Hard Times Call for Bloody Hard Decisions

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We are all learning fast what it takes to maintain a business in difficult times.  As an industry hospitality has faced more challenges in the last two years than probably at any time in the past few decades. Fortunately, progressive managers, venues and boards have found ways to adapt; we have all learnt to be better analysts of what’s happening in our business in order we can make the hard decisions.

One of the key benefits we have learnt from recent hard times is to better understand the mechanics and particularly financials of our business, we also learnt that hard decisions are not easy and upset some people, but we need to keep focused on the greater good.

Surviving in any business requires a range of commercial, personal and management skills.  To survive in tough times means careful management of your venue and being extra alert to financial, operational, management and marketing issues in much shorter timeframes than we would have generally worked. However, as many venue managers experienced over the last couple of years we have made our operations a lot more efficient which we will carry through into the future. The points below will get you thinking about these issues.


Cash shortages can prevent you from meeting your financial obligations and make it difficult to maintain business. Preserving cash and reducing outflow, which may mean we need to close certain areas of the venue and modify the times of service or products available, particularly in catering.  Many are already making these hard decisions.

It is important to know your cash flow position on a daily basis and develop a cash flow budget for at least the next three months.  You will struggle going to the bank when you’ve haven’t got any funds left to pay wages so better you make an early approach if cash flow projections indicate there are going to be some challenges.  Many businesses have closed, not because they weren’t making a profit, but because of negative cash flow. 

Tasks to implement

  • Meet with accounting staff daily.
  • Prepare cash flow budget for at least three months.
  • Monitor daily cash flow position against cash flow budget.
  • Monitor daily debtors and creditors including tax.
  • Carry out daily bank reconciliation.
  • Monitor stock levels to minimise overstocking.
  • Make hard decisions when cash flow is negative against budget.


Management staff need to ensure they are physically present and interact with staff and customers; it’s important that staff and customers see the management team is in the hard times with them and sharing the challenges. Senior management needs to be in more regular contact with their boards or committees to ensure their support for hard decisions.
When services are curtailed or reduced it is the staff on the frontline who can often receive the most complaints or abuse from customers. It is imperative that management provides support to all staff and training them how to deal with issues of customer dissatisfaction, which may also require a campaign for members understanding of the issues and where they can take their complaints to, such as management rather than staff.

Tasks to implement

  • Daily management team meeting to review trends and establish short-term strategies.
  • Weekly staff communication on hard decisions and how to manage unhappy customers.
  • Establish regular meetings with boards and committees to update them on challenges and seek their support for hard decisions.
  • Regular communication with members and customers apologising for hard decisions and ask for their understanding.


The key resource in hospitality are frontline people, they deliver the product and the service and they accept the accolades and the complaints.  Up until a matter of weeks ago the club industry was acutely short of staff, however due to the dramatic downturn in business over the last few weeks many venues are finding themselves in a reverse situation in such a short time frame where they are struggling to find the hours for the core staff.  The good times will return and we will return to staff shortages and increased wage costs as I’ve written about in previous communications.
Looking after current core staff will be paramount when business returns.  The challenge of cutting hours through lack of customers and to reduce costs, is certainly one of the current hard decisions.

Tasks to implement
  • Introduce staff incentives that encourage sales.
  • Acknowledge staff performance and encourage good working morale through weekly staff meetings.
  • Identify training needs of staff and encourage ongoing learning.
  • Be aware of staff health and well-being in uncertain times and make staff counselling services available funded by the venue.
  • Review the decor and layout of your premises to ensure that that it is attractive as possible.
  • Consider the environment and atmosphere, reduce music levels, choose soothing and relaxing music, place fresh flowers around the venue.


Marketing is an area of significant expense and can represent up to 12% of turnover in some menus, while the industry financial benchmark should be closer to or below 8%.  In hard times it’s one of the easy areas to cut costs without considering perhaps the immediate and longer-term consequences of not regularly communicating with customers or keeping them up to date with ongoing promotions, activities and benefits.

Endeavouring to maintain current customers is a lot more economical than trying to attract new customers so during hard times expenditure on marketing, as a proportion of turnover, may be higher than would normally be considered in order that customers are not lost or enticed to other venues. It is probably one of the areas in tough times that the percentage of expenditure is greater than normal, but should probably be seen as an investment in customer retention and future customer visitation.

Tasks to implement

  • Determine what percentage of revenue you can afford to spend on marketing.
  • Review your customer service not negotiable standards and re-communicate.
  • Review and update your marketing strategies frequently, even daily.
  • Monitor market trends and changing needs of customers.  Adapt to their needs, because they won’t adapt to yours.
  • Maintain a competitive pricing strategy.
  • Identify your core customers and occasional customers and kill them with kindness. 
  • Keep up-to-date on product and service development and technical change. 
  • Look at offering add-ons or package to your products or services to exceed your customers’ expectations.

Finally, don’t overlook the welfare of your management team, they are just as vulnerable to the mental pressures as everybody else but perhaps due to professionalism and sense of duty they may not show it.  Regular communication in face-to-face meetings is paramount in tough times to share the challenges.

Good times will return we need to ensure we will have the resources and the enthusiasm to meet our members requirements and operate a more efficient and profitable club.

“Tough times are inevitable in life and in business. But how you compose yourself during those times defines your spirit and will define your future.” – Richard Branson
If you have any thoughts on this subject, I’d love to hear from you
John Dickson

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