Businesses in the leisure, tourism and hospitality industries have been among the hardest hit during the Covid-19 pandemic, social distancing measures and enforced lockdowns.
Some establishments have seen visitor numbers tumble while others have been forced to close altogether. All the while, the bills mount up but still need to be settled.
In this article, Alison Magee-Barker draws on more than 30 years of experience helping businesses perform at their best to explore ways in which you can keep your cash flow under control.
One of the most basic rules of business is that the lower your costs, the less income you need to generate to cover them. Your first step right now should be to divide your outgoings into two categories: those which are fixed, and those over which you have some control over.
For any product or service you use, make sure that you’re getting the best deal: that might mean switching plans with your current supplier, shopping around for another supplier, changing the way you buy or pay, or even considering alternative products or services that achieve the same result in a more cost-effective way. Review your menu and the ingredients required without compromising on quality and even consider if you need to give your guests such a vast array of menu choices in the first place.
And it is also worth doing your research into what you consider to be fixed costs. It can be useful to ask for quotes for the future. Finding a lower price you can tap into further down the road might ease the pressure a little and help with your future cash flow projections.
Turn your focus on your own business, too, and examine if there are ways that resources can be bought or used more efficiently. Even if you can’t reduce the unit price, you may be able to save money by reducing consumption.
Increasing income may be your toughest hurdle right now as demand is low and access to your audience is restricted. But with a little creative thinking, there may be ways to subsidise lost income.
The process begins with imagining your ideal customer and assessing what their needs are in this moment. Then find ways in which you can fulfill those needs. Obviously what this means for your own business will be unique to you, based on a large number of factors, not least what type of products and services you are already known for. But the key is to become a business that can make happy, enjoyable experiences happen for people. Attach your brand as best you can to the idea that you’re available to make lasting memories. Consider delivering lunches to those businesses still open and when we can, consider a socially distanced ‘rent a desk’ offer with a food and beverage add-on.
The run-up to Christmas is also the ideal time to launch a gift voucher programme, for example. Sure, recipients won’t be able to cash in right away, but most people don’t mind considering the circumstances. Most of us are looking forward to life returning to normal and a gift voucher takes the idea one step closer to reality. Talk up your heritage, too. Supporting local businesses is a big theme this year.
There may be ways to diversify your service: if you’re a food and beverage venue, you could launch takeaway or delivery options. People are as eager for great, convenient food as ever, so think about ways that you remove the obstacle between your customer and your kitchen. Some of your products might also work as gift hampers, another timely idea as the gift-giving season reaches full swing. Consider adding a little extra sparkle to items that you’re particularly well-known and marketing them as present ideas.
There’s no shame in asking for help during the worst public health crisis – and economic conditions – of recent memory, and absolutely no sense in going out of business because you were too proud to reach out for widely available support.
Talk to your local council or chamber of commerce about grants and other financial aid. But do be careful about accessing loans, because even the interest-free, easy-access deals must be repaid at some point and you’ll need to pay close attention to the repayment terms.
Draw up a cashflow forecast, then update it when you are able to reduce your costs and find new ways to generate income. Not only will this help you define your goals, but it will remove the stress of the ‘unknown’ and it will also be a useful tool should you need to ask for financial support from a third party.