Business Crisis or Transformation Opportunity? Finding a Way Forward!
During the past few years of the pandemic, many small and medium-sized enterprises (SMEs) have been borrowing money in an effort to survive, leading to a peak in borrowing. This was largely driven by the hope for a return to normalcy.
However, even after more than six months of so-called “normalcy” with no social distancing measures and unrestricted operating hours, many business owners find their businesses performing worse than during the pandemic, and their outlook is far from optimistic.
Unfortunately, current interest rates for borrowing are high, and those with available funds may prefer to invest in stable fixed-income options like fixed deposit rather than expanding their businesses.
As a result, many businesses are struggling and even closing down.
Adapting to Survive: Business Transformation
In recent months, there has been a significant influx of Hong Kong residents traveling to mainland China for consumption, which has negatively impacted the local economy.
The F&B industry has been particularly affected. While some popular eateries and long-established establishments have closed down, there are also small businesses that are thriving and restaurants that are busy opening new branches. In an ever-changing environment, some restaurants have quietly “evolved.”
A recent survey conducted by a food delivery platform revealed that nearly 20% of surveyed restaurants mentioned that food delivery accounted for more than one-third of their total income.
Indeed, during the pandemic, food delivery became a major source of revenue for many restaurants, and some have continued to rely on it.
Recognizing that food delivery can be more profitable than dine-in services, some Hong Kong-Style Café (Cha Chaan Teng) have rented units near industrial buildings, not to open new branches, but to produce pre-made frozen foods. Whether for main courses or snacks, these pre-made frozen foods require minimal cooking skills and can be easily prepared in just a few minutes using simple cooking equipment. This increases efficiency in food preparation for delivery, capitalizes on the peak lunch period, and allows for additional income by supplying other eateries.
With a bleak outlook for economic recovery, businesses must find alternative ways to survive. Being stable does not mean being stagnant; adaptation and improvement are key to thriving.
Every industry has its “exclusive” business techniques. Consult with “Maxi Solution Accounting” who have over 20 years of experience to minimize unnecessary detours in your journey and expand your business.
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