HOW MUCH WILL BREXIT AFFECT YOUR BUSINESS?

by in The Economy

September 29, 2016 • 2 comments

Now that the vote is over we can really only be sure of two things:

In Chicken Little terms… “the sky has not fallen”.  If you listened to certain pundits, in the immediate aftermath, you might have been convinced that this would be the case.  In reality we’re really just in a prolonged and annoyingly impotent economic “pause”.

There IS uncertainty – absolutely no doubt about that.  Banks, employers, government, big business, house sellers, house buyers – in fact pretty much all of us are experiencing some level of uncertainty in terms of what we’ll be doing in the future.

And what does business hate?

Uncertainty.

Uncertainty means banks, partners, lenders, landlords, suppliers are all a little jittery and that always creates a tough trading environment.

Beyond that we actually know very little.  I’ve read some total nonsense by supposed “entrepreneurial gurus” (almost none of whom have actually run a proper “moving parts” business) come up with some crazy predictions.  They seem to know exactly what will happen and how this can affect you.  This is nonsense at best and dangerous at worst.

So, whilst we wait for everything to settle down, it’s really important to focus hard and make sure that you are doing the very best job in your business.  You have to ensure that your potentially nervous and perhaps increasingly fiscally prudent customer feels confident enough to spend their hard earned cash with you, rather than with the countless other options they have.

So how do we do this?

I’ve put together seven specific tactics that you can put in place, at zero cost, to safeguard your business through this uncertainty.  None of these are rocket science but all are the essential components that we use with our top level one on one clients.

1. Consistently monitor and control your wage cost.  You must have a very simple spreadsheet in place that accurately calculates exactly what you are spending on your staff.  With ever increasing minimum and living wage rates this part of your business is being hit harder than ever.  In the medium term that’s a good thing for the industry but right now it’s creating a lot of pain and you need to pay more attention than ever.
   You must have a very clear number in your head for how many hours in total are required.  This should be cast in stone.  And every week you review this and see if you can shave half hours off here or there or increase the total as a result of a “big day” that’s coming up.  The key here is to control it weekly!  A few extra hours shaved every week makes a substantial difference to your yearly profit.  A document like this illustrates this very graphically.
2. Break your day down into distinct sales time zones.  Visually most coffee shops and cafes operate in a very similar fashion throughout the day.  But your customers have very different requirements depending upon when they visit.
   To fully capitalise on the average spend, for each section of the day, you should make sure that your menus, merchandising and even what your staff suggest fundamentally changes between breakfast, morning, lunch and afternoon.  You should also ensure that all staff have a very clear idea of what the targets are for each section.  To do this properly you will need to have a clear view, based on historical till data, as to just how many buns you want to sell with your morning coffees and the same figures for the other sections.
3. Balance your menu between sweet and savoury.  Most menus are developed and heavily biased towards either the owner or chef’s personal preference.  If you have a savoury bias then it’s highly likely you’re not providing enough of a sweet choice at certain times of the day.  Likewise, too much of a sweet tooth won’t help balance the menu towards those with a predominantly savoury palate.
   A very clear and dispassionate look at your menu will help to fill in these gaps and broaden the choice for all customers which will directly lead to an increase in your customer spend.
4. Treat your costed menu like as your bible.  You have three critical documents that must be referred to weekly to ensure you have a profitable business.  The first is the costed rota, the second is your accurately costed menu and finally you have your weekly or monthly profit and loss.
   Your costed menu allows you to regularly (at least once a week) spend some time reviewing the data in terms of what you’re spending and, once you’ve recorded the weekly sales, the actual profit produced per item per week.  This informs the decisions that you’ll make in terms of supplier negotiations, wastage control, staff sales training, merchandising and price increases.  It’s simply not possible to adequately run your business without this document.
5. Map out your customer journey – daily.  Every single day you and key members of staff should be walking through the whole business and seeing how it looks from a customer’s perspective.  You must keep continually trying to improve in all key areas to drive the customer spend and ensure that customers return more frequently.
   Most owners and managers do this once every month or so and sometimes less frequently than that.  The daily discipline of doing it yourself and with as many staff as possible – right down to Kitchen Porter level slowly but dramatically shifts the whole perception of the business towards the customer and away from the day to day hassles of operational efficiency.
6. Obsess over merchandising – in the fast food world there’s an accepted notion that we’re going to be asked “would you like to go large?” when we order.  In our world that just doesn’t work – that’s why your merchandising needs to do this job for you.  Crystal clear pricing and names on all products, immaculately clean displays, bountiful displays for baked goods and razor sharp lines of items like millionaire shortbread will all help to drive your sales.
   This isn’t anecdotal evidence; we’ve tested in in multiple shops in all parts of the country.  The key message is – make it as easy as possible for your customers to buy.
7. Engage with your customers – When times are tough it’s doubly important to ensure you make your customer feel valued.  This starts, as ever, with ensuring you’re employing great people who actually like to engage with customers but after that it involves consistent training and work to ensure that you are all actively remembering:

• Favourite drinks
• Children’s names
• Holiday destinations
• Where they work
• Favourite food items
• Hobbies
• Sports teams supported
• Names

None of these tactics costs you anything and all will help gradually drive loyalty, customer spend and profits.  And dramatically increase your chances of survival should the economy drift into recession as a result of the Brexit vote.