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7 Ways To Reduce Business Insurance Costs For The Hospitality Sector

24/7/2015

Insurance is a fact of life for all businesses and it's important to ensure the right amount of coverage. You want to make sure that if there is a unexpected and costly incident within your business that it doesn't ruin your business financially. Despite its necessity there are a range of options available to hospitality businesses that want to reduce the cost of their business insurance premiums.

The cost of premiums reflect the probability that an insurance company will need to pay out a claim. It stands to reason then that the riskier the business, the higher the premium. Therefore any cost savings that you are going to make on your business insurance will come from showing insurance companies that you present less risk and a reduced probability that they will need pay out a claim. What follows is a number of suggestions to lower your business risk and reduce the cost of your business insurance premiums.

1. Install Risk Reducing Equipment.

One way to lower the cost of your premium is to check what discounts are on offer for installing items that lower your insurance risk. These items could include:

A burglar alarm
A fire alarm
Sprinklers

If your alarm systems are monitored 24-hours with an immediate response to any incident then you are more likely to qualify for a discount.

2. Prevent Injuries

Take steps to reduce the risk of incidents like slips and falls. If you can demonstrate the steps you have taken and provide evidence through things like documented policies and a log book, that injuries have been reduced or eliminated because of the steps you have taken, then you are more likely to receive a reduction in your insurance costs.

One simple method of doing this is to ensure that regular maintenance work is carried out on your premises. Ensure your restaurant or cafe has eliminated tripping hazards like loose rugs and wires as well as cracked pavement if you have an outdoor dining area or car park. Another area to consider is lighting. Ensuring corridors, stairs and outdoor areas are well-lit to reduce the likelihood that you will need to make a claim.

3. Bundle Your Policies

If you have a number of different policies across a number of different insurance providers then you might qualify for a discount if you bundle your policies together with one company. Just as a phone provider offers discounts for internet and phones the same is true with insurance.

4. Increase Your Excess

There is an argument to be made for increasing your excess to reduce your business insurance premium. By doing this you want to ensure that you can comfortably meet any excess payment in the event you do need to make a claim. However if you have taken other steps to reduce your risk and you reason that you are now less likely to make a claim then this strategy can make sense.

5. Analyse Your Policies

In most cases hospitality business will have more than one insurance policy. This leaves open the possibility that there is duplication in what is covered or even irrelevant clauses that aren't needed for a cafe or restaurant business. Carefully examine your policies to see if this is the case. This is especially true if the scope of your business has changed, especially when it comes to operations. It may be that you are covered for things that are no longer apply to your business.

6. Update Your Policy Details

As well as checking your existing policy when the operations of your business change, the same should be done when key employees change roles or leave your business. Examine your existing policies to ensure that those named on your insurance are still in the same role or with the business. Significant savings can be made when a higher risk employee is taken off an insurance policy and an employee with a lower risk is added. Hospitality businesses who have delivery vehicles should be particularly mindful of this avenue to cut the cost of insurance premiums.

7. Seek The Advice Of An Insurance Broker

There are a vast range of insurance providers and different insurance products available to hospitality businesses. To wade through this often complex maze it is a good idea to seek expert advice from someone who knows the industry well. An insurance broker will be able to give you advice on a range of different products, prices and policy coverage. They can identify what exactly you're covered for, where there might be gaps or where there is duplication.

Many hospitality business owners go out and find insurance on their own thinking that will save them money. However they lack the expertise needed when shopping around for the most cost effective insurance option. This can lead to a restaurant or cafe with the wrong type of product for their needs. Insurance brokers are usually free so it makes sense to use their advice.

Bonus Tip: Join A Trade Organisation

Hospitality business owners looking to save on business insurance premiums should look to trade organisations or professional associations that they are members of for a better deal. If your not a member then it's worth investigating wether discounts on business insurance is a benefit of joining. Many of these organisations have struck deals with insurance companies and members can make use of significant discounts on top of the networking opportunities these associations present. A win-win outcome!

We'd love to hear your thoughts. Are you a hospitality business owner who has a tip they can share on insurance costs?

How To Cut Food Waste In Your Restaurant

16/7/2015

Benefits Of Cutting Food Waste

The need to cut food waste in the foodservice industry is made plain by the statistics. Hospitality Magazine cites a study that found the industry was the biggest contributor to landfill. In 2013 this level had reached 661,000 tonnes.

The issue isn't just a morale one however. Food waste also affects a restaurants bottom line. A US study found that 11.3% of the total amount of food purchased for a restaurant was thrown away. Food costs are the second largest expense for restaurants after wages. Just imagine the savings you could make if you were to reduce wastage by 10%.

The moral and cost-saving arguments aren't the only benefits of cutting food waste either. Promoting your sustainability can be a point of difference with your competitors. It can also increase employee morale where staff feel like they are part of a business that is playing it's part and contributing to the great good.

Here are 10 ideas that you can implement in your restaurant or cafe to cut food wastage.

1. Conduct A Waste Audit

The first step your restaurant should take in its attempt to reduce waste is conduct an audit. Where is the waste coming from, what is producing the most? One way to make this easier is to have separate bins for different types of waste. You then need a team of employees to go through and record the types and quantity of waste being produced in your restaurant. Cross-reference this with a review of invoices and any other food delivery documentation. By doing an audit you are better informed about the waste your restaurant produces. This will save you time, money and lead to better results.

2. Change Your Menu

Once you have completed a waste audit you should have identified the menu items that produce the most left overs. Perhaps the item is not selling well or the portion size is too big. You can either decide to eliminate the item or reduce its size. Either way you are reducing waste, reducing food costs and as a result increasing profit.

3. Store Food Properly

Storing food properly is a quick and easy way to cut food waste in your restaurant. Ensure all food is kept in a box or food packaging wrap. Reusable storage containers are preferable as they cut down on items like cling wrap that get thrown out. To prevent spoiling ensure all food is kept at appropriate temperatures and pre-cool hot items to reduce the likelihood of bacteria growth.

4. Store Fruit and Vegetables Separately

We thought this deserved its own heading. Did you know that fruit gives of a ripening agent that can prematurely ripen and spoil surround foods? So Store your water mellon and strawberries separate to your lettuce and tomatoes to prolong their life.

5. Label and Manage Your Food

As well as storing your food properly you should ensure proper labeling and management so that food is consumed before spoiling. Food labels should be clear and easy to read. Ensure you include important details such as:

What the item is
When the food arrived
The used-by or best-before date

Once the food has been labelled ensure that you manage the way in which food is used. Place new items behind older ones to ensure older items are used first. Another system is the "right to left" rule. Store newer food to the right of the fridge while older food is taken from the left.

6. Portion Control

As mentioned briefly above, portion control is a great way to cut down on food waste. Greenwise Business points to a study that show a third of diners leave food on their plate when eating out. Tips to counteract this include:

Staff should use portion control scales to ensure the correct amount of food is being served. This will also help you manage ordering and food costs better.
Give diners the option of different portion sizes.
Use small plates and glasses
Set smaller plates but serve food on larger ones. Portions will look bigger that way.

7. Buy Only What You Need

It may seem like an obvious suggestion however impulse decisions and poor planning often get the better of us. Often a supplier will offer discounts on products and the temptation is to stock up at a good price. Of course if you fail to use the ingredients before their use-by then the savings quickly vanish and it can cost you more. If you do want to take advantage of sales or discounts then it is worth asking whether you can get products delivered at various stages of ripeness or even spread out deliveries.

Also ensure you know exactly what you need before placing orders. That way you don't double up on items or find yourself with more of a particular ingredient that you need because you failed to plan what you needed.

8. Gain Buy-In From Others

A key thing to remember is that cutting down on food waste requires a team effort. Educate your team about the importance of cutting food waste and the benefits of doing so. Ask other stakeholders in the business including customers and suppliers how you can work along side them to minimise waste.

9. Create Specials From Soon To Expire Ingreidents

If you begin to anticipate that you won’t sell a certain item before it spoils, creating a temporary pricing special will help you make use of the product and achieve a profit.

10. Donate Food You Will Not Use

As a humanitarian alternative to the last tip, send unused food to the Food Donation Connection which supports those in need. For more information, please visit

7 Tips For Business Success in the New Financial Year

7/7/2015

1. Reflect on the past year.

The start of the new financial year is a good opportunity to reflect on the year just finished. Take the time to analyse what progress has been made over the last 12 months and where your business stands today. Ask yourself things like

What did my business do well?
What can my business improve on?
Did my business achieve last year's financial objectives? Why/why not?

It is around this time of the year that business will have a clearer picture of where they have spent money over the last 12 months. Do you plan to spend more in some areas this year? Are the areas you can cut costs?

Also look externally to areas such as your relationship with suppliers. Is there opportunity for increase collaboration or should you be looking to form new relationships? What are your competitors doing? How do you stay ahead and maintain innovation in your business?

By taking stock of the past financial year and asking yourself these types of questions you are better prepared to tackle the year ahead.

2. Look around for new ideas.

Once you have a good grasp of the past financial year, you are then in a better position to look around you for ideas to incorporate into your plans for the new year.

These new ideas could be ways to increase revenue or cut costs. On the revenue side these ideas could cover new products or services, customer service ideas or marketing initiatives. On the cost side ideas could centre around supply chain or product sourcing efficiencies.

Inspiration could come from your closest competitors, business in similar markets overseas or even business in other industries. What are they doing that's working well? Can you incorporate aspects into your business. Also ask yourself what are they not doing? Are their opportunities out their that your competitors are not taking advantage of?

3. Update your plan.

You've looked back at the past year and looked around for new ideas, the next step is to plan for the year ahead. The first task is to set new goals and objectives for your business. These could be financial objectives, marketing objectives, employee objectives, anything that you want to work on in the next year that will improve your business.

Once you have a set of objectives the next step is to prepare a plan for implementation. When will certain activities will need to take place and what are the key dates to ensure objectives maintain on track to be achieved?

Another thing to consider is government programs designed to help small business. Check out business.gov.au to see if you qualify for advice from experienced business experts.

4 Get your tax done quickly.

The end of financial year is a busy time for many business but it is important to take care of tax matters quickly.

One advantage of getting your tax affairs in order sooner rather than later is that you can get a better idea about the amount of tax you will have to pay/have refunded which will be important for cash flow planning.

Another advantage is that you will able to sit down with your account and go over plans for the next financial year. As part of your tax planning you may want to discuss the $20,000 instant asset write off and other small business initiatives announced as part of this year's Budget.

Getting on to your tax quickly will also ensure you don't miss important deadlines including BAS and superannuation lodgement due on July 28.

5. Stay close to your employees

The end of the financial year presents a good opportunity to provide feedback to employees on how the business is performing and how they have helped achieved the results. Employees will appreciate this opportunity and feel valued for being acknowledged. Share plans for the next year as well and make sure they know they are critical to achieving the following year's business objectives.

Having a committed team of employees that have a clear idea of where the business is heading makes the likelihood of business success far greater.

6. Embrace Technology

If you haven't yet, then you should plan for this year to be the one that fully embraces the move to the digital economy. Consider areas where you could save time and cut costs:

Have you embraced social media?
Do you have an online store?
Is your website mobile friendly?
Do you do your accounting online?
Have you thrown away your cash register for a POS system?
Is there an app that can replace manual/repetitive tasks or improve processes?

7. Celebrate the past year's success

Running a small business is no easy task and sometimes it is hard to find time to take a break. However taking time out is critical to recharge both physically and mentally. Ensure your celebrating key business wins along the way. Make employees part of that celebration. Doing this will renew your energy and focus and make employees feel valued and acknowledged. It will help you achieve greater success in the financial year ahead.

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