Healthy Hospo is offering a free course to help bar owners and operators navigate the financial challenges impacting hospitality this winter. Founder Tim Etherington-Judge reveals some of the key advice.
Hospitality is a goddamn resilient industry. We survived Prohibition, world wars, recessions and Covid, bruised and battered for sure, but we’re still standing, serving great drinks, and delivering wonderful service. And just as we thought we were through the worst with the pandemic mostly behind us, a storm of crises has engulfed us which threatens bars, pubs, restaurants, and hotels up and down the country.
I’m not going to spend many of the precious few words I have for this article outlining the situation, you probably already know how bad things are. I want to use this opportunity to give you as Looking after the pennies...much actionable advice as I can which might just save your business.
With energy prices so high and the government’s support for businesses being as clear as a freshly made Bloody Mary, reducing your energy consumption must be a priority. If you haven’t already – and I’m pretty sure you have – when you’ve finished reading this, pick up the phone and call your energy provider. If they won’t negotiate, start looking around to see if you can get a better deal.
Most bars make 80% of their revenue in 20% of their opening hours, so for most of the time your bar is burning through costs without delivering much to your bottom line. This winter might be the time to trim your opening hours to maximise efficiency. Look at your sales data to find out your quietest periods. Do you really need to be open on Monday, Tuesday or Wednesday when you might not even be covering the costs of opening? Can you open an hour later or close an hour early if it increases efficiency? Don’t be shy about cutting opening hours if it saves your business in the long term.
Cutting the hours you offer your staff might cause problems, but given we’re also in the middle of a staffing crisis it should be fairly easy to share staff across different businesses. Talk to other business owners in the industry to see if you can help each other out with staff. We’re stronger together and we’re going to have to support everyone through these difficult times.
Fridges and cookers
Heating food and keeping it cool in storage is pretty energy-intensive, and your fridges and cookers are more expensive to use than ever before. Can you increase the temperature of your fridges and freezers by 1°C? Scale down your fridge requirements and turn some of them off? What about offering more room-temperature food on your menu to reduce your energy bill?
Ice machines are incredibly wasteful with water, often with a ratio of 10 litres of water to 1kg of ice, but they also use a decent amount of energy, so you’re paying a lot just to make drinks cold. A machine with a capacity of 40kg/24h will cost you upwards of £50 a week at current London energy and water rates. Can you reduce your ice usage and turn your ice machine off? Make sure your ice well is insulated to reduce melt, if there’s space in your freezer then use it to store ice until you need it or consider pre-batching and pre-diluting drinks to reduce ice use on the bar.
Trimming your menu down to only the most profitable items to maximise your margins is another efficiency tactic. Print temporary menus featuring high-margin, quick-to-produce items, rotate items regularly to take advantage of seasonal products at cheap prices. Unleash your team’s creativity on the problem and have fun in creating amazing food and drinks for the least amount of money.
These are big decisions and ones that will have a wide-reaching impact on your staff, customers and suppliers. Honest communication is key, particularly with your customers. They are aware of the situation the country is in, so tell them what’s going on and why you’re making the changes you are. They choose to come to your venue because they like it, and most of them will support you through these times. At Healthy Hospo we’re here to help, so please reach out to us if we can help at all. We have more detailed information on how to get through these difficult times on our digital classroom, so check it out and use our resources to help your business, staff and, of course, yourself.