12 Jul Ten things to do when times are tough

Given the current global events and economic difficulties that have presented themselves, it may be helpful to outline some key issues for consideration in the coming year, prioritised to ensure the survival and ongoing success of your business. Here are the areas worthy of attention:

Enhance selling and merchandising skills

To offset a decrease in trade, it is important to increase the average spend of your existing customer base. Invest in training and improving the selling and merchandising abilities of your front-of-house staff. Move away from passive attitudes toward selling and foster a sales culture within your team. This transformation requires time, effort, and strong management support.

Target customers with bulk business potential

Given limited marketing budgets, concentrate on attracting customers who have the potential to bring substantial business volume. Instead of relying solely on traditional advertising methods, find effective ways to identify and engage decision-makers who can significantly impact your business. A targeted approach is often more cost-effective and yields better results.

Review supplier relationships

In times of hardship, there may be opportunities to renegotiate existing supplier contracts or explore alternative options. While maintaining good relationships is important, it is also essential to ensure that you are receiving the best possible deals and terms. Be proactive in seeking new suppliers and secure contingency plans to ensure continuity of supply for critical items.

Evaluate staff performance

During times of reduced sales, it becomes imperative to prioritise efficient wage cost control. Loyalty and sentiment should not outweigh productivity and commitment to your business. Assess the performance of your staff and identify individuals who aren’t highly productive or adaptable to change. Simultaneously, it’s essential to reward, recognise and retain employees who bring value and contribute to the success of your business.

Review pricing strategies

In challenging economic times, it is crucial to understand that consumers tend to move toward more affordable options. Analyse your current menus, wine lists, and function packages to determine if you can lower prices without sacrificing profit margins. Focus on delivering a perception of value for money while ensuring profitability in a highly competitive market.

Reevaluate your business concept and systems

Examine your business model and operational systems critically. Are there areas where costs can be reduced or efficiency improved? Challenge traditional approaches and embrace new ideas. Be open-minded and willing to accept fundamental changes, even if they disrupt the established way of doing things. In a difficult economy, innovation and efficiency are vital for survival.

Negotiate rent reductions

Although you may have a long-term lease agreement, it is worth exploring the possibility of renegotiating contracts and leases with landlords. In a challenging economy, landlords may be more inclined to accommodate such requests to avoid having vacant premises. Gather relevant facts and evidence to support your case and approach the negotiation process prepared.

Eliminate unprofitable customers

Evaluate your customer base and identify any customers or function groups that are financially marginal or no longer align with your business goals. It may be necessary to let go of certain customers or events that consume resources without providing sufficient returns.

Explore financial support options in advance

In anticipation of ongoing challenges, explore potential sources of financial support before you find yourself in a desperate situation. Establish relationships with banks and financial institutions and assess the feasibility of obtaining additional funding if needed. Don’t assume that your existing status as a good customer guarantees easy access to future funds.

Recognise when it’s time to exit

If your business is spiraling downward and the situation seems irreparable, be proactive in making difficult decisions. Sometimes, the smartest move is to pull the pin and cut your losses.