Secrets to Hospitality Success Unveiled
Female, baby boomer with a supply of working capital and a coffee machine – that’s the profile of a hospitality success story, according to a new industry index.The inaugural Hospitality Industry Success Index (HISI), developed by national equipment financier Silver Chef, was unveiled in Brisbane last Thursday (1 July).
The national report provides an insight into the health of the hospitality sector and has found the industry is not as risky an enterprise as public sentiment suggests.
It revealed more than 90% of hospitality businesses succeed in the first 12 months of operation. The key ingredient for their success is working capital.
HISI data also showed that businesses with less than two years’ trading history are more successful than those with between two and four years’ experience, while small businesses are struggling to compete against well-backed franchise offers.
Other key findings showed:
* Coffee machines are the most successful hospitality asset, confirming the popularity of coffee in Australia today;
* The so-called “Slacker” Generation (Gen X) has grown up and is strongly competing with Baby Boomers, who are the most successful in the hospitality stakes;
* Women win the hospitality gender war recording a higher business success rate than their male counterparts; and
* The Western Australia resource boom is driving a thriving hospitality sector while Queensland has emerged as a strong contender on the Eastern seaboard.
Silver Chef Chief Executive Officer Charles Gregory said his company was in a strong position to present a detailed commentary on the state of hospitality to the industry.
“For more than 24 years, Silver Chef has helped thousands of businesses get their start through our Rent-Try-Buy® financing model,” Mr Gregory said.
“We have delivered more than $100 million of Silver Chef-funded equipment to the hospitality sector from the corner café to five star restaurants.
“We have found that more than 90% of businesses who use the rental equipment model retain working capital and are able to manage the challenges of a growing business.
“The hospitality sector is a major provider of jobs and is crucial to both the Queensland and national economy.
“This data shows that with good research, working cash and entrepreneurial drive, small business can develop and prosper.”
Hospitality entrepreneur and Director of Vapiano Australia, Will Cooke, said the core findings of the HISI report mirrored his observations gathered during 25 years’ industry experience in Australia and across Europe and the UK.
“I have been fortunate to see what it takes to be successful in the hospitality industry before bringing Vapiano to Australia, and while I don’t fit the typical mould of what the HISI report has revealed, I believe there are certain ingredients that help build a successful hospitality business,” Mr Cooke said.
“Certainly having strong working capital following Vapiano’s opening in Brisbane last year has held us in good stead, and I’m confident it will be the same as we go to open new venues on the Gold Coast and Sydney in the coming months.”
Mr Gregory said the HISI report would become an annual feature on the industry calendar.
The findings are based on data gathered across more than 3000 contracts and 2012 customers over a 12 month period from 2008.