Working in hospitality, it can be hard to be an optimist following covid, staff shortages, and inflation at an eyewatering 8.7% as of May 2023. Last year was record-breaking for restaurant insolvencies with 1,880 restaurants going under.
But it’s not all doom and gloom for the hospitality sector. There’s plenty that small business owners can do right now to take control. Acting quickly is key to ensure you can ride out the incoming storm. When making the right decision can feel overwhelming, don’t let inaction be the course of action!
Below we discuss what you can do now to make a real change.
Kill your darlings!
Well don’t… but in the current climate, your clients face some incredibly difficult choices. Hanging on to passion projects that seemed possible or a good idea a few years ago may not be on the cards anymore.
We’re in survival mode right now. Redecorating the bar may have to wait.
The same should be said for work habits. Difficult times allow us to reflect on our practices to see how we can become more efficient.
Just because something has always been done the same way for as long as you can remember, doesn’t mean that it is the most efficient way of getting the job done. Time to take the opportunity to take stock and ditch any bad habits.
Changing up the technology you use, for example, could save you time and money in the longer term.
Get to grips with your cash (even if it scares you)
Let’s look at what some hospitality figures, have said: “All we can do is remain optimistic and hope it isn’t as bad as predicted.” Please don’t think like this! While many things are more or less out of our hands, such as VAT, inflation and the weather, there’s so much we can do right now.
Knowledge is power. Sitting down and getting to grips with your cash flow is a sure way to ensure you feel confident making decisions about the future of your company.
Throughout the year, you will experience peaks and troughs. Perhaps an Indian summer means your beer garden is packed in September. The winter World Cup may have brought everyone in to watch the beautiful game on your new screens. Or maybe New Year’s Eve reservations and Christmas parties have booked out your hotel rooms throughout December. Whatever seasonal events may affect your business, you need to understand these ebbs and flows to build a cash reserve for when you need it most.
Some business owners are turning to AI to identify these trends. However, AI technology depends on repeating data and trends from previous years. For a surer way to understand your cash flow forecast, consider prediction technology. Let thousands of algorithms process your financial data to give a more accurate prediction of the future.
Using Futrli gives you a better picture of your cash flow by letting you know exactly when VAT payments will be coming out of the bank, what bills are due and when to chase pesky late invoices! It saves you time as it connects to your ledger in Sage, Xero or QuickBooks Online and provides an entire business forecast for the next three years!
Rethink your costs and pricing
No matter how well you understand your cash flow you still have to face the reality that bills and rent have gone up and your customers have less money in their pockets to spend at your business.
Hospitality Ulster Chief Exec, Colin Neil has summed it up best: “It’s the scale. No one has seen energy costs treble. And at the same time, our consumer spending power, wiped out.”
You are going to have to make tough decisions about your pricing and where to cut costs. Your menu may need to change, function room rental prices may need to go up, and it may be worth changing the hours you trade.
Pricing services is something that many business owners struggle with. We get it. You’re great at giving the best hospitality. Understanding how to price the food and drink you sell is always a challenge. Drive prices up too much and your bedrock of loyal customers may turn away, but keeping prices the same may put you out of business. Finding the balance between these two extremes is integral to your survival as a business.
Using Futrli helps you run your own scenarios to see what pricing models the best for you could be. Want to see how your margins will change by putting five pence more on a pint, go for it.
Having all your business information in one place through Futrli will help you see all your income streams in one place alongside a breakdown of recent and upcoming trends. Futrli tells you where to focus your efforts, what the most lucrative areas of your business are and how to maximise these areas.
Using prediction technology will help put you back in control of your business. See for yourself. Start a free trial with Futrli and see how quickly we can help your business.
Read plenty more tips here.