Surviving a Recession Part VII - Manage Corporate Expenses

There is a certain systematic approach to surviving a recession. No business is going to like it, but each step is essential to survival.? When individuals start feeling the economic sting, they begin tightening their belts, and typically the first expenses to go are ones of entertainment and leisure.?

While some of the most successful parks and FECs may not see a total disaster when they look at their numbers, every single one will notice a decline in attendance. The reason that the more successful parks are not heading into financial ruin during a recession, is because they take the necessary measures to make sure that they are saving money where they can, which keeps their business within a financially healthy range.??

Reduce Labor

The first thing that needs to be done is to review all employees and their roles. Make sure that you are not overstaffed. No CEO likes to make cutbacks. But it is vital for the business.?

I have mentioned before about changing hours. Not only are we heading into a recession but we are also heading into the slower time of year. Kids are back in school, and winter is around the corner. It makes sense to cut back the hours of operation and get rid of any non-essential staff members. Rotating schedules and changing full-time positions into part-time positions is a smart move as well.?

Review All Contracts

It's time to review your contracts. You should do this periodically anyway but when a recession rears its ugly head, it provides a very good reason to analyze exactly where your money is going and what can be changed. If a contract is not beneficial or you don't see a need to continue it, then it's time to renegotiate or terminate.?

Cutting Costs

In each one of these articles about surviving the recession, I'm giving you an array of tips to cut costs everywhere in your park or FEC. It might not seem like much each time you integrate one of these tips, but trust me they all add up.

Let’s look at a few other ways to keep spending down.

• Discretionary spending: It’s time to close the checkbook. No more frivolous purchases. Yes, it is a wonderful thing when your business is growing and flourishing to spend money on upgrades. But, when there is a recession, these things need to be placed on the back burner until the economy turns around and your financial stability is no longer in question.?
• Capital costs: Unless it’s about a safety concern or other topic of significant importance, put off buying the new equipment or attractions.
• Downsize: Stop paying for any equipment you don’t need or that is sucking the money out of your bank account with little to no return.

Reduce Travel

Reducing travel expenses is a must. Of course, some of our staff members need to travel when they are charged with the task of overseeing more than one facility, attending important meetings, etc.? Here are a few things you can do to keep travel costs down:

1. Review your travel policies. Make necessary changes. It's time to tighten the budget and decide what allowances are important to the success of your company without breaking the bank.?
2. Freedom of spending needs to be addressed. Setting a more realistic budget for food and travel expenses can save your company a lot of money.
3. Put into place a pre-approval trip process. Make sure that all travel plans are based on an essential need. Any non-essential travel should be declined.
4. If you don’t have vendor relationships with hotels, transportation services, and restaurants that provide your staff discounts when traveling, looking into it wouldn’t be a bad idea. It might not be worth it to contract with them if your staff doesn’t travel often. In this case, be sure to take advantage of any transportation as well as hotel deals and promotions. For example, an Uber or Lyft is much cheaper than a rental car or mainstream taxi service. Booking your flight in advance can also save you money. These little things can add up to big savings.
5. Make sure that for each trip that is approved, there is appropriate paperwork that will provide your business leaders with detailed information to account for the money spent. No one likes paperwork. However, it provides for a more specific and fiscally responsible process.?

Credit Card Processing Fees

It’s time to look for a cheaper credit card processing service. Credit cards were designed to be a fast, convenient way to spend money. And, they are! But not without a price. Banks and other credit card processing service providers have decided to start tacking on various dollar amounts for different cards and their spending abilities. There are so many fees for using credit cards. Look into the ways you can cut these down by changing service providers.?

Managing Corporate Spending

Have meetings. It’s time to explain the new budget and what will or won’t be considered essential spending. Setting spending limits and introducing the new detailed paperwork and an approval process can motivate employees to deliberately think about all purchases and encourage finding deals or discounts to make their trip or validate a purchase.

Once you have the necessary cuts made and have the extra money, it’s time to start marketing like there’s no tomorrow! I’ll cover that topic next time.

Have you read an article that I’ve published here on LinkedIn and want to talk about the topic a little more? If you’d like to book a call with me regarding the Family Entertainment Industry or Private Equity, please feel free! I enjoy connecting & collaborating with others in the same professional space.

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Tim Murphy is CEO of APX Operating Company, dba Boomers Parks, under the ownership of Cerberus private equity ($55B assets). Boomers Parks owns six family entertainment centers and two water parks with locations in California, Florida, and New Jersey.

As CEO of Boomers Parks since 2020, Tim took these eight parks from bankruptcy to profitability in just a year – in the middle of a global pandemic. When Boomers acquired these parks, they were operating at a $10 million loss. Tim transformed the customer experience and added new revenue streams to generate a 180% increase in revenue in 2021 (and on track to be a 250% increase in 2022).

Tim launched his 35+ year career at Walt Disney World and has since served more than 150 entertainment, restaurant, and food & beverage brands across more than 10,000 locations in C-suite and senior positions.

Additionally, Tim is a Board Director with Coney Park, Happy City and YuKids - Family Entertainment & Amusement Parks, part of The Carlyle Group ($275B assets), a private equity firm that operates 150+ family entertainment centers and amusement parks in Latin America.?

Tim has worked with top-tier entertainment and restaurant brands including Disney, Rebounderz Trampoline Parks, Darden Restaurants (Olive Garden, Bahama Breeze, etc.), Red Lobster, Jimmy John’s, Applebee’s, Sonny’s Bar-B-Q, Denny’s, El Pollo Loco, Hardee’s, Golden Corral, and Firehouse Subs.

Tim has overseen more than 35 purchase transactions involving over 1,200 restaurants, stores, and park locations.? With extensive experience in buying and selling businesses, handling negotiations with buyers and sellers, and creating strategic partnerships to build strong brands, Tim has facilitated deals ranging from $11 million to $350 million+.

Tim is a member of IAAPA, CAPA, FAA, AAMA, NRA & WWA. He is a licensed commercial real estate broker in the State of Florida. Tim earned a BS/BA in Accounting from the University of Central Florida and an MBA in Finance from Orlando College.