Hospitality businesses have been advised to adapt to changing market conditions and expect to make a small loss in order to survive the recession.
Those companies that operate under poor management and do not plan ahead have been warned to expect to fall victim to the ‘challenging economic climate’, that has claimed Gary Yau’s Aaya, Fishworks and Gourmet Restaurants this month.
Speaking at the Hospitality Show in Birmingham, Simon Glyn, client partner for business recovery services at Vantis, said that those businesses that bury their heads in the sand by not preparing themselves for the worse would most likely fail this year.
“Businesses are waiting for conditions to calm down but they will not,” he said. “We are only just at the start of the recession and the situation can and most likely will get worse before it gets better.”
Glyn said hotels, restaurants and pubs need to revaluate what their market is and what their customers want, while bearing in mind the notion of success will have changed throughout the duration of the recession.
“Success in the next two or three years could mean breaking even, making a small loss, or even just surviving while your competitors fall by the way side,” he said. “If you haven’t made any changes to your business model in the last six months then I would seriously doubt your ability as a businessperson.”
Simon Glyn’s top tips for surviving the downturn:
Understand business. Invest in employing someone who can understand the business dynamics, it’s the most vital area you can focus on during the recession.
Stress test. Think ahead by stress testing the business model for realistic possibilities to understand the pressure points
Act quickly. Seek professional advice early on, too often management teams leave this to the last minute
Stay strong. Making redundancies may be difficult and emotional, but timely decisions could save the company from falling
The hook. Focus on what is the winning part of your business
Check out Restaurant magazine`s Thrifty 50 - top money-saving tips from industry experts as part of its Beat the Crunch campaign.