Last year saw tough times fall on a majority of the UK’s restaurants and with the forecast for the next 12 months set to be worse, owners need to recognise the challenges they could face in 2009 and make the change for good across their businesses.
Points to take into consideration:
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Prepare dishes made from seasonal, less expensive ingredients, replacing expensive menu offers with more regular changes - This will help to boost food margins (the ratio of food costs against food sales) and working capital, and to lower the cost of dishes, keeping customers happy and ensuring they come back again.
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The same principle should be applied to wine sales – wine lists should have plenty of choice and provide cheaper bins and separate ‘by the glass’ or half bottle options - remember the sale of one glass of wine is better than no sale at all and if restaurants don’t provide these options, the customer just might forego the cost of a whole bottle if their budgets are pinched.
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Overstaffing in restaurants will be a challenge over the coming year and in these tricky times, tightening up of front-of-house training is imperative. Restaurants will see fewer bookings this year and owners will need to do everything they can to make their restaurant first choice in the customer’s mind. Rude or apathetic staff and poor service will eventually take their toll. One solution is to prune staff in line with sales to protect the restaurant and the good staff working there.
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Taking a good look at overheads and questioning all outgoings will also make invaluable savings.
Working capital will potentially come under threat in the coming months as suppliers demand payment and cash flow dries up and banks become more reluctant to lend.
Nick Battersby of The Financial Solution offers the following advice:
- Consider renegotiating credit terms to give yourself a bit of breathing space
- Remember that in these times lending institutions are feeling very nervous and restaurants will find their figures will be scrutinised closely over the coming 12 months. Accurate, up to date book-keeping and full management accounts produced by the middle of the following month will give owners some room to react to adverse numbers early and – above all - show lenders that these disciplines are important to their business.
- Find alternative funding sources
The Financial Solution are offering an alternative to conventional lending which is proving to be beneficial within the hospitality industry.
The Business Cash Advance has helped restaurant owners across the country to fund refurbishment, the purchasing of equipment, the purchasing of bulk stock, and has even been used to pay off VAT bills.
APPLY ONLINE FOR THE BUSINESS CASH ADVANCE
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