Stepping back to consider your business’s finances, marketing and forward planning is key, writes accountant Claire Middlebrook
I AM relieved at the temporary rates reprieve; but it is just for 12 months and you know that the hit will come.
There are, however, some financial steps you can take to be prepared.
Think afresh about how you trade.
If you think it will take savings to manage the bigger bill [at the end of the 12-month rates reprieve] try listing strengths and weaknesses of your business.
If you believe key performance indicators are for manufacturing or the NHS, think again. KPIs are there each morning you walk in the door; regular bills, stock control, wastage and people management will be key ones.
When it comes to bills and stock control, look at payment terms with suppliers.
You could also hire in a ‘wet’ stocktaker at a small fee to manage everything.
On wastage make sure your financial system tells you what you need to know about food wastage.
And, when it comes to people, if you pay the living wage instead of the minimum wage you have more chance of getting the best from staff.
Licensees could be forgiven for thinking they already know all about running a pub or hotel business.
And, for the most part, they do; but in many cases it’s mainly the operational bit.
What about the finance and marketing or forward planning aspects? I believe it’s about having a lieutenant to oversee everything.
You may ask if it’s worth paying someone to give you time to think.
Well, do you have a regular diary date for planning?
If you don’t, a trusted pair of hands alongside you can take charge on certain nights, and in that spare time you can plan how you’re going to run your business.
Everyone has their own ideas about turnover, special events, diversifying, reaching out to different people.
If you pull pints every night you have less time to come up with those ideas.
You should ask yourself why you wanted to own a pub; did you want to be in one seven days a week or was it about being your own boss?
It’s perfectly understandable to not want to work for anyone else and make your own profit.
But yours is a business just like any other, so you have to decide what you want from it.
Do you want one pub or two pubs? If you want two you may require that trusted lieutenant to run the first.
Finally, it’s worth asking if a long-standing accountant is truly a business advisor, if you meet once or twice a year.
I believe if you want someone to truly advise it should be monthly to discuss cash flow and what you want from your business.
Because the licensed trade has been hard hit recently my firm has added to its experience, mainly with solvent solutions.
We had a family-run hotel in Stirlingshire recently where insolvency arose only due to long-standing historic debt.
We found everything else was sound, were able to restructure, and the business was saved. The hotel is still trading and everyone is in a job. Good news for all.
• Claire Middlebrook is the managing director of Middlebrooks Business Recovery & Advice.