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Tips on working with suppliers Re-opening Operations

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You should all have worked through a comprehensive plan to re-open by now, however we thought it timely to remind you of a few things needed to succesfuly negotiate this next period.

Successful restauratuers have a strong relationship with suppliers. On the radio  the other day Al Brown said ‘staff and suppliers are family’. That is very true, they essential to your business. It is important to remember that many suppliers will be in the same position as you, particularly the small operations. They will have had little or no turnover recently. They may have suffered severe losses through having to dispose of perishable stock. They have had to pay staff and of course many of them will have a large amount of of overdue debtors and probably creditors too. They will have been thinking of ways to minimising any further credit risk and will be loathe to extend credit. Having said that, they need sales, so work out solutions that suit both parties. 

The last few weeks will have been a severe drain on your available working capital and reopening will compound that, particularly as you re-stock following shut-down. The following are some tips to help you through.

  • It is most important to communicate with your suppliers. Let them know what you intend to do with your business and how you intend to pay them
  • You want to be here for a long time, how you treat suppliers and how you are treated will be remembered in the future.
  • If you have outstanding debts, pay what you can. For the balance set up a payment plan you can afford and stick to it
  • Some suppliers will be more flexible than others, prioritize who you need and who is prepared to work with you
  • Some may require credit card payment. Ensure you can pay off the balance when it falls due. As you all know, credit card interest rate is a killer
  • Ensure that staff who place orders understand how important it is to keep stock levels low as possible
  • Think about your par levels. You may not need to hold as many supplies as you used to.
  • Think about selling stock you have paid for at reduced margins. For example, reduce the size of your wine cellar by selling a more expensive wine by the glass rather than ordering in more. 
  • See if wine merchants will supply wine on consignment, particularly more expensive lines
  • We probaly don’t need to remind you but it is vital you rigorously budget menus. You may have been doing takeaways or meal kits under level 3, work out if the demand makes them profitable and worth continuing with.
  • Check with suppliers to see if they have product available at reduced price. For example a butcher might have frozen cuts at lockdown that are suitable for braising or slowcooking
  • See if there are oportunities for cross promotion. Perhaps an oyster suplier can share where their product is available on their social chanels and vice-versa
  • Budget essential service spending. Do you need to have the rangehood grills cleaned off site or can you do it yourself?
  • Ensure you focus on retaining your core team while tightly controling staffing costs.
  • Keep a very tight control on discounts and comps. Ensure staff fully understand your expectations. While you might wish to welcome your customers back with a complimentary glass of bubbly, ensure that it doesn’t cost you anything, maybe work a colab with your wine supplier. 
  • While the subsidy is in place to help with wage costs, focus on paying down as much debt as possible. It will be much more difficult to do so when your wage costs rise again
  • As difficult as it may seem, think about putting aside some cash in case covid flares up and we have to go back into lockdown.   
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