20th May 2009 - 00:00
Abstract
Recent research from Lloyds TSB Commercial found that the top concerns for caterers, hoteliers and leisure firms during the downturn are retaining customers and the rising cost of commodities and raw materials.
The study also showed that 44% of bosses in the sector believe the recession will be longer and deeper than anticipated. With these concerns in mind, it's critical - now more than ever - to monitor your cash flow, review your business productivity and efficiency, and consider your strategy for moving forward. John Maltby, managing director, Lloyds TSB Commercial, provides catering businesses with top ten tips to help them respond to an uncertain market: 1. Keep your professional advisors involved - keep in close contact with your bank, accountant and solicitor. They are important sources of support and guidance for your business in both good and more difficult times. 2. Choose who you do business with – when you deal with new businesses, think carefully about your new customer's track record before offering credit, or ask for payment up front. 3. Don't put all your eggs in one basket - spread your risk and don't become too dependent on one customer. 4. Keep your customers satisfied – with fierce competition between businesses, good customer service is more important than ever. Make sure you keep closely in touch with your existing customers contacts. Speak to them and ask how you can help. 5. Monitor your cashflow – raise invoices promptly, chase any outstanding payments immediately and keep a safety margin in your account or facilities. 6. Review your finance options – there are many sources of finance available. Make sure you have the right mix - consider both asset and equity based finance. 7. Cover your risks – wherever possible consider fixing your rates or funding to make it easier to predict future costs. Identify risks to your business – and review ways to minimise or remove. 8. Review your investment plans – while it is important to invest for the future be very clear on the benefits of your investment plans. 9. Involve your staff – it is vital that employees are aware of any changes you make to your business. As part of the company, they will want to help and this will help motivate them during uncertain times. 10. Be prepared and plan ahead – good forward planning, including contingency testing, will help safeguard a business's performance during an economic slowdown. And take prompt firm action. Lloyds TSB Commercial is committed to helping firms in the catering sector realise their ambitions despite tough trading conditions. This industry has a key role to play in recovery, creating jobs and prosperity around the country. We recently launched a free business advice website aimed at equipping SMEs with the information they need to deal with the challenges presented by a recession. On the site firms can access guides covering topics such as cutting fixed monthly costs, getting a better deal from suppliers and retargeting a business for changing times. For more information visit: www.lloydstsb.com/businesssupport
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