Closing pubs are leaving a void in our communities, our high streets and in our economy. Hospitality has always been a difficult sector to navigate for small businesses, sensitive to shifts in political policy and consumer confidence, as seen recently with rising business rates and Brexit implications.
There's a sense amongst publicans that the situation is likely to get more difficult in the coming months. Banks being less willing to lend teemed with wage inflation, rising food costs and skills shortages are enough to furrow the brow of even the sternest business owner. And yet, some small adjustments may be enough to limit any potential damage, allowing you to weather the storm for a more profitable tomorrow.
Protect your cash flow
Poor cash flow management is repeatedly cited as the number one cause of business failure. Even profitable businesses can face bankruptcy if they don’t have cash in the bank when they need it. Here are some things you can do to safeguard your cash flow;
- Lease and finance options:
Diversify your business
Businesses must evolve or die, and it’s early adopters who often prosper. Times have changed and people's expectations are higher than ever before. Look for ways to invite a broad spectrum of people into your business and encourage them to spend more while they’re there.
- Open early ‘til late: Rates and rents don’t pause when your premises is closed so why not make the most of potential daytime trade. Embrace a growing trend of cafe culture with your hot drinks offering, or run promotions welcoming parents and OAP’s into your business during the slower daytime hours. If you’ve got spare space why not offer it to the local networking group or book club?
- Premium drinks offering: Gin and craft ales have seen a huge revival in popularity in recent years, as have artisan soft drinks thanks to increasing number of adults choosing to abstain from alcohol. Whether its a trend or not, these drinks have a higher perceived value among your customers meaning they’re willing to pay more.
- Casual dining: The casual dining sector has taken a hit in recent months with some huge chains going under, and yet the NPD group predicts the eating out sector will continue to grow by 83m visits by 2019. If you have kitchen facilities take the opportunity to embrace this growth, bearing in mind the ethically minded and health-conscious consumers prepared to pay for fresh, locally sourced food.
Be people focused
The definition of ‘hospitality’ is “the friendly and generous reception and entertainment of guests, visitors, or strangers.” People should be at the heart of your business, your customers, your staff and yourself.
- Invest in your staff: Your staff are your biggest expense, but also your biggest asset. The hospitality industry is notorious for staff turnover and this can cause a real headache for managers looking to provide customers with a quality and consistent service. Investing in training, offering a fair wage and professional development opportunities encourages a high level of employee engagement. Engaged employees are stakeholders in your business. They work harder for a shared cause and because of this, are reluctant to leave you high and dry!
- Appreciate your customers: The Marketing Tech Blog reports that loyal customers can be worth up to ten times as much as their first purchase. Rewarding loyalty with targeted discounts or promotions incentivises customers to come back. Set up a loyalty scheme, build an email marketing list or simply respond with a thank you to positive online reviews.
- Look after yourself: Being your own boss is one of the most liberating and stressful ambitions a person could pursue. There will never be enough hours in the day and there is no off switch so if you’re not careful the daily grind can become all consuming and you’ll lose sight of the bigger picture. Attempt a healthy work-life balance with a view to gaining a valuable perspective that will help your business grow. Delegate to your staff and make use of mobile working so you're not tied to your premises.
Challenging times often serve to stoke entrepreneurial spirit and there’s no doubt that there are some tough times ahead, particularly for those working within the hospitality sector.
The pub is a British institution, as are our small business owners famed for being resourceful and resilient. Identifying pain points, using technology to streamline your business and improving customer satisfaction will all work to safeguard the future of you business.