Looking for savings behind the scenes

All money is equal when it leaves the bank account, whether it’s paying for a case of fine wine or a case of dishwasher tablets – and so it all deserves the same careful thought when it comes looking at the ways a catering and hospitality business can manage costs.

The principle that ‘All budgets are equal” is the fourth of “the Seven Habits of Highly Effective Purchasing Teams’, the new insight guide from Lynx Purchasing that dtails seven proven ways that businesses can make simple improvements to their buying.

With the sector continuing to face a range of costs such as business rates, the living wage and workplace pensions, at a time when consumer spending seems set to be subdued for some time to come, anywhere that savings can be made is useful

The costs that are clearly visible to customers are often the first port of call for a business looking at where to manage its costs. The Lynx Purchasing Market Forecast makes regular recommendations based on pricing trends and seasonality, such as switching to alternative cuts of meat and working with suppliers to use a wider range of fish species.

However, there are many necessities, such as cleaning products, pest control and lighting, which are essential to running a hospitality business but, since they are not front of house, often escape the same level of supplier and budget scrutiny.

This means that businesses could be being overcharged in many areas of back of house spending from administration to housekeeping. There can be many reasons for this, such as not using specialist suppliers, buying ‘name’ brands instead of suppliers’ own label products with the same specification, or just getting too cosy with established suppliers and failing to shop around to find out what products and prices are out there.

One good example is office stationery  – an expensive range of items that are all too often left to a junior employee to manage, order and buy – usually from the same supplier that their predecessors used.

This was the case with one of our clients, a care home operator who had used the same office stationery supplier for a very long time, without ever comparing prices with competitors.  We did a like-for-like comparison and found a new supplier that saved them £4,000 in the first year alone on paper, pens and other stationery items.

Making a change and adopting new habits in these back-of-house areas could be an easy way for managers to save money, with fewer loyalty issues or sacred cows involved – and little or no impact on front of house for customers to notice.

ACTION: Review your back of house spending, and make sure that your team stays as focussed on these costs and budgets as front of house costs to achieve maximum savings across the whole business.

You can download a free copy of the Seven Habits of Highly Effective Purchasing Teams from our website at  https://www.lynxpurchasing.co.uk/seven-habits-highly-effective-purchasing-teams/. We’ll also be looking at the fifth effective habit, ‘all budgets are equal’,  in our next blog.

If you want to find out more about how you can tap into the experience and expertise of the   Lynx team to help you make the most of the Seven Habits of Highly Effective Purchasing Teams, email us at savings@lynxpurchasing.co.uk  or call 01325 377 845.

The latest edition of the Lynx Purchasing Market Forecast is available to download at https://www.lynxpurchasing.co.uk/purchasing-expertise/market-forecasts/

 

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