Key steps to implement procedures around your technology

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The UK’s hospitality industry is one of the business world’s most dynamic market sectors, worth over £60 billion and directly employing 1.5 million people. It is also one of the most competitive. Operators, 80% of whom are small and medium-sized hospitality enterprises, have to fight hard for the 40% of the leisure income we spend drinking and eating out.

The rewards are high for leading multi-site operators, such as those highlighted below, when they exchange hands in multi-million pound deals.

• Famous Brands acquired the 80-strong Gourmet Burger Kitchen(GBK) chain for £120 million.

• The Las Iguanas chain of 41 sites was bought by Casual DiningGroup for £85 million.

• Graphite Capital purchased 14-outlet New World TradingCompany (NWTC) for £50 million.

Like every hospitality retail brand concept, all three started out as independent single site operations. They evolved as scalable brands. Once they were proven concepts, they were ready to be rolled out regionally and nationally.

Independents are very much the backbone, and the future, of the hospitality sector. According to business property specialists Christie & Co’s, eight out of 10 of its restaurant sales are on behalf of private vendors.

While a small number will evolve to become tomorrow’s multi-site brands generating millions of pounds of profits for their investors, the vast majority will strive to grow successful profitable hospitality businesses.

They will do this in an increasingly tough trading environment where operators are experiencing increasing pressures on margins.

Administrative costs, higher food inflation, rising “high street” rents and increases in the minimum wage all impact on the bottom line.

To combat the attack on margins, the best operators are making sure they fully harness the power of technology based around integrated EPOS solutions.

It is vital for operators to understand the opportunities associated with technology - just as they appreciate the importance of a great guest experience, consistent high standards, impeccable service, quality training and staff empowerment.

After all, successful operators appreciate technology systems are as integral to an operation’s success as the ‘look & feel’ and marketing of the brand.

However, the technology can only ever be as good as the procedures and processes embedded around it according to EPOS experts GS Systems, who provided EPOS technology for Living Ventures, the developers of the £50 million NWTC brand.

Failure to use technology effectively leaves enterprises operating at a distinct disadvantage and makes it difficult to realise a brand’s full exciting potential.

Two statistics from Gunter and amazon.com reveal it is a common problem for technology to be underused.

• 57% of people who buy software NEVER use it• 83% of people who start to use software NEVER use it again

Our experience at GS Systems reveals the most successful businesses use technology better than their competitors. Living Ventures is a classic example. We worked very closely with Living Ventures as it grew from a two-site operation to over 40. As LV’s technology partner, we have seen first hand how the business consistently develops, proves and grows desirable hospitality brands that are sold on at a premium prices.

4Key steps to implement procedures around your technology

But how do you make sure you use technology effectively?

Here we highlight FOUR essential tips for entrepreneurs wanting to optimise their investment in technology and mirror the achievements of world class operators like Living Ventures.

Setting up a fully integrated EPOS-based technology solution requires a lot of effort - and a big commitment in terms of time, energy and resources.

The starting point for any successful system is a review, or a needs analysis audit (NAA), to identify the current status and challenges facing a business.

By interrogating all aspects of a business, operators can identify how to monitor and benchmark their performance and maximise margins.

Most importantly, an NNA articulates how EPOS-based technology can help an operation grow in the short, mid and long terms.

For instance, watertight stock control and intuitive labour management apps allow operators to manage the two biggest variable operating costs that are most vulnerable to external influences.

As well as the technology protecting costs and margins, it also facilitates the increase of a customer’s spend per head.

Activities such as smart up-selling prompts and loyalty campaigns are easily run through an EPOS solution. These generate extra revenue and also add value to the guest experience.

A simple EPOS-based gift card programme can increase sales by 30% versus existing paper card solutions. Mature programmes can deliver between 3-5% of a total hospitality company’s revenue.

These are impressive outcomes but they only happen if everyone believes in the technology. When setting up a system focus on a common sense approach. Don’t try and do too much. Be clear about strategic objectives and tactical plans to achieve them. And make sure you adhere to them.

Remember, consistency is essential to perfect a scalable technology solution. Once this is established, it is ready to be rolled out to other outlets as the technology is easily replicated.

From day one, ensure all operational procedures are embedded around the technology. Automated robust watertight processes will eliminate duplication and human error and ensure accuracy as data flows around the business.

For instance, GS always recommends operators implement pre-dispensing policies. This ensures food and drinks can only be dispensed after they have been inputted into the system once orders have been placed by customers.

Every single sales transaction and stock movement, without exception, must be tracked and recorded, ready for real-time analysis anytime day or night. This is the only way an operator is able to guarantee accurate reports and performance statistics. The more sales transactions and stock movements are missed, the greater the negative impact on margins.

A similarly robust approach applies to cash, stock and recipe management, marketing and sales promotions, online shopping, loyalty programmes, e-commerce, human-resources, web reporting, payroll and accounts.

3: Make sure you control data flow for real-time performance monitoring

An effective integrated EPOS solution automates and controls the data flow of hundreds and thousands of transactions for real-time benchmarking.

1: Be prepared to invest time, energy and effort in technology

2: Ensure watertight automated procedures are embedded around the technology

Managing data flow effectively via key performance indicators (KPIs) allows operators to constantly monitor and reconcile business activities on a monthly, weekly, daily or hourly basis.

KPIs include gross profit margins (the money being made) and staffing costs (the most expensive variable expense).

Reports fed by accurate, timely data flowing through the business, give site managers and head office directors the necessary trustworthy intelligence they need to make the right informed decisions.

4: Activate automated red light warnings

When an EPOS-based system is set up or configured, performance parameters are established. If these are exceeded, red light warnings can be immediately triggered.

As soon as they are communicated live to the appropriate managers, they can be rectified in a timely fashion.

Examples include customers going over pre-agreed table spend limits, overstaffing during quiet trading sessions and sites holding excessive cash floats beyond agreed amounts. Automated real-time red light warnings are effective preventive measures. They allow operators to nip potential problems early before they can inflict serious financial and reputation damage on a business.

Make sure you think about these four steps when you are planning your next technology investment. They are essential if you are to establish a technology platform for success and sustainable growth… Better still, contact the EPOS experts at GS and see how we can help you. Call us on 0800 655 6264.

GS Systems Limited is registered in England. Company registration number 3288521. Registered Office: 119/121 Buxton Road,

Stockport, Cheshire, SK2 6LR

We have a proven track record providing and implementing EPOS solutions that help businesses grow.

Each solution embraces three essential elements: EPOS software, hardware and consultancy support services and advice.

They not only improve front of house and back office management but also open up new revenue streams and marketing initiatives.

Our clients includes the UK’s highest grossing restaurant outside of London and multiples featured in the Sunday Times FAST TRACK 100.

gs-systems.co.uk