The temporary closure of hospitality businesses has certainly had an impact on the industry. But the lockdown cannot go on forever. And when it’s possible for people to be out and about again, they’re going to visit the places that provide that all-important sense of community: our bars, pubs, restaurants and cafés.
If you’re one of these businesses, preparation for the future is essential. Without giving proper attention to the numbers, you risk making it harder to survive and thrive in the challenging months ahead. So, what can you do to get ready to welcome people back through your doors?
Keep a close eye on cash flow
Cash flow really is king during these tough times. Many hospitality SMEs have recognised this – some have even sold gift cards to tide them over whilst they’ve been closed. If you’ve taken a similar approach, remember that these gift cards will be redeemed – which may cause a dip in money in, and a rise in money out.
That’s why analysing your cash flow should be put at the top of your priority list. When your customers are able to enter your premises again, you want to make sure you’re in a strong position to handle any abnormal fluctuations. To do this effectively, you’ll need to forecast your finances and potentially cut costs where possible.
Forecast using a best-case and worst-case scenario
Assessing your forecasts – and confirming that they make sense in the present context – is essential. You may need to consider the phased return of certain members of staff, the maximum number of people you can have on-site, and any new social distancing measures you’ll need to implement. Constantly review your projections as new information becomes available too.
It’s also a good idea to consider multiple scenarios as you build your forecasts. At the very minimum, there should be two: one that’s optimistic, and one that’s cautious. Government regulations and new competition are just two unforeseen circumstances that you may need to react to. If you can compare your forecasts to similar companies, this will give you a good insight into how realistic they are.
Streamline costs and seek support
Next, highlight any areas where you could trim costs. Perhaps you’re still using some forms of paperwork, for instance. Look into whether these can be digitalised (and therefore more organised) with software. This will save a substantial amount of both time and money.
There is various support you can access too. To find out more, take a look at our blog. It summarises the government’s emergency measures for those in the retail, hospitality and leisure industries – as well as businesses more generally.
Put your accounts in order
Software is also particularly helpful for your accounts – you can use it to access real-time financial information, making assessing your cash flow and executing vital business decisions easier.
We additionally recommend using this time to get ahead with your other accounting duties, such as your tax and reporting responsibilities. This way, when your deadlines are nearing, you won’t have to put in much work at all. The information will be there ready for you, giving you one less thing to worry about and leaving you to focus on more pressing business matters.
We really hope that this advice helps you to prepare successfully for a better future, and that your hospitality enterprise sees this situation through. If you need any support, whether it’s with cloud accounting software or budgeting and forecasting, then the team here at Nabarro Poole can help. We’re always at the other end of the phone, so don’t hesitate to get in touch.