Hi Friend,

We are officially in a recession. Nobody alive has ever seen a recession like this, with record inflation and practically zero unemployment. Central Banks and the Government seem powerless to protect us from this poisonous cocktail.

As a business owner, you can be forgiven for feeling powerless to overcome these challenges. The price increases are unprecedented, with gas and electricity trebling. Even a tiny cafe will see its bills rise from £500 per month to over £1500 per month. This alone could make a cafe business unviable. You have no choice but to take action; your customers, team, and livelihood depend on it.

So, where do you start?

Simpler, Better, Cheaper

Start by making things simpler to do, better for your customers, your team or the environment while being cheaper for the business.

Simpler, start with your menu. Firstly, get rid of anything that slows down your service, e.g., pancakes that take 20 minutes to make and break your production process. Then analyse your menu, and you will find that 80% of your sales will come from 20% of the items.

Reducing your menu breadth will result in you using fewer ingredients, which means less money tied up in stock, less waste, and faster preparation time. Add to this that your guest will choose faster, speeding up your queues, reducing order time, and improving your service.

You can't get better until you know how bad you are!

Taking stock weekly and calculating a stock value added £39k to our bottom line.

The hardest thing is to take a stock count every week and calculate the value; even doing this manually should take less than an hour a week. Once you have that number, you can quickly determine how much money you made last week using this formula.

Record all wastage, and note if it is out of date or damaged. Review what is left on the plates by guests; leftover butter or jam means your portioning is too generous.

You will inevitably have to increase your prices; everything you buy has gone up, but do it scientifically. Use your master product margin spreadsheet or, even better, your epos system to understand your individual item margins. Identify every item that doesn't hit your margin target and either stop selling it, put up the price or change the recipe. We use our margin sheet combined with monthly item sales to tell us how much extra we would take for each individual price change.

Cheaper

Going cashless will save money if you consider the staff and banking costs and get a better deal on your card transactions.

Check how you package everything for takeaway and how freely things like napkins are used. Use glasses rather than plastic cups for cold drinks served to stay and for free water. Give a big incentive for people to bring their own cups again as they have got out of the habit through covid.

*This is an excerpt from our latest article for Boughton's Coffee House Magazine