What Will Navigating 2021 Be Like For Restaurants?

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Surviving 2021.

That's the next big thought on the minds of local restaurants after navigating the economic nightmare of 2020.

So what does the path to a prosperous new year look like for them?

Pradeep Ghimire, co-owner of Cafemandu Flavors of Nepal in Irving, is proud his Nepalese restaurant at least survived 2020.

"It was tough," he said. "It was a roller coaster ride for us. A lot of ups, a lot of downs."

The small eatery, nestled inside a shopping center off N. Belt Line Road, has spent a lot of energy and money on shoring up safety for customers, like PPE for employees, a plexiglass barrier for its cash register, and more to-go containers for take-out.

"We even changed our menu to have more to-go options for the people because a lot of people are not coming out," said Ghimire.

But now the next tricky part is navigating 2021. Cafemandu wants to continue its mission in integrating Nepalese cuisine into mainstream taste buds. Like many restaurants, they are hopeful, yet cautious.

"I'm a little bit worried because it's not totally over yet. But at the same time, I'm a little bit optimistic," Ghimire said.

Last summer, the projections for small restaurants like Cafemandu were grim. The Texas Restaurant Association predicted up to 30% of the tens of thousands of restaurants in the state would close permanently by the end of 2020.

"So we know that through this crisis, nine months now going into 10 months, we’ve lost 10,000 restaurants for good. Estimates now coming in are really showing more of 10,000 to 12,000 because so many are small businesses that simply walked away. They just closed up shop and walked away," said TRA CEO Emily Williams Knight.

She said it could've been worse if not for the recently passed COVID-19 federal relief bill, which will help restaurants navigate the rest of the winter.

"But really what they need more than ever than a stimulus is an increase capacity and for customers to get back out there dining. And I think that’s where the vaccine is going to be such a big part of our ability to recover and see how quickly we can recover," Knight added.

She said one of the most important parts of the relief package for businesses is the Paycheck Protection Program round 2.

“In this new bill in this new PPP, a couple of things have happened. One, forgiveness for those loans under 150,000 has become much easier. I believe it’s a one-page application. So that should give some of our most vulnerable and smallest independent restaurants hope. That they should go talk to their local bank and have that conversation now," said Knight.

She said money should start flowing in the next few weeks because the mechanism has already been established.

And once it comes in, restaurants can actually use that money toward any loans they spent last year on PPE, COVID-19 testing for employees, to-go containers, technology for delivery, and more.

“All of those now are actually eligible expenses for forgiveness," Knight said. “In some cases we’re hearing from some restaurants have spent $10,000 a month and that’s on top of the cost of operating at a 50% capacity in most cases," Knight said.

Knight said the TRA also fought hard for paycheck protection flexibility as a component of the relief bill.

"And that is deductibility of your expenses that you paid in the first round and now the second round," she said. “So as all of our restaurants are doing their taxes, without that being part of it, they would’ve had a massive surprise tax bill, maybe even up to 37%. That’s been in eliminated and now they can actually take those deductions. That’s another big part of this that will be helpful this winter.”

Despite the relief, the TRA said the struggle for restaurants isn’t over because very few are breaking even. There are still 170,000 employees not working in the state of Texas after a peak of 700,000 jobs furloughed or lost during the pandemic.

“We expect the losses to continue in the first half of 2021. It could be another 5% to 10% of restaurants across Texas that will at this point, just run out of runway to operate," said Knight.

That's why the Texas legislative session starting in two weeks is key. The legislature is scheduled to convene on January 12 and adjourn on May 31.

The TRA said it plans to be a big part of that, advocating for small businesses like Cafemandu to survive another year of COVID-19.

"We’ve had so many webinars and individual meetings with our senators, with our congressional leaders -- and I can tell you one thing that gives us great hope, is that there’s not one of them that hasn’t said, 'We can see how hard you’ve been hit. And now it’s our turn to help,'" Knight said.

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