Hospitality Industry Resource Center Reference Library

Managing Your Environment

Hospitality Industry Resource Center Reference Library

          

   The Business Renewal Process
How To Effectively Deal with a downturn in business

By Ray Ford--Hospitality Industry Resource Center

There are many reasons why a business that's enjoyed a long run of success will take a turn for the worst.

  • Sometimes it's a busy restaurant that usually has a two-hour wait only to watch the lines dwindle & empty tables take their place.
  • Sometimes it's a powerful competitor who dominates a market for 4 or 5 years only to witness a decline in headcount & sales.
  • Sometimes the traffic & head-count aren't off that much but the sales are on a definite downward spiral.
  • Sometimes it's just an ordinary bar or nightclub that's done a respectable business over the years but has slipped badly in recent times.

When this happens, the really fun game is to sit around & justify the situation by focusing on all those "social & economic changes" that are going on "out there."

You know the bit.... MADD, SADD, BADD, Aids, Aerobics, VRCs, DVDs, recession, the Asian economy, The Middle East, the Democrats, the Republicans.

Then, of course, there's taxes, higher costs, good people don't want to work in bars, we've lost control, there’s so much more competition. The list goes on & on.

Well, do you remember the movie, "Network" & that great scene when Peter Finch told everyone to throw open their windows & announce to the world, "I'm mad as Hell & I'm not going to take it anymore!"

The point here is this: Maybe it's time, instead of just talking about all those factors "out there" & accepting them, we begin to look inward, at our own situation. Then, get mad as Hell & determined to DO SOMETHING ABOUT IT!

Get on your soapbox.... "Hey everybody. It’s time to regain control of our destiny. The time is right for us to create a renewal program, take it to the community & regain that lost business one person at a time!"

Digging into the problem may uncover some new & astonishing revelations. If we dig deep enough, we just might find some new information that indicate other factors at play, factors WE CAN CONTROL !!

We might find

  • that the restaurant lost headcount because of a misconception that they were always full.....
  • that the powerful competitor didn't keep up with the times or was priced too high.....
  • that the club with decent headcount hadn't noticed that their target clientele had changed to a lower economic base....
  • that the neighborhood bar had not renewed it's customer base over the years...

All these are factors that can be dealt with in a positive manner.

The idea here is to focus inward, at yourself, your business, test yourself on a regular basis. Most of the pros tell us that having a positive outlook many times can be the difference in a tight, competitive situation.

Do any of these real life situations sound familiar?

  • Your DJ puts on a tape or a video most nights after midnight because everyone seems to leave about that time...
  • You notice that your high turnover problem is getting worse. The staff complains about not Makingng enough tips and you schedule less girls so they can have larger sections.
  • The band always looks good and plays tight sets on Friday but never dresses on Thursday, takes much more time between songs...plus because it's slow, your don’t use your best DJ....
  • The bar crew gets into the routine of closing down the wells early - leaving staff with the message that last call is NOT a time to sell product but a time to close up...
  • The bar down the street is on a discount binge, lowering prices, giving stuff away and well, maybe it’s time for us to try a similar approach...
  • The sound & lighting is in a bad way. One of these days.....

The answer is Renewal. Adopting an attitude that we're brand new again & nobody knows about us. Then, committing to go back to the community one-on-one, to meet & make new friends.... humbly invite them to try us for fair prices, good service & a staff that really cares!

What to do:

1. Give yourself & your operation an honest evaluation... in detail from A to Z. You might consider hiring a professional to come in & give you a "report card." An honest, unbiased evaluation of your business along with some suggestions on what needs to be done to improve.

2. Question each of your standards, systems, controls, procedures. Ask your management team & employees how can each be improved? Get everyone involved in the renewal process.

3. Commit to giving better service & creating value at all levels.

4. Rewrite job functions.... improve your training program... re-train your trainers.

5. Hire people, don’t fill slots...upgrade your want ads... add a few positive words that sell the place to prospects.

6. Take a hard look at the physical environment, the decor, fixtures, etc. Are you competitive here? How could you improve the physical room?

7. Begin now to develop a detailed action plan for 1999...cost out improvements - set priorities - decide on time-lines - due dates.

8. Develop business goals for the upcoming year.

9. Take the time to build a sound marketing program - at least six months ahead.

10. Look for new ways to reach the consumer. Is this the time to build that Web site & get your business online? Could we start a monthly email newsletter? What if we could sell some of our products, services online? What if…..?

11. Watch your business - know what’s going on. Become more "hands on."

12. Manage labor, all costs & the bottom line DAILY.

More recommended reading: How's Your Image? Blueprint For Success - Creating A New Image

Source: The 4-Part Manager's Survival Guide, "Bar/Nightclub Management & Marketing" , a   powerful tool for creating traffic & increasing sales using proven marketing, promotions & improved operations techniques.

About the author: Ray Ford is a food & beverage consultant. FORD Management Services specializes in business plans, new concepts & business turnarounds. The company also develops Web sites & online services. If you have any questions on a project that you're currently working on, or  would like some input, drop us an email: using this convenient form.

We’ve just scratched the surface here. If you want to learn more, I’d like to invite you to read more articles on "Success Management Systems" by jumping to our Manager's Pages here.

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