The Business Inspector is a 4 part series which is shown on Channel 5 on a Wednesday night at 8pm. The show is presented by Hilary Devey and began on Wed 17th March. Shows to follow are Wednesday 31st March and Wednesday 7th April 2010.
Each week Hilary Devey acts as a business inspector to two small businesses who are struggling to survive.
This week Hilary visited a go-karting company ‘Premier Karting’ and a cocktail bar ‘Mokoko’
The karting company was struggling to bring in any new business and owner Derek who had invested all his life savings into the business openly admitted they were running dry. They business had lost £15,000 that month and a total of £145,000 in the previous financial year.
Derek had targeted his product/service at the corporate market and was not actively bringing in any new business.
On Hilary’s first visit to Premier Karting she did not reveal her identity rather she posed as a potential client. Her first impressions of the karting centre were that the premises were dull and shabby and she recommended they give it a face lift using the resources they had.
She was surprised that the owner of Premier Karting, a business with high fixed costs, refused to offer her a discount. She later asked ‘Is it not better to offer your service at a discount rather than provide no service at all’
Hilary recommended that Derek look outside of the corporate market as the recession had dried this market up. When she brought in her marketing expert they quickly discovered that Premier Karting had been the track that led to the success of champion driver Daniel Mc Kenzie. Exploiting this, the karting company organised an open night where Daniel Mc Kenzie made a public appearance and they offered a special discount to those attending. The event proved to be a success and put them back on the road and moving in the right direction.
Hilary had encouraged the business to think outside the box and look at how they could best exploit their product/service and open it up to other markets that they hadn’t previously considered. She also tried to secure a deal with the landlord of the premises to reduce the cost of rent and negotiate a new contract.
The second business that Hilary visited was cocktail bar, ‘Mokoko’. Again Hilary went undercover on her first visit. Hilary was brought up in the pub trade so she knew a lot about this market. She was keen to see their range of cocktails, analyse the customer experience and see how special they made the customer feel.
Jaas, the proprietor of Mokoko believed their bar to be different from other cocktail bars as they offered their clients a higher quality of cocktails by using premium branded ingredients. When Hilary looked through the accounts she pointed out that they could buy their alcohol cheaper by going to the local supermarket. When she asked owner Jaas the unit cost of their cocktails he couldn’t provide her with an answer and admitted that he had never done a stock take rather this is done independently once a year. Hilary pointed out to Jaas that he could save 35p on each drink they made by buying in cheaper products. Jaas was reluctant to purchase cheaper ingredients as he felt it would affect the quality of his cocktails and result in customer dissatisfaction. Hilary suggested they put this to the test and make a cocktail using the premium ingredients and one with the cheaper ingredients. They took 6 people of the street and asked them to sample both cocktails and point out which one they preferred. It turned out that of the six people surveyed only one preferred the taste of the more expensive cocktail.
Having visited the cocktail bar mid-week Hilary was keen to discover why the bar was not busy. She suggested they visit the ‘Roadhouse’ bar, a popular cocktail bar in the city. When they arrived at the bar they watched how the staff entertained the customers by ‘flaring’. When they spoke to a number of the customers they realised it was this level of entertainment that encouraged customers to revisit the cocktail bar.
Hilary was surprised to learn that one of Jaas’s staff already knew how to flare but had never done it for their customers. Following their discoveries Mokoko decided to run a mid-week special and reduced their cocktails to £5 and entertained their customers by flaring. Their first promotion night turned out to be a success and the customers enjoyed the new ambience and atmosphere. By changing their ingredients Hilary worked out that the bar could bring in an extra £7000 a year.
It turned out that both businesses learnt a lot from Hilary’s experience and advice. It gave them the drive they needed to succeed.
Hilary highlights that good book-keeping is key to the survival of any business. ‘It provides a solid system that tells both you and your accountant exactly what is going on in terms of incomings to the business and outgoings. It also helps you keep track of where your business is ultimately going’
Hilary’s Top Tips for Bookkeeping
1. Keep a book
2. Invest in a computer
3. Get your records onto computer
4. Make sure your data is backed up
Fusion Accounts help businesses address all of Hilary’s top tips and with particular emphasis to tip number 4, Fusion provides businesses with an automatic backup of their data giving them one less thing to worry about.
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