How Adam Moon Increased Revenue by 70% During a Pandemic
As the fallout from COVID-19 rocks the restaurant and hospitality industry, business owners search for ways to keep their doors open and improve profitability. But, what about entrepreneurs who heavily invested just before the economy turned upside down? For Adam Moon, the solution was to expand his current business while pursuing virtual restaurant opportunities.
Before the pandemic, Adam used his experience as a self-taught chef, professional caterer, and expert in fast casual concepts to turn his restaurant into a beloved community space offering catering, delivery, and two satellite locations. However, in 2019 the landlord for his Wilshire Boulevard restaurant in Beverly Hills decided not to renew Adam’s lease. Instead, the landlord aimed to build an ultra-modern office building.
Adam says, “I had been operating in that same spot for over a decade and had built a strong following of regular customers from the nearby offices. Where would I go from here? How could I keep my business intact and relocate it at the same time?”
Still, relocating and expanding his business wasn’t the only challenge he’d face in less than a year. Shortly after making a move, Adam found himself amid ongoing turmoil and a sharp decrease in revenue. Although many entrepreneurs may put their head down, keep doing what they were doing, scale back their plans, or even close their doors, Adam dug in to innovate his way to profitability during a pandemic.
Challenge #1: Build a new restaurant while operating his existing business
Over the last decade, Adam nurtured his Beverly Hills restaurant and supported the local community. So he wasn’t thrilled to lose his cherished spot. Yet, Adam acknowledges that the building’s footprint limited his expansion opportunities. He saw the move as a way to grow his business in exciting ways. At the same time, Adam wanted to keep his customer base intact and maintain his staff while relocating. First, he needed a promising new location. Next, Adam required a plan for a seamless transition.
Solve the location issue using a detailed strategy
Adam knew he needed a commercial space near his original restaurant. Staying in a similar location meant he could retain as much of his delivery and catering business as possible. Unfortunately, there were no vacant buildings to lease within a few blocks of his current restaurant. However, he discovered a 2,643 square foot building in a prime location. But, the price tag of $3.4 million wasn’t feasible without external funding. Plus, the commercial structure required construction and remodeling to get it restaurant-ready.
Adam turned to the Small Business Association (SBA) for a solution. After exploring his options, he settled on an SBA 7(a) loan. The application process was time-consuming and required many documents, including:
- Personal background and financial statements
- Profit and loss statement
- Projected financial statements
- Individual and business tax returns
- Business overview and history reports
Once he was approved, it was time to develop a strategy that incorporated an efficient budget and timeframe. After all, simultaneously operating a restaurant while building out a new one requires meticulous planning. His main goals were to reduce downtime and keep his staff employed.
Build-out a fast casual restaurant from a shell
When building a restaurant, many things happen at the same time. Each decision must reflect existing regulations and account for long term needs, while owners juggle the human-aspect of overseeing suppliers, contractors, and never-ending appointments. Adam offers a glimpse into his remodeling and transition strategy with an example template of his planning process:
- Adhere to plumbing, electrical, and mechanical codes.
- Understand expectations for construction and safety inspections.
- Select materials and equipment to meet fire department inspections.
- Ensure that structural elements provide four-hour fire-rated protection.
- Calculate the CFM for commercial hood installation.
- Purchase and install a walk-in cooler and freezer.
- Navigate health department inspections.
- Verify construction and remodeling work complies with ADA compliance and passes CASp inspections.
- Select, buy, and install a grease interceptor.
- Oversee the security system setup.
- Choose quality components, like cameras, alarms, and DVR recording systems.
- Manage IT networking.
- Schedule installation of fiber and cable internet with WiFi.
- Install and connect the point of sale system and printers.
- Decide on phone service and schedule installation.
Challenge #2: Turn a profit when the bottom fell out
In the final months of 2019, Adam finished his massive construction project and shifted operations to the new location. As with any restaurant move or rebranding, Adam had to invest resources into marketing. However, only a few months after his grand opening, he faced an unprecedented obstacle: A pandemic, economic shutdown, and civil unrest resulting in the loss of dine-in and catering business for restaurants.
Adam reports that the impact was severe, “My sales plummeted 60% within the first week of the shutdown.” Although easy isn’t exactly the word Adam would use to describe these experiences, it was eye-opening. And through his dedication, he solved these challenges and managed to turn a profit during one of the toughest economies ever.
Overcome pandemic losses with innovation and resourcefulness
Only five months after relocating to a new space complete with a hefty mortgage payment and nearly double the operating expenses, the pandemic hit. Sales drastically dropped, leaving Adam asking, “How do I recover from this and not only cover my expenses but also find profitability?”
First, Adam turned to his experience of launching a virtual restaurant in 2019. He already had the groundwork laid out and understood some of the nuances. He says, “To pivot my business and make up for the lack of dine-in and catering sales, I decided to double up on deliveries and takeout by duplicating my storefront virtually.”
Next, Adam scoured his options to locate “every single resource available on the city, county, state, and federal levels. I was able to gather just enough funding to hire back my furloughed staff and turn my kitchen into a food factory.”
Take an innovative approach to ensure profitability
Adam researched funding options, like an SBA Community Advantage loan, Economic Injury Disaster Loan (EIDL), and Paycheck Protection Program (PPP) funds. Then he focused on expansion.
His revenue-generating plan included the use of virtual restaurants, also called ghost restaurants or cloud kitchens. To achieve success, Adam needed branding, marketing, and seamless online ordering strategies. To stay on track, he developed a series of frameworks.
Virtual restaurant planning
Although a virtual kitchen doesn’t necessarily require a second location, food entrepreneurs must ensure business growth while not cannibalizing existing operations. To do this, each ghost restaurant needs its own brand, menu, and price controls. Adam followed a checklist to ensure consistency at each touchpoint:
- Create a virtual brand.
- Select a captivating brand name.
- Structure and design a menu.
- Develop menu pricing.
- Control the restaurant’s inputs and outputs.
- Optimize existing ingredients, staff, and facilities.
- Choose menu items that don’t require new inventory.
- Train staff to handle virtual restaurant job duties.
- Rework the space to guarantee fast and accurate order creation and delivery.
- Devise a virtual restaurant marketing strategy.
- Use in-app promos, loyalty programs, and sponsored ads.
- Perform keyword research on delivery apps.
Ghost kitchen marketing blueprints
Adam also developed plans for promoting his current restaurant and new virtual kitchens. Doing so required him to gain skills in several key areas, like:
- Search engine optimization (SEO)
- Website design and management
- Online store creation and optimization
- Merchandise creation, drop-shipping, and eCommerce
- Restaurant guest loyalty programs
- Virtual restaurant gift cards
- Advertising through pay per click (PPC) campaigns and targeted ads
- Ad distribution methods for print, email, and text
Online ordering and delivery strategies
Successful virtual restaurants rely on robust delivery and online ordering options. Adam explored the delivery as a service business model and third-party management. He looked for the right combination of delivery apps and catering partners. His research turned up options such as:
- EZ Cater
- Office Express
- GrubHub for Work
The result: 22 Virtual brands launched during the COVID-19 pandemic
Adam’s meticulous planning helped him launch 22 (and counting) virtual brands during the ongoing pandemic while realizing a gain of 70% gross revenue year over year. His recession-proof business model means he’ll soon expand into the second half of his commercial property and launch 40 more ghost kitchens before the year’s end.
Want to skyrocket your profits this year?
Building a restaurant or ghost kitchen from the ground up is time-consuming. However, with the right plan, you can double your profits. Explore your options and boost profitability by scheduling a call with Adam.
Adam is a self-taught chef, experienced caterer, and a veteran in fast casual concepts. During his 14 years in the food and beverage industry, he’s opened several restaurants throughout Los Angeles and is currently trail-blazing the virtual restaurant movement sprouting up across the country. Adam launched over 22 brands already during the COVID-19 pandemic alone and found a way to reach profitability in an unprecedented time when most restaurants and small businesses are struggling. He has another 40 virtual restaurants in the works. He hopes to share this experience with other business owners, so they too can survive this difficult moment in history.
Adam is a member of the Beverly Hills Chamber of Commerce and an Eagle Scout. He is highly involved with the community as a corporate sponsor to the local schools and youth sports programs.