Caribbean restaurant Rhythm Kitchen switched from generating most of its sales from eat-in customers to takeaway dominating its trade. That’s meant managing director Delroy Dixon has to keep a close eye on his margins.
Before the crisis, Rhythm Kitchen mainly served eat-in customers at its restaurants – only 30 per cent of its business came from takeaways. The ratio has now switched, with takeaways making up nearly 60 per cent of business.
“We use the delivery platforms available: Uber, Just Eat and Deliveroo. They’re charging up to 35 per cent, which doesn’t leave much room for yourself. If you think, I’ve taken £1,000, then £350 of that is going straight out to the delivery operator,” Delroy said.
“It’s difficult not having a large number of eat-in customers where the margin is better. But you just have to hope that you’re turning over enough cash to mitigate your losses.”
Stepping back and looking at the big picture
Delroy used time off during lockdown to work with his co-founder and think about food pricing and how the business is structured. It’s helped him to be proactive in making changes to reduce the lost margin.
“We did a lot of work that in the day-to-day running of a small business you might not have time to do. I looked at pricing and I looked at margins. I looked at what we sell – if we were paying a bit much for something, should we take it off the menu and put something else on? How can we manage this particular item a bit better?
“It gave me that thinking time which you’d never normally have. You don’t really have time to do some ‘quality work’. You always think, ‘I’ll do that tomorrow’, but tomorrow never comes.”
Focusing on what you can control
Delroy has increased prices on delivery platforms to cover the percentage being lost. The number of employees has been reduced from 40 to 30, which came from a mix of natural progression and the crisis.
For the near future, he’s concentrating on streamlining how the business runs.
“There are not many things you can control in the business. There are the prices, if people want to pay them, and the labour. Manage your labour a bit better and it helps on the bottom line.
“If you can increase your turnover, you’re in a good position to survive this. Seeing your turnover increase gives you so much confidence. As long as there’s not a second lockdown, I can see the business growing and us looking at other opportunities.”
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