Because restaurants were not deemed essential according to the federal government, many restaurant owners had to furlough or fire their employees since they had to shutter their doors. Even without a global pandemic, restaurants have been always more susceptible to increased failure rates. Now this global pandemic has wiped out the income of thousands of restaurants throughout the United States.
Many restaurants had to close permanently following natural disasters. In other cases, catastrophes often result in restaurants declaring bankruptcy fees. There are many ways to attempt to avoid declaring bankruptcy as a restaurant owner.
- Determine why your restaurant has poor performance. Is it only due to the global pandemic, or were there issues prior to COVID-19?
- Have you received proper financial training to run a business, not just cook excellent dishes? Restaurant owners have to wear many hats, including having a solid understanding of how to run a business.
- Have you conducted a feasibility study? This type of study makes sure that a restaurant in a particular location is viable prior to opening.
- Did you consult with experts in your industry regarding public relations, taxation, food and beverage laws, accounting, and all other areas of a restaurant business?
- Did you acquire enough capital prior to opening your restaurant? In many cases, restaurants simply do not have enough capital to succeed.
- Did you hire an educated and trained staff? Many times a restaurant is only as good as its employees. Communicating exactly what you need as a business owner to your employees can help ensure that everyone is on the same path to success.
Bankruptcy and COVID-19
Unfortunately, the global pandemic has caused several restaurants to make the difficult decision to declare bankruptcy. However, bankruptcy does not mean the end of a restaurant dream. A Subchapter V reorganization or a traditional Chapter 11 bankruptcy may provide the business with the lifeline it seems to survive these trying times.
Reach Out to Today for Help
Restaurant owners must be able to not only make delicious meals, they must excel at marketing, financial planning, and have an exceptional business strategy. Unfortunately, the Coronavirus pandemic has derailed many successful restaurant owners. If you are considering bankruptcy as a restaurant owner, visit with an experienced West Palm Beach bankruptcy attorney at Kelley, Fulton & Kaplan at 561-264-6850 today for a free consultation and to help you understand what your legal options are for you and your business during this difficult economic time in our nation’s history.