It has been well documented that we are currently going through a cost-of-living crisis. With everyone tightening their purse strings, the effect this is having on the hospitality and leisure industry is catastrophic. When looking at finances, whether personal or business, usually the first thing that will go are things considered ‘luxury items’ such as meals out, gym memberships and days out. Even those who still enjoy these luxuries are looking to spend less, maybe reduce the frequency.
At Adcroft Hilton we are seeing local hospitality and leisure businesses who are concerned about the viability of their business through the crisis. Pubs, restaurants, and other businesses are finding the squeeze on their finances even more compounded by the fact that they are still recovering from the Pandemic and repaying the Government loans taken to assist them through that period.
Here are some tips on how best to prepare your business for the continuing difficulties being faced:
- Plan and review your costs and expenses
Whilst it is difficult to predict the future, it is important to try to plan. Prepare a financial forecast for the next 6 – 12 months. Look at all existing costs and expenses and see whether you can reduce them. This may be done by identifying those that can be cut, cheaper alternatives and monitoring wastage. Also review your energy usage.
- Source locally
By sourcing locally rather than nationally or internationally, you could cut expensive shipping and import costs.
- Support your employees
Your employees are also likely feeling the effects of the crisis, and this may affect productivity. Encourage them to ensure they are claiming all benefits to which they may be entitled and to look at what cost savings they can make with their own personal finances.
- Don’t cut back on marketing
It can be tempting to cut back on all areas of spending, but you need to attract new customers. You can be creative and find inexpensive ways of finding new clients. Figure out who your best customers are and why they use you. Get your team involved in coming up with ideas.
- Treat everyone equally (including HMRC)
When struggling to pay all your suppliers, loans, HMRC etc it is important to review all your debts and ensure they are treated equally. We appreciate this can be difficult under pressure. However, if necessary, arrange repayment plans with them all to reduce outgoings. It is important to remember that this is a short-term solution and ultimately the full balance will be due.
- Come to see us!
We can review your finances and provide tailored advice to help your business, whether sole trader, partnership, or limited company to get through this extremely difficult time. If advice is sought early there are likely to be more options available to you.
