The hospitality industry, and the casual dining market in particular, is undergoing a challenging period leaving many people to wonder whether there’s any room left for growth.
First Byron, then Jamie’s Italian announced financial difficulties. Strada, Prezzo and Square Pie followed suit to say they’re closing restaurants throughout the UK. Research carried out by Ignite Economic confirms the uncertainty of the sector and suggests that its workforce could start falling by 2021 unless the government steps in to help.
Although further business casualties keep popping up on our newsfeeds, the outlook for the hospitality industry is not entirely bleak. Let’s take the growth rate of the foodservice and catering sectors as an example, which is far from slowing down. According to The British Hospitality Association, it has in fact doubled in size in the past two decades.
The hospitality industry is diverse and dynamic, and small businesses that have just gained a foothold in the market have every chance of succeeding, provided they have a sound business strategy in place. As an owner of a small restaurant, here are three growth opportunities you can consider:
1. Think digital
Rent is on the rise, especially in London. This makes setting up a new restaurant a costly endeavour. If you’re after a wider market, why not think of alternative means of expanding? Customers are increasingly turning to online shopping, and that doesn’t change come meal-time. Food delivery is a growth driver for restaurants and you may want to consider offering off-site eating options for a new revenue stream. It’s never been easier to get your restaurant online with delivery services like Just Eat, Deliveroo and UberEATS. And, by tracking online orders, you can collect valuable data about your customer’s preferences and design special offers tailored to their needs.
2. Put your customers first
This takes us to our next point, customer satisfaction. Build strong ties with your customer base, cherish your regular guests and make yourself accessible to their feedback, not just in your restaurant but through an online presence as well. Keep honing customer data to stay on top of what your patrons want. Try to introduce personalisation into your marketing strategy and consider offering loyalty programmes, discounts and partnering with Groupon. Explore what makes your customers happy, what makes you stand out in their eyes and keep that as an integral part of your business strategy.
According to the CEO of the Jamie Oliver Restaurant Group, Jon Knight, part of the trouble with Jamie’s Italian was that they lost touch with their customers. “(…)We started to move into towns where there wasn’t large footfall and new sites were chosen that didn’t work for us. Most importantly, we lost touch with Jamie, there was a growing disconnect between what Jamie was doing on TV and in his books, and people weren’t experiencing that in the restaurants.”
3. Scrutinise your accounting
The way you handle your accounts has an impact on the success of your business. Can you answer basic questions about your cash flow, cost of labour and cost of food? Do your menu prices reflect the rising costs? It’s often difficult to keep track of finances when running a busy restaurant. However, weekly food and labour cost reporting is a good idea to make sure you know where you stand financially. Use reports to spot trends and strategies to stay profitable, and don’t be afraid to optimise your menu.
Berley hospitality accountants
Success boils down to managing finances right so you can focus on growth. As accountants for small businesses in London, Berley can help your financial affairs so your business can thrive. From pricing strategies to tax planning, we’re keenly aware that each business is different, which is why we offer a bespoke service that is tailored to your restaurant, pub or hospitality based business needs.
We’re also experts in business growth advice, and can help you create a business strategy that survives in the current economic climate. We can help you set key performance indicators (KPI’s) so that you can see just how well your business is performing and plan strategically ahead.
Choose Berley as your specialist hospitality accountants today.