Member Article

The businesses cashing in on major events

Six tips from Xero UK Managing Director, Gary Turner on how small businesses are cashing in on national events

Britain’s pubs are certainly winners in the Rugby World Cup, even if we’re not, with reports showing a spending growth of 3.7 per cent in September. What we don’t know is whether it’s just a coincidence that beer and rugby go hand-in-hand, or if pubs and other hospitality businesses are being strategic about capitalising on big sporting events to boost their profits and cashflow.

Many of our customers, have enjoyed a recent boost in sales. We talked to them to find out how they did it.

Making a profit from the rugby

Shack Revolution came into existence when brothers James and Richard Manning realised they needed to make more margin on their farm’s fruit business. They decided to diversify into the events business, bringing food and drinks to festivals and events with pop-up shacks. Shack Revolution developed plans to help them go from making £50 a day in their hometown in North Wales, to preparing to sell 10,000 to 15,000 pints of juice an hour at Wembley around the Rugby World Cup.

Key tip #1: Figure out your ’cost-ability’

Preparing for big events is a significant way to make big money if you manage your costs, which can often spiral out of control. Shack Revolution uses Xero accounting software to pull all the costs together to give a live snapshot of everything. This gives a good idea of real time ‘cost-ability’ whether it’s fixed or variable and allows Shack Revolution to control a certain percentage of the risk.

Key tip #2: Transparency and control

Use accounting software to provide transparency and control major costs like stock and staff and the percentage of takings going to the additional fees and costs you’ll need to factor in. Have a clear view of what money you have in the bank and work out the staff cost of each product sold, or in this case pint served. Having a good snapshot of your finances allows companies to make the best decisions.

How creativity boosts sales around the rugby

Enterprising young Brighton-based business, Bison Beer developed a plan to provide a new beer for every occasion and got a welcome boost in sales with a clever and creative idea themed around The Rugby World Cup. The idea was to put the best and strongest beers from each rival nation up against each other, head to head. In support of the Wales versus England game last week, Bison Beers selected a powerful beer from Welsh-based brewer, Tiny Rebel and matched this with a big, hoppy beer from Bristol in support of England fans. Pitting the beers head to head in this way via a social media campaign drummed up plenty of interest and sales.

Key tip #3: Buy as much additional stock as you can afford

If you plan a little in advance and figure out when the best times are to really ‘go hard’ on your business, you can be really strategic about your financial planning. Use Xero’s mobile application everyday to reconcile accounts and make quick business decisions which leaves more time and peace of mind to be creative and get on with the creative delivery and execution of great business ideas. This nimble approach enabled Bison Beer you to buy as much quality beer as it could afford to deliver on a wonderfully creative idea .

Playing your best game around the tennis

How would you cope with a 400% increase in customer numbers for just two weeks each year? For one of our customers, Wimbledon-based Italian restaurant San Lorenzo, this is exactly the challenge they face. Wimbledon is both a golden opportunity to increase profits as well as being a tough two weeks of trading! Variable costs grow in proportion around peak periods, as do the ensuing PAYE and VAT commitments but overall, it’s very welcome business as an opportunity for the restaurant to run at full capacity and really showcase its potential. The entire staff experiences a salutary jolt and increased earnings, as well as a renewed pride in the restaurant thanks to the many illustrious members of the tennis community who return, year after year.

Using Xero accounting software, San Lorenzo is able to prepare for and adapt to the influx of tennis fans that descend on Wimbledon each year during the tennis Championships. In circumstances that would normally push a small business out of its comfort zone, San Lorenzo successfully becomes the annual ‘tennis trattoria’ and thrives.

Customer numbers increase by 400%

Cash flow improves significantly, allowing money to be saved for the leaner weeks

Centre court rivals, past and present, and members of the tennis community return to the much loved restaurant year after year

Key tip #4: Ensure your business performs at, and looks its best

A few weeks prior to the tournament, San Lorenzo checks stock levels and pre-orders the majority of its product lines well in advance in order to amortise these costs over a longer period. Apart from managing stock levels, the build up usually involves a lot more repairs, maintenance and improvements to ensure they are showcasing the restaurant at its best. Having easy access to real time cash flow makes it easy to make quick decisions on what work to prioritise.

Key tip #5: Getting staffing levels right

To help manage the increase in customer numbers and ensure the team is fully supported, San Lorenzo always doubles up on floor staff. In terms of profit the restaurant finds that the average customer spend rises with people relaxing and exploring more dishes than usual on the menu. With these higher customer levels, cash flow improves significantly.

Key tip #6: Special deals

Throughout Wimbledon San Lorenzo has offers on for set lunch specials, which allows customers to sample different areas of the menu at a reasonable price. It is a great way to get more variety out from the kitchen too and to make decisions on deals and recipes for the rest of the year.

This was posted in Bdaily's Members' News section by Xero .