Mei Mei\u2019s is an award-winning, family-owned Chinese American restaurant in Boston. Its proprietor, Irene Li, serves as both chef and owner. She\u2019s a six-time semifinalist of the James Beard Rising Star Chef title and has been a Zagat 30 under 30 winner. In March 2020, she was featured in an Eater.com article talking about the slim margins of the restaurant business. Recently, she began intentionally empowering her staff to understand their roles in shaping the financials of the company, and now wants to get the public involved through the Open Book Open House campaign. In Li\u2019s case, 2019 net income margins were at 1.8% from total revenue of 1.2 million dollars. Restaurant sales accounted for 53.9% of income, while catering sales was at 46.1%.<\/span><\/p>\n While necessary as a public health measure, the adoption of social distancing measures has put downward pressure on both types of revenue at Mei Mei\u2019s. Patrons no longer eat inside restaurants without risking their health and that of staff, and customers do not host large gatherings anymore- so no one seeks catering services. Most businesses of this size have minimal cash reserves and limited access to loans. There is little cash runway stored up for retaining employees and maintaining the real estate in case of sudden downturns. Despite the revenue pressure, alternatives such as reductions of employees may not be palatable given the close-knit nature of the small business establishment. In this tension between lives and livelihoods, Mei Mei has to reimagine its revenue sources and lower its costs if the business and employees are to survive COVID-19 intact.<\/span><\/p>\n Leveraging Existing Capabilities and Processes<\/span><\/em><\/strong><\/p>\n In the days following the COVID-19 outbreak in the US, Mei Mei instituted a raft of changes to ensure the safety of staff while attempting to preserve its topline. In addition to creating a COVID-19 protocol that includes an online mindfulness toolkit for staff, the restaurant leveraged digitization to pivot its business model through a sequence of rapid pilots.<\/span><\/p>\n One of the first revenue-focused pivots was a move to convert its model from selling cooked food to grocery sales. Mei Mei tried to sell groceries out of its store in a bid to \u201cto relieve the pressure off grocery stores\u201d and offer people places where they can shop without standing in long lines. This move repositioned its service within the pre-existing supply chain and also allowed restaurant industry workers affected by the pandemic to access high-quality products from local farms at cost. However, this innovation ran into headwinds from local regulators who said that restaurants did not have the right licenses to sell groceries. Often, the law lags behind innovation. When the authorities stopped restaurants from selling groceries, Mei Mei pivoted to sell toilet paper- something they could do with their existing licenses.\u00a0\u00a0<\/span><\/p>\n New pivots have included the following operational strategies:<\/span><\/p>\n Generalizable Lessons<\/span><\/em><\/strong><\/p>\n COVID-19 has changed the food industry landscape in ways that might be permanent by increasing preference for raw food delivery and takeout.<\/span><\/p>\n While some might argue that the individual strategies above are easy to copy, the combination that leads to success is hard to replicate unless one understands the business context. The restaurant audience that Mei Mei appeals to is hyperlocal and loyal, and carefully cultivated- and that takes time to build. It is unlikely that they will willingly participate in a competitive or substitutive process that undermines Mei Mei in the long run. For small businesses, it\u2019s not just digital innovation but also the doggedness of the entrepreneurial leader that matters. Small business leaders will have to exercise creativity while preserving cash and trying multiple solutions to ensure they retain customer loyalty and cashflow.\u00a0\u00a0<\/span><\/p>\n Sources<\/strong><\/p>\n National Restaurant Association: https:\/\/restaurant.org\/research\/restaurant-statistics\/restaurant-industry-facts-at-a-glance<\/a><\/p>\n https:\/\/restaurant.org\/Downloads\/PDFs\/Research\/SOI\/2020-State-Of-The-Industry-Factbook.pdf<\/a><\/p>\n A way forward for small business: https:\/\/hbr.org\/2020\/04\/a-way-forward-for-small-businesses<\/a><\/p>\n How much to run a restaurant:<\/p>\n https:\/\/www.eater.com\/2020\/3\/9\/21166993\/how-much-to-run-a-restaurant-cost-mei-mei-boston-finances<\/a><\/p>\n Mei Mei blog https:\/\/www.meimeiboston.com\/blog<\/a><\/p>\n How we are handling COVID-19 https:\/\/www.meimeiboston.com\/blog\/2020\/3\/12\/brl0wgd44ghxih1djxcpxp8uyn9p1h<\/a><\/p>\n Dumpling Making Classes at MeiMei\u2019s https:\/\/www.eventbrite.com\/e\/dumpling-making-class-at-mei-mei-tickets-90689387399?aff=erelexpmlt#<\/a><\/p>\n Boston Restaurants Can\u2019t Sell Groceries, According to City Inspectors<\/p>\n https:\/\/boston.eater.com\/2020\/4\/16\/21222216\/boston-restaurants-groceries-city-inspectors<\/a><\/p>\n Dumpling Sign Up: https:\/\/www.meimeiboston.com\/virtual-dumpling-classes\/#prepinstructions<\/a><\/p>\n Keep Calm\u2014and Carry Out? Boston Restaurants Struggle for Support amid Coronavirus Crisis<\/p>\n https:\/\/www.bostonmagazine.com\/restaurants\/2020\/03\/13\/restaurants-business-coronavirus\/<\/a><\/p>\n Boston\u2019s Best Takeout and Delivery During the Coronavirus Shutdown: https:\/\/www.thefoodlens.com\/boston\/sides\/covid-19\/bostons-best-takeout-and-delivery-for-social-distancing-during-the-coronavirus\/<\/a><\/p>\n Restaurant Business Model Changes in a Post COVID-19 World<\/p>\n![\"\"](\"https:\/\/d3.harvard.edu\/platform-digit\/wp-content\/uploads\/sites\/2\/2020\/04\/Mei-Mei-Mindfulness.png\")
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