2024 saw cafes and hospitality business top the list of business closures with a closure rate of 8.5%.
In 2025, CreditorWatch has predicted that to rise to 10%.
Rising costs, persistent inflation and interest rates have been the main causes. While prices aren't necessarily anticipated to drop, inflation and interest rates are predicted to ease during 2025. Albeit slowly and cautiously.
Which is why it will very likely be another difficult year for many hospitality businesses.
If you're reading this, I want your doors to stay open.
Assuming you're already well acquainted and familiar with your numbers I'd recommend 3 foundational principals to boost your hospitality business: Optimise. Connect. Add Value.
If you don't know your numbers then step one is to know your numbers. Intimately.
Optimise.
Ensure your systems, processes, marketing and impact points are all as optimal as possible. Can you do anything better? If so, how? We need you operating as efficiently and as profitably as possible. What's underperforming? Are there underutilised resources? Is your marketing clearly communicating the highest benefits of your business? Are you promoting consistently and regularly enough? Are you providing the highest levels of service that you can? Which of your impact points could be enhanced? What expenses could you reduce? What prices could you raise? What could you up sell? Are you measuring and tracking your performance adequately? And so on.
You want to run the best business you can that provides more value than any of your competitors.
Connect.
The ultimate goal here is to obtain and retain more customers.
Connect meaningfully with people, especially your customers and target market. Grow your network. Greet each customer with a smile, serve them with a smile, make smiling a policy! Know what your customers value. Develop and nurture relationships within your community. Connect and collaborate with non-competitive and symbiotic business near you. Support community groups, initiatives and charities etc. Remember that people buy feelings. If your customers feel liked, valued and appreciated, they'll be rich sources of repeat business and referrals. Get creative and get connecting.
Add value.
The outcome you want to create here is increased transaction size and volume, as well as obtaining new customers. Everyone is adding to their price but not everyone is adding to their value. There lies the opportunity for growth and competitive advantage. What can you do that will add value to your customers? Think of things that add value, look for things that add value and do things that add value.
Don't wait for interest rates to drop or prices to go down. Don't hope things will get better soon.
Now is the time to get intentional about growing your business and become a creator of your circumstances.
If you need specific advice tailored to your unique circumstances please take full advantage of our complimentary discovery sessions.
Chris.
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