After seeing that the Heineken-owned Star Pubs and Bars are looking to add another 100 new pubs to its Just Add Talent – its managed operator business – by 2026. Alongside a wide variety of other hospitality businesses looking for dramatic expansions over the next few years. It got us thinking about the expansion of SME businesses within this sector and the effect that this expansion has on their finances.
Over recent years, pushed further into our view by the pandemic, there has been a demand for hospitality businesses to expand. This can be moving into new locations and countries, or even buying up smaller companies, like we’re seeing with Just Add Talent. This method of expansion is, quite obviously, looking at large businesses, and is not viable to smaller businesses looking to expand themselves and their services whilst remaining local.
On a much smaller scale, SMEs often find themselves needing to put themselves one step ahead of their competitors by adding something extra. This includes pubs looking to expand into accommodation. With the popularity of staycations on the rise even before the pandemic, offering a unique stay in a local pub is a great way to drive tourism and profits.
Expanding your business sounds simple enough and is a great way to encourage more customers into your establishment. Though these expansions shouldn’t be taken lightly. You’ll need to look into the cost of setting up these expansions, the cost of running them and the need for the services they provide in your area. If the hotel chain down the road is offering much more affordable services, for example, offering 2 bed and breakfast rooms might not be the best expansion choice for your business.
Things like booking systems and even advertisements for your establishment are often overlooked as key components needed in a successful accommodation expansion. Think about it, would you stay in a place you can’t even find online? Let alone find any reviews for? Not in the 21st Century, I don’t think.
When have all these systems and practices in place, it is important that you understand the financing of it all and whether you can genuinely afford to begin this expansion as a business. Especially as the initial costs are often very high.
Luckily, you’re not alone. Here at etc finance, we’re expert financial advisers and can help you create a budget and draw up exact financial plans so you know where your money’s going, what it’s going towards and the ROI you should see from this business expansion.
Click here to see how etc finance can help your business expand.
