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Few businesses experience the joy of uninterrupted, problem-free growth; most hit bumps in their journey.

Why is it that any two businesses in the same industry facing the same challenges can have completely different outcomes?

Why do some overcome challenges and others fail to fulfil their potential?

And what is the key to unlocking business growth?

Over the years, I have observed many different procurement teams across a range of industries.  Whilst most do a good job, only a handful do a GREAT job.  The team at Insider have spent some time researching this and would like to share with you our take on what those top performing procurement teams have in common.

RevPASH (Revenue Per Available Seat Hour) is a great KPI for comparing revenues between different restaurants in a chain and different time periods.

Writing anything about BREXIT without a crystal ball is quite a challenge!

Managers of casual dining chains are challenged by tight margins, high staff turnover, and rising costs. Most will report progress to investors via their P&L and a number of Key Performance Indicators.

Cash flow, RevPASH (revenue per available seat hour), table turnover rate and others are great for comparing progress:

• How did we do compared with last month?
• How does this compare with the same time last year?, and even..
• How are we doing against our competition?

But which restaurant KPIs actively drive business improvements?

The casual dining market works on very tight margins. Added to that, diners demands appear to continually increase on all levels:

• good quality food delivered quickly
• attention to detail regarding food preferences
• authentic experience of different cuisines
• an interesting / entertaining dining experience

And it is against this backdrop, that some are struggling to compete, whilst others are expanding.

So what is it that the more successful casual dining restaurants in the UK do that sets them apart from those who fail?

The concept of casual dining has been around for a while, but in the past couple of years there has been a positive shift in “out of home” dining towards casual dining.

Millennials, for example, spend a whopping 13% of their income on dining out.

According to the FCSI, whilst the restaurant sector as a whole saw a decline of around 43m visits in the year to June 2018, the casual dining sector reported an additional 35m visits during the same period.

That’s the good news.

Traditionally, business leaders have looked at the trend in overall profit (or loss) for the group as a measure of success. Most will break this down by restaurant and/or geography to facilitate restructuring / growth decisions.

They will look at their profit margin compared with the competition and to improve margin, they will work the levers of increasing revenue and/or reducing the cost of goods sold.

But things have changed enormously in the past couple of years.

Disruption in the UK casual dining market from alternatives like Deliveroo, UberEats, Foodhalls, drive-throughs and others, plus the seemingly ever-increasing demands of a very fickle consumer means that this traditional approach to control simply doesn’t work.

Those who survive must differentiate themselves. They have to provide entertainment value, atmosphere and good food. And they have to do it more efficiently than the next person to sustain their place in a world of tight margins and fickle customers.

So rather than asking yourself "What is the root cause of the problem in our business? (Is it the theme, the menu, our cost base, our efficiency....), casual dining restaurants have to step back to discover the most profitable use for their resources.

The question should be "How do I work with what I have to make the most profit?"

We have a methodology for doing that...

"Enterprise Value" is a term that is used to value a business beyond it's market capitalisation.  The usual definition is market capitalisation (share price multiplied by the number of outstanding shares) plus net debt.

But we think that enterprise value can and should be looked at in an entirely different way....

Disruptive procurement is the process of creating real business value and competitive advantage by:

• deconstructing what the business really needs,
• challenging established business processes,
• leveraging knowledge from outside the normal points of reference, and
• designing, assembling and managing the supply chain in new and innovative ways.