18 May 2024
Chef and restaurateur, Neil Perry, learnt the hard way that without a financial plan, you could be in for a trying experience. After opening his first restaurant in 1989 and then accidentally expanding too rapidly, Neil discovered the value in having a measurable, easy-to-understand plan for your business’s cash flow.
“I opened Rockpool during the 1989 recession,” he says of his eatery in Sydney’s CBD. “In 2009, at the tail end of the global financial crisis, I opened Rockpool Bar & Grill and Spice Temple [both also in the CBD]. And the launch for restaurant, Margaret in Double Bay was the day Sydney went into COVID lockdown. You could say, I’ve had experience with catastrophes.”
While good planning will help you through tough times, Neil says being optimistic is just as important. “You can’t choose what’s going to happen, only how you deal with it. It needs focus, optimism, a strong business plan and an understanding that these cycles come around and you must weather the storm.”
Here are Neil’s top tips for navigating business challenges:
Neil’s modus operandi is never about intentional rapid expansion. “It’s always been organic,” he explains of his somewhat incidental restaurant empire. Still, he says, it hasn’t been without struggle. “We got ourselves into some trouble at the end of the ’90s because we were growing too quickly.”
It taught him a valuable lesson, and what he wishes he knew about money earlier in life.
“If you can’t measure it, you can’t manage it. “It’s important to know what the financial plan is, sticking to it, understanding it and making sure you can measure it, because wherever it is – even if it’s going sideways – if you know what’s happening, you can actually do something about it.”
When Neil was staring down the barrel of letting staff go and closing restaurants during COVID, he was forced to think outside the box.
“We started a meal service and then started doing takeaway burgers at lunch.”
Look for ways to diversify or broaden your income streams or alter how you bring in money if there’s a temporary hurdle in front of your usual income stream, “It kept us in neutral – I didn’t really make any money, but I didn’t lose any, so we ended up coming out of that scenario a lot stronger than we thought.”
Good relationships are vital in business, including with your bank. “When we first went into lockdown, I rang my banker straight away,” says Neil.
“I said, ‘Just a heads up, I may call to say we have to extend the overdraft.’ It never came to that, but he gave us very positive support.”
He continues, “If things around you are going to pieces, you need your bank’s support to make sure you can get through and all relationships stay intact by the time you get to the other end.”
It can be tempting to wallow in the tough times, but Neil says the only way to get through is to buckle down. “COVID was a challenging time mentally. I’d just gotten everything organised for Margaret – we had so many bookings and the plan around paying bills was so perfect,” he says.
“I went into a tailspin but then realised COVID would last a long time. I had to try and change my mindset – and say to myself - you have people looking to you for guidance.’”
“When you’ve got a team, you’re the leader – the tone gets set from the top. I had to kick myself out of that funk really quickly.”
So, what keeps him in a constant state of evolution – and what keeps him thriving in such a risky industry? “Hospitality is tough,” he says. “When you’re working 70-80 hours a week, it really does suck a lot out of your life, your social life, your family life. So, you have to do something you really love.”
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