It’s undoubtedly been a difficult time for many within catering and foodservice.With the combination of Brexit, COVID-19 and pinches to the economy, it’s no wonder many are looking to diversify or change to stay afloat. Rick Smith, MD of Forbes Burton (www.forbesburton.com), a business advisory firm specialising in insolvency, suggests how businesses can make the most of their situation.
It’s often the small changes that make the most amount of difference. If firms within catering and food are concerned with the state of their business, they should take steps to remedy this as soon as possible. For example, taking a look at your current strategy could work wonders. Is there anything that could be changed easily? It’s best to make a point of this, speak to professionals who may be able to identify weak areas and help strengthen your offering as well as your finances.
Restrictions have taken over the past few years, with many in the catering industry suffering from a lack of live events, cancelled plans and a general recruitment problem that is yet to be solved. All these things can compound to make what is usually a lucrative, seasonal business a success into an unstable, fraught experience.
If you don’t have a business plan to hand, then make sure you review or create one. Are there any areas of your business where costs could be cut? Could you plan for different scenarios of problems and how they can be overcome?
If you are struggling to find areas to save cost, looking at your suppliers could be a great start too. Just because you’ve been with the same one for 10 years and they’ve always been good doesn’t mean you have to stick with them forever. Do the research on any new suppliers beforehand though, reliability and fulfilment needs to be balanced with cost. An unreliable supplier can ruin your business, especially in a time where supply chains have been weakened overall.
You should also look at your marketing plan – has your niche market changed? Are you still using the right messaging and communications channels? Marketing shouldn’t be the first thing that gets cut when looking to save money, but making sure you are on the right platforms for your audience is essential. Otherwise you risk shouting into a void where nobody is engaged. Follow where trends dictate and learn to regroup and reuse content to get the maximum value from your marketing.
Cash-flow is a common problem within catering, from clients not paying on time to the rise in material costs and labour making their mark felt in a very real way. It should be an area that is closely watched. Quick fixes such as short-term cash injections may help, but is it just kicking the can further down the road if the business is actually no longer viable? It may seem obvious, but borrowed money has to be repaid.That piece of equipment you are thinking of purchasing might make you money in the long run, but what does it mean for your short-term cash flow? Could such a purchase cost you more than you think?
It’s always a good idea to take the time to negotiate too, there’s a real chance you might be able to talk to suppliers or clients to review terms or arrange payment structures. Could you arrange a retainer structure for fair use of materials or equipment? The possibilities are endless.
Whatever you do, there is always room for improvement and specialists out there to help. Burying your head in the sand is simply not an option.