75% of failing pubs and restaurants can be saved, says industry mentor

20th September 2010, 2:26pm

David Hunter, a Hospitality Business Mentor, firmly believes that three quarters of the failing pubs and restaurants he meets could be saved with the right focus, processes and management techniques.

According to the Beer & Pub Association 39 pubs were closing each week as of February, 2010.

Hunter said: "The greatest challenge faced by most failing hospitality businesses is a lack of commercial understanding in the management team. People open a restaurant because they can cook or run a pub because they enjoy being a host. These are vital skills but they are not enough without the essential business acumen that keeps the management elements flowing.

"In most cases there is a lack of understanding and awareness about simple accounting procedures such as profit and loss, and cashflow. Too often, businesses don't even have monthly P&L Accounts, as I would recommend – most are disappointingly only doing this annually. You just cannot pick up problems in time from an annual P&L. Profitability is key, and is often under-analysed, meaning that the operator doesn't know where he needs to improve things.

"Poor stock control is a problem, including both over and under-ordering – both of which can cause problems with customer satisfaction. And finally there is poor staff management, whether it is the wrong staffing levels, or the wrong people, it can be a disaster for any establishment."

Hunter firmly believes that following a few key rules and focusing on the management side of their business up to 75% of the pubs and restaurants in the UK that are currently struggling could well be saved through better management.

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