Published: 4th July 2016
Our dynamic and creative restaurant industry is renowned the world over, and in the main has continued to thrive during uncertain economic times. But recent figures show a worrying decline in this sector - insolvencies increased by 12% during 2015, at a time when company insolvencies as a whole fell by 4%.
A variety of factors have caused financial distress for many restaurant businesses. In particular, the 4.5% increase in food prices every year since the recession, has been a major blow.
Last year’s poor weather, combined with rising energy prices, have also been a significant drain on profits. Furthermore, consumers seem reluctant to spend on ‘non-essentials’ despite a fall in unemployment.
So as costs go up but demand stays the same, where do you go for support and a firm plan of recovery if your restaurant is experiencing financial difficulties?
The insolvency industry provides help for businesses at any stage of development, not just for those on the verge of financial collapse, as is a common perception. The main aim of insolvency practitioners is business rescue, and licensed IPs can work with great effect to stabilise a business before a poor financial situation causes further decline.
It can be difficult to view financial problems with an objective eye as a business owner, and the fresh perspective, in addition to industry-specific knowledge applied by a financial expert, is crucial.
Our team at Real Business Rescue has in-depth practical experience of the restaurant industry, and will work to relieve the financial stresses you are experiencing.
Consumer spending on eating out has increased by just 0.8% over the last year. The drop in unemployment appears to have done little to assist the industry as a whole - even established restaurants have seen their cash reserves depleted as consumers remain hesitant to spend money on eating out.
The huge diversity within the restaurant industry means that new entrants pay dearly for bad decisions such as choosing the wrong location, and have to fight endlessly to gain sufficient market share.
Low footfall or too much local competition can result in some new businesses struggling for survival, almost from day one.
So what can be done to steady a business already on the edge of insolvency, or bolster one with depleting finances? The professional input of a licensed insolvency practitioner with experience in your industry makes it possible to rebuild a sustainable business.
At Real Business Rescue, we understand the nature and characteristics of this sector, and can identify areas where crucial savings are achievable. We have close contact with over 50 different UK lenders, which opens doors to the working capital your business needs to survive.
If ‘traditional’ lending from your bank isn’t forthcoming, alternative options include crowdfunding, peer-to-peer lending, and angel investment, all supported by affordable repayment plans with terms tailored to you.
We operate from nationwide offices, and offer same-day meetings so that action can be taken quickly. So apart from guiding you to potential sources of working capital, what else can we do to make a difference?
Here are just a few of the areas where we can help:
Call one of the team today for an initial consultation free-of-charge.