A Conversation with Colin McClean
Over the next 4 weeks, we will share highlights from a recent conversation we had with local entrepreneur Colin McClean, founder of Bob & Berts in November 2022.
Colin was very open and honest about how his business journey has progressed, from one store in Portstewart, to 27 stores across Northern Ireland, England and Scotland, employing over 700 staff.
The article is split over the next 4 weeks as follows:
- Week 1: Property: business models, site selection and fit outs
- Week 2: People: Understanding customers and motivating staff
- Week 3: Profit: saving energy and the bacon
- Week 4: Power: data is knowledge, knowledge is power
Week 1: Property: business models, sites and fit outs
This week, we share Colin’s experience of some of the costs faced, before a single coffee is brewed!
To franchise or not to franchise?
After the opening of their first three stores, Colin got inundated with franchise requests, so they thought they’d give this model a go. The next 4 sites were all opened as franchises with varying degrees of success. The Limavady branch still successfully operates as a franchise, while the other three were bought back and all stores since then have been opened and operated by themselves. For Bob & Berts, upholding their brand values and maintaining customer experience across every store is more important than rapid expansion.
Location, Location, Location
Colin admits to investing a lot of time in finding new sites, particularly in England and Scotland, perhaps visiting a prospective town 30 to 40 times, on different days, different times of day, weekends etc. to get a true feel for the busy spots in a given area. They admit they have got their site choice wrong previously, so this investment of time in site selection is crucial.
As a hot food business with multiple sites, located across all 11 different Council areas in Northern Ireland, Colin has found there are a lot of differences in how the 11 councils operate. Furthermore, there are different regional laws set down by the devolved governments, which all have to be worked through.
For comparison, Colin has found they can open 4 stores in Scotland, to every one they open in Northern Ireland, due to time delays in planning. England doesn’t need planning permission for any new sites, so if they found a site tomorrow, they could start building the next day. Such regulatory differences do have implications for their UK-wide growth ambitions.
Fitting-out the customer journey and experience
The current problem with expansion is costs, e,g, store fit outs have grown from £170K in Portstewart to £430K in Carlisle, ten years later. Admittedly, bigger stores with better equipment are factors e.g. enhancing the customer journey and experience with air conditioning and additional coffee machines. However, the increased building costs have implications for their future store roll-out plans.
Week 2: People: Understanding customers and motivating staff
This week we highlight the two groups of important people at Bob & Berts, without whom any business does not exist.
Difficulties in recruitment in their hospitality business has been a real issue, as many East European staff left due to Brexit. While this has increased their reliance on local populations, they have struggled to fill this gap in their workforce. They have even had difficulty filling summer jobs, which Colin sees as partly due to lower numbers of secondary school children in the local area.
Once staff have been found, the next challenge is training and retaining them, which Colin describes as ‘a horribly expensive past time’. They work very hard to make them feel valued and motivated, so as to retain them, with a people plan, online training, an app to make people feel part of the Team. In addition they have various incentives and bonuses if they stay.
Haggis or Hash Browns anyone?
When Bob & Berts first opened in Scotland, Colin candidly admitted they were quite arrogant in thinking they could just open Bob & Berts and offer the same great food and coffee to people in Falkirk as they do in Coleraine. It turns out their customer tastes are quite different! Very quickly, Colin realised they needed to make a few changes to their offering, which adds a layer of complexity to the supply logistics.
That said, Colin and his team enjoy going out and finding those little things that are important to the different regions. e.g. haggis bon bons in Scotland, hash browns in England and potato bread in Northern Ireland.
Week 3: Profit - saving energy and the bacon
Colin admitted to being “naïve and lazy” [we know he’s not!], in that Bob & Berts are traditionally used to opening a store, smashing sales and having a good margin and a low cost base. However as they saw that cost base go up, they realised they needed to run this business properly, with a greater focus on the detail behind the costs of doing business.
Energy saving deals
They were lucky to have done a 3-year deal last year, with their electricity supplier. While prices went from 17p to 28p per unit at the time, hindsight suggests they have got a good deal on that front.
Food inflation: controlling what you can
Food inflation is happening on a weekly basis, and it is very hard to justify passing that onto the customer. Bob & Berts had to do some engineering on their dishes, particularly in their high-volume lines, that won’t adversely affect customer experience. For example, they reduced the amount of bacon in their Hallion burger, from three slices to two, which would save about £32K a year!
While food inflation is outside their control, they have negotiated with suppliers to find savings that were passed on to them. For example, reducing the number of supplier delivery days each week from 5 or 6 to 3 days a week, and a shift from telesales to online ordering.
Cutting costs, door to door
Colin did a project recently, where they walked from the front door to the back door of the store, noting what equipment is on, asking should it be off. They considered timers, energy saving bulbs, frequency of bin collections, possible investment in compactors to flatten cardboard. Individually they may not seem like a lot of potential savings, however over 27 stores, the savings are big. By doing this exercise, they realised they had unnecessary costs.
Here's A guide to energy efficiency in the workplace from Energy Saving Trust
Week 4: Power: data is knowledge, knowledge is power
This week we highlight how Colin and the Bob & Berts’ Team have gathered and analysed data from the business, to inform future decision making.
Turning assumptions on their head with data
As a company, Bob & Berts do much more data analysis nowadays to inform the decisions they make. Colin thought most customers heard about new stores through marketing and that around 20% of customers would find out from just passing by.
Interestingly, the WiFi login data for their Carlisle store highlighted a different picture, where 74% of customers logging on said “they were just walking by and saw the new store”, further highlighting the importance of getting the site selection right.
Data driven marketing
As well as analysing the WiFi login data, Colin’s team recently brought in a margins system that allows tracking of supplies as they come into the store, as well as providing live data on what’s being sold at store level.
Having such rich data to help inform future marketing campaigns, as well as strategic change, is invaluable. For example, in one store, it was clear that takeaway sales of coffee were low, compared to other stores. Knowing this data, prompted marketing thereafter, that included both take away and sit-in cups to communicate their brand better.
What’s Next for Bob & Berts?
They have plans next year to roll out new stores in Glasgow and Blackpool, plus there are about 6 or 7 potential sites being worked on. They are also exploring a redefined model, that would allow them to take out the kitchen, to offer sandwiches rather than hot food. This will open up the way to smaller stores, including kiosks in shopping centres, which means they can keep expanding the business while reducing costs.
However, to do so, would mean a departure from their unique selling point (USP) that you can get a coffee and a fully cooked breakfast at any Bob & Berts’ store. The only way to know if it will work is to give it a go!
We wish Colin and everyone in the Bob & Berts Team continued success!