The continued uncertainty of the Brexit process is having far reaching effects. Consumer confidence is low and the resulting belt tightening of consumers means non-essential items are bearing the brunt. Visa have quoted the worst year for consumer spending since 2012.
Restaurants have undoubtedly felt the effects. Byron have recently agreed a rescue plan with their lenders and landlords. Jamie Oliver’s restaurant Group is in the midst of a further round of closures.
The whole industry is under pressure.
Consumers are demanding more choice, at the same time as food prices and staff costs increase. People will always need to eat, and people will always love to eat out. The market is there, but it is changing.
Having clear direction and moving with the times is more important than ever.
We have helped a number of businesses in identifying causes and impacts of financial stress. Below are two recent case studies in the restaurant industry.
Case Study 1 – The Broken Family
This project involved a family run restaurant where personal circumstances had affected the control over the financial management of the business. Gross profits on food were unsustainable, increased borrowing, and decrease in covers had left the business overstretched.
With a detailed review of the financial position of the company, the production of revised cash flow forecasting, advice and implementation of robust systems, a new banking facility, in addition to advice on potential new revenue streams, a restructure of the business could be achieved.
With new ideas and direction the business has been able to look to the future.
Case study 2 – The Head Chef
A recent project involved a chef buying a business that he had been a part of for years and knew and loved. His experience and passion was in the kitchen. The acquisition of the business had left him saddled with debt, with insufficient resources for the right level of staffing. The Chef’s time was spread too thinly, and the quality of food being produced began to suffer. A quiet restaurant and the addition of pressure from the landlord put the business under an unsustainable level of stress.
If you are thinking of a change in direction, whether that be due to debt pressure or simply considering the need to re-energise your business, we might just have the tools to help.
For further information please contact Lynn Gibson or one of the team on 01932 336149.
