Resourcefulness needed to manage costs during the credit squeeze
A survey of the British Hospitality Association's (BHA) National Restaurants Group, whose members together operate 1,200 units nationwide, has confirmed that banks' attitudes to current and prospective lending have hardened in the past 12 months.
With cash so hard to come by, wise operators are doing all they can to raise margins, do business efficiently and guard against squandering their liquid assets. This month's instalment of our Best for Business series, starting on page 22, details the steps our six featured businesses are taking in order to trade through the recession. Each case study offers real, practical advice on managing costs and debt-free reinvestment in your product.
At Isle of Wight pub the Taverners, owners Roger Serjent and Lisa Choi are being careful to self-fund refurbishments, rather than finding themselves in hock to a lender. And, having identified a gap in the market, they are considering rolling out a home-cooked food service for self-catering holiday-makers on the island.
Dom Wood, proprietor of the Bristol bar WildWood, is similarly reluctant to take an overdraft, preferring to monitor carefully his cash flow and transactions and offer an appealing, yet low-cost, menu. Wood is also accessing precious publicity by harnessing free online marketing resources such as Twitter.
Meanwhile, the mantra at the Tudor Farmhouse in Gloucestershire is, "if we don't earn it, we don't spend it", meaning that planned improvements to the hotel will be funded purely by profit. And owners Hari and Colin Fell are acting on advice from business mentor Robin Hutson on controlling food costs and improving average room rates and drinks margins.
The BHA's research listed availability of finance and reduction in consumer spending as the top two inhibitors to future growth. Our Best for Business series is proving that resourcefulness, assiduous cost management and a little help from sponsors and mentors can help operators weather the ongoing economic storm.
By Mark Lewis
