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Pizza on fire: Great ideas in a cash flow crunch

Great ideas in a cash flow crunch


April 7, 2009
By Tom Stankiewicz

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There are key things a small business can do to minimize losses over
the next year. They will require you to look very closely at your
current business model and find creative ways to make it even better.
If you have already noticed a decrease in sales this year, do not panic
as that will only result in rushed decisions. As small business owners,
most of us don’t have a lot of extra cash put away for a rainy day, our
budgets for advertising are pretty limited, and it is more difficult
for us to obtain credit.

There are key things a small business can do to minimize losses over the next year. They will require you to look very closely at your current business model and find creative ways to make it even better. If you have already noticed a decrease in sales this year, do not panic as that will only result in rushed decisions. As small business owners, most of us don’t have a lot of extra cash put away for a rainy day, our budgets for advertising are pretty limited, and it is more difficult for us to obtain credit.

The first step is to review your cash flow and determine where you can cut some costs.  Your fixed costs, such as rent, will most likely stay the same unless your lease contract is coming up for renewal. If that is the case, you could use the current economic slowdown to your advantage and try to negotiate a better rate. The landlord might be willing to negotiate with you right now, as it would definitely be more beneficial for him or her to have that space occupied rather than become vacant. In the event that you are forced to close or re-locate your business due to high rent, it might not be easy for him or her to find a new tenant in a recession. Just by looking around your area, you have probably noticed that not too many people are willing to invest in opening a new business right now. 

I heard of some business reducing their hours of operation in order to cut costs. It’s true that it will lessen how much money you will have to pay in wages and lower your hydro bill at the end of the week, but carefully weigh whether it really make sense for you.  Reduced hours mean less exposure to potential clients and that could translate into lost sales. However, this could be a reasonable solution if you know that you’ve always had minimal traffic during certain hours and now it has been reduced to zero. Otherwise, keep your hours of operation the same because customers are used to you being open during certain times. 

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This is also a good time to stick to what has worked for your business in the past. For example, you can easily identify specials that have been more popular than others, such as family meal deals, pick up promotions, etc. Rather than advertising new deals, concentrate on the ones that have generated extra sales in the past. There are obviously good reasons why your customers prefer those versus others.

You can be creative by adding small incentives to your pizza orders. For example, what works well for many pizza businesses is to add a free order of garlic bread or salad with a regular order of pizza. In the summer you can twist it a bit and change the offer to free ice cream. At Bondi’s, we have been researching an interesting idea that we plan to start bringing in over the next few months. We would like to offer our clients a chance to come in and make their own pizza from scratch. This would be in a form of a class that they would sign up for ahead of time. We’re hoping that offering such a hands-on experience shows our clients the whole process of making a pizza while gaining their trust and loyalty.

As well, be more selective in terms of what changes you will implement today versus six months from now. For instance, if you noticed your sales drop in the last few months and cash flow is a bit of a problem, you wouldn’t want to start expanding your business by adding additional space to it. It might be wise to wait a bit, assess the situation, and then decide if you still should go ahead with it.

Cutting costs also means looking for different ways that you can use your employees to run the business more efficiently. Most employees are eager to learn something new to add to their existing skill set. After all, doing the same thing over and over for a number of months or years can become a bit boring. Some people get so good at their jobs that they do it without thinking about it. This might be a perfect opportunity to teach them something new and add some variety to their daily routines. If you find yourself in a situation where one of your employees leaves, you may find you can teach your existing staff to cover the work instead of hiring someone new.  It could be as simple as teaching someone to take orders over the phone in addition to their existing duties of preparing pizza. In the fast food industry, it’s always good to train everyone to know how to do everything. If one of your employees calls in sick or doesn’t show up, you know that there are other people who can fill in on the spot. It will give you peace of mind that the business will run smoothly no matter what and your clients won’t notice a difference in service.     

Come up with some positive solutions and creative ideas to get your business through the next year.  Don’t let your business freeze in time. Find ways to add value to what you already offer at a minimal cost to you.

Tom Stankiewicz has been in the pizza business for over 15 years. He has been the proprietor of Bondi’s Pizza in London since 2000.


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