SENIOR’S SOLUTIONS NUMBER 21
These are tough times and it’s hard to push sales ahead of previous seasons. In this climate, cost control and good buying are critically important, says Grahame Senior
How to buy well (or a least better)
in the new restaurant are certainly on top of their game. Most importantly, it was more or less full on a summer Wednesday lunchtime. Not many large new ventures can say that. Of course, the current perceived wisdom is that while things are busy in London, the situation throughout the rest of the country is not so rosy. In the last article, I wrote about
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three areas for consideration in these tough times; purchasing (getting better value); pricing (giving better value) and staff utilisation (getting better value from your key asset). You may be interested to know that I have taken my own medicine and put in hand a positive action plan in each of these three areas at Howard's House, the hotel we operate at Teffont Evias in Wiltshire. This month I thought that I would share some of our expe- riences in one particular aspect – purchasing. Containing the costs of what you buy certainly has to be a top priority for any business.
You are not alone When it’s tough to hit targets, it’s important to remember that much the same applies to everybody in the mar- ket, not just the operators but also the suppliers. In such a climate, all
had lunch with Leisure Management’s editor, Liz Terry, the other day at Gilbert Scott (see case study). It was a pretty good experience and the team
your suppliers are highly motivated to hang on to your business and keep you satisfied. Keeping your business is a lot easier than try- ing to win someone new. That reality can create some surprising oppor- tunities, and certainly encourages a less than arrogant attitude to
costs. No one today looks down their nose at someone trying to get a deal.
Don’t be afraid to ask
Whenever any supplier quotes a price, you can be pretty well sure that they’re giving you the figure they would like to achieve, rather than one they nec- essarily expect to achieve. Nobody likes a sucker and they certainly do not respect them. If you roll over and accept first price offers from any sup- plier, their private attitude towards you may well be unflattering. Conversely, if you are tough and demanding on pric- ing and quality, they’re more likely to respect you and want to keep your custom. Businesses that are tough on costs tend to survive longer, and all suppliers want continuity of custom. There is an interesting war going on at the moment in the mineral water business. There has been something of a backlash during the recession about the use of bottled water and sales generally are down. At the same
THREE KEY DISCIPLINES THAT HAVE WORKED FOR US:
1 Question everything. Explore the exact specification of every product and service and ensure that you are getting the best quality at the best value and on the best terms.
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2 Get on the same side. Approach your suppliers as partners in a dif- ficult and challenging environment. Work together to get the best deal for both of you.
Read Leisure Management online
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3 Pay on time or early. Stick to payment terms. Never have to be chased, raise queries immediately and explore the opportunity for prompt payment discounts.
ISSUE 4 2011 © cybertrek 2011
Get on the same side Being professional about price doesn’t mean being antagonistic. Good negoti- ation with suppliers can start by being consultative rather than challenging. “It’s tough for us all, so how can we make things work for both of us?” is a better approach than “Your price is too high – you’re ripping me off”. An assumption of civilised cooperative behaviour often engenders exactly that.
Become someone they want to be with In tough times, people respect strong and professional businesses. A busi- ness that knows what it’s doing and takes everything seriously is one that will survive and even prosper. A night- mare for all suppliers is businesses that close down and leave debt. Being ahead of the game about cost control
time, there’s a big- ger than ever range of suppliers with expen- sive bottling plants and ambitious growth plans. So some unexpect- edly good deals are out there on the market. Even if you’re happy with your current sup- plier, it’s well worth asking if they are actu-
ally giving you the best deal possible. “I don’t want to change, but...” can be a good opening approach.
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