Back to Basics: Expanding your business
After the initial struggle of starting up, many pubs and other licensed trade businesses find themselves at a standstill and unsure of how to expand further. But it¹s important to remember that you can¹t afford to sit still. The most successful publicans are those who constantly change and adapt their business in line with their commercial environment. If your business growth is in danger of grinding to a halt, there are some simple key steps to take.
1 First of all, before you can decide how to expand, it is important to make sure you have a complete and thorough understanding of your business only then can you know what you have to work with.
Take the time to fully analyse every aspect of your business, inside and out. As it can often be hard to be objective when you are so very close to something, it might also be worth asking someone impartial to get involved, if not a financial or business advisor then perhaps someone with experience of the licensed trade.
If you identify any problems during this process, deal with them before going ahead.
2 Next, consider the current economic climate and whether it is a good time to expand your business. Review your sales forecasts for the short and medium term and decide whether your business can sustain the extra costs associated with expansion, taking into account extra supplies and recruitment and development of staff. Keep in mind that any additional costs are likely to be paid back over a number of years.
3 Cash is the lifeblood of the pub trade so it is worth reviewing your current suppliers and regular costs including utilities and bank charges.
Look at any opportunities to make savings where possible many small businesses in the UK could save thousands of pounds simply by switching to a more competitive business banking deal, for instance.
Only with a full understanding of your business and a thorough review of your finances can you ensure you have strong foundations on which to build.
4 Every business has its most valuable customers, typically those who visit regularly and spend more. Recognising key customers can help you to find new ones. Take the time to build good relationships with regulars and then look at ways of attracting new customers with similar profiles.
5 It may be that you can offer additional services to these or other groups of customers by diversifying. If you only usually serve food throughout the day and early evening for example, perhaps you could start a brunch menu. Or, if you generally offer only traditional pub food, you could consider introducing a themed menu on a specific weeknight. This could not only help to increase your revenues but drive footfall.
6 Having a competitive edge is essential in the pub trade, so you need to take a thorough look at the marketplace you¹re operating in.
Have new competitors arrived on the scene and, if so, what products or services can you offer to set yourself apart?
7 Whether it is something as simple as a special weekday offer or evening entertainment, a solid USP (unique selling point) is vital for continuing success and preparing for expansion, so reflect on your strengths and any key selling points and make sure they are promoted.
Have you considered joining forces with another pub or licensed restaurant as a means to expand? From partnerships and mergers through to acquisitions, joining forces with another business is one of the most effective ways to expand. Although it can be a daunting decision to let someone else have a say over your business, it is a great way to increase and improve your resources, contacts and skills base.
8 Another option is to look at offering your business as a franchise.
Franchising your pub concept is one of the easiest ways to grow on a national level within a short time.
9 Websites play an integral role in business today and the internet is one area that¹s worth investing in. Hire a professional web designer to make sure your website not only has a Œwow¹ factor but also reflects the right image for your business.
10 Whether it¹s changing your menu or your target customer base, the key to maximising your business¹ potential with a successful expansion is to fully understand your market, so set realistic goals and invest wisely. n
Steve Jennings is director of business banking at Alliance & Leicester Commercial Bank
