Where to Cut Costs in Your Park or FEC

If you haven't already felt the sting of the recession, you may soon as the seasons are changing. As we head into the time of year when our traffic declines, you may be concerned about how you can cut costs and keep your business open when our economy is down, especially through the winter months.

In order to keep your family entertainment business healthy during the slow season (and a recession), you'll need to make some hard decisions. These are not always popular choices to make, but they are absolutely essential for the survival of your business.?

Cutting Labor?

Reducing labor costs should be at the top of your list. Changing the hours of operation is important because of the slower time of year. Now that kids are back in school and there is a long winter ahead, it's time to change the hours and cut back on any non-essential staff members. You can do this by rotating schedules and changing full-time positions into part-time. There is no reason to be fully staffed (or open extended hours), when you are not getting the amount of traffic you did during summer.?

Reduce Spending?

It's time to cut discretionary spending. This includes all of the non-essential purchases. If your business can survive without it, you shouldn't be spending money on it. Everyone wants to spend money on upgrades, and you should! When your business is flourishing during the busier time of year! But, when you are facing economic turmoil such as the recession or you are heading into your slow season, all upgrades should be placed on the back burner until business picks up again.

Watch spending when it comes to capital costs. Unless there is a serious safety concern or other issues that are essential to the operation and function of your family entertainment business, it's time to put off buying new equipment and attractions.

It's also a great time to downsize! Shut down or get rid of any equipment that you don't use often. This type of equipment is just siphoning the money out of your bank account. If something isn't giving you a solid return it's time to eliminate the cost.

Manage Corporate Spending

Travel expenses are an area that needs to be trimmed if not, taken completely out of the budget for the time being. Of course, it goes without saying, some staff members will need to travel. Implementing a travel policy is a smart idea. The policy should state who is allowed to travel, how much money can be spent and it should all go through an approval process.

The travel policy should have a very clear pre-approval trip process. That way your company makes sure that all travel plans are essential. Setting a realistic budget for food and expenses is very important.

Introducing Your New Budget

Once your leadership team has revised your policies and set very clear budgets for specific needs, it's time to have a meeting and explain it to your staff. It is a smart business move to have detailed paperwork for any purchases. The more detailed the paperwork, the more thought will go into whether or not the purchase is valid. It also encourages your staff to find deals or discounts in order to make the purchase.

These are just a few ideas that can minimize unnecessary spending. By cutting costs you are saving money. The more money you save, the healthier your business is when revenue is low.?

Have you read an article 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.

Tim Murphy is CEO of APX Operating Company, dba Boomers Parks, under the ownership of Cerberus private equity ($60B 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 a similar trajectory 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 - Family Entertainment & Amusement Parks, part of The Carlyle Group ($276B 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 International Association of Amusement Parks & Attractions (IAAPA), California Attractions and Parks Association (CAPA), Florida Attractions Association (FAA), American Amusement Machine Association (AAMA), National Restaurant Association (NRA), California Restaurant Association (CRA), World Waterpark Association (WWA) and International Franchising Association (IFA). 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.