Controlling costs biggest barrier to growth

The 7th Association of Licensed Multiple Retailers (ALMR) benchmarking survey paints an optimistic picture for the hospitality sector.  Launched this month (August), our industry’s most authoritative survey reveals the UK’s pubs and bars have re-established a firm platform to deliver growth as the sector recovers from recession and the credit crunch.

The report, which surveyed ALMR members who operate a combined 13,000 outlets and employ 350,000 people, highlights two key performance indicators.

• First, capex is up more than 66% as operators invest in their brands, people, offering and technology.
• Second, like-for-like sales are trending upwards, climbing by 5.8% in the year to October 2012.

The ALMR’s strategic affairs director Kate Nicholls is confident about the sector’s ability to “generate jobs, invest in community facilities and play a full part in the Big Society.”

Cost control is “a critical determinant of profitability”

However, she identifies a potential banana skin to recovery, warning that failure to control costs is the biggest barrier to sustained growth. She says cost control is “a critical determinant of profitability.”

The survey reveals for the first time in four years, the average cost of running an average pub has increased, standing at 48%, an increase of 3% from the previous survey.  It had stood at 51% at the recession’s peak.

Watertight cash and stock controls are essential

At GS Systems, watertight cash and stock controls are essential to our proposition when we help our clients  use technology to drive business growth.

What do I mean by watertight?

If you happened to watch Coronation Street this week (Monday August 5th) you would have seen a typical example of poor practice (I must confess that I don’t watch the soap but an avid fan and colleague in the office showed me the relevant clip on ITV’s iPlayer and it does illustrate the point very well).

The clip shows a woman (Gail) popping into her son’s local bistro and asking for a nice chilled Chardonnay direct from the fridge. The owner’s wife simply hands a bottle over without anyone ringing up a ‘complimentary‘ bottle of plonk in the till.

Embed operational procedures around your technology

How many operators do the same?

Whether it is a free coffee at the end of a meal or staff drinks or a dessert on the house, failure to record all your transactions and cash and stock movements means you cannot achieve a truly accurate stock take.

You’re going to struggle to get your costs under control, especially if you’re not following best practice in other areas of the business such as managing and monitoring staff rotas and costs, tracking deposits and ordering from suppliers.

From my perspective, the power of EPOS to drive business management solutions can only EVER be realised if the technology is complemented by watertight operational procedures embedded around the system.

Time to get a grip on your costs

Unless you track and record your cash and stock as it moves through the business you’re never going to be able to get a really tight grip in your costs.

Think about it.

• Could you freeze frame your business, like pressing pause on the TV, and guarantee you’ll be able to account for all the stock and cash within your business?
• Do you know if you have too many staff covering a session?
• Or have you ordered stock from a more expensive supplier when there were cheaper options available to you?

No. Well perhaps it is time get in touch with us at GS Systems.

The procedures we build around our EPOS-driven technology solutions are really simple to implement and follow.

Technology solutions boost operational and management efficiencies

And because most of the processes automate traditional manual tasks they aren’t labour intensive. That’s why our technology solutions boost operational and management efficiencies rather than add to the workload.

What’s more, they ensure your costs and stock are always monitored and under control and your margins are protected so you can generate the GPs your efforts merit – and give you the financial resources to expand your business and open or acquire new outlets.

Using a fictional drama like Coronation Street to illustrate the point is a bit of fun on my part. The real world offers numerous examples to highlight how easy it is for your costs to spiral out of your control. You’ll have plenty of your own you’ve either heard about or seen as a hospitality operator.

Order our “10 ways technology can control your costs” report today

To help you establish and maintain a tighter grip on your costs and stock, we are publishing our own best-practice report revealing 10 ways you can use technology to control your costs.

Each tip will help you do better business and put the leash on costs that can all too easily spiral out of control.