The challenges
An experienced restaurateur, Ellis established the Purple Ocean at Dun Laoghaire ferry terminal in 2004. The business caters for the middle to upper end of the market and had targeted the corporate sector to grow its client base.
Staff costs accounted for 45% of its €1.2m turnover when Enterprise Network visited last year. With these high fixed running costs, Ellis needed to get more covers, especially at lunchtime.
Ellis, who also owns the Shack restaurant in Temple Bar, had a three-year plan to reach profitability. He also wanted to open other restaurants in the Dublin area.
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What the experts said
Eilis Mannion, of Bank of Ireland, said Purple Ocean was right to target the corporate sector, but she cautioned that this would bring new challenges. “Ellis needs to take care not to put too much pressure on his cash flow by his corporate clients’ slow paying of invoices,” she said.
Purple Ocean should capitalise on its attractive location in Dun Laoghaire and easy access from Dublin city to become a centre for conferences and training, suggested Andrew Fordham, of Eircom.
The restaurant’s proximity to one of the main ferry terminals in the country should be heavily exploited, advised Mark Fielding, of Isme. “An alliance with the ferry company through the use of vouchers or discounts could be profitable and would be ideal for the tourist who has an enjoyable focal point for the return journey,” he said.
Willie Maxwell, of InterTrade Ireland, questioned the three-year plan. “Restaurants have come and gone in that period of time,” he said.
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Action taken
Ellis said efforts to attract conferences and seminars were not successful. Innovations in the lunchtime menu, which were accompanied by a marketing blitz, bore fruit, however. Purple Ocean now offers an express menu comprising a main course and coffee for €10.
The aim is to serve this within 10 minutes of patrons entering the restaurant. This initiative followed a decline in lunchtime trade. “We considered closing for lunch, but we now have 25 to 30 covers at lunchtime,” Ellis said.
The restaurant has also reorganised its staff along traditional lines with a head waiter showing diners to their seats and managing the front of house function. This allowed the restaurant to run with six fewer staff on the payroll. Despite the reduced operating costs, turnover was up 20% on last year.
Conclusion
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Purple Ocean has achieved profitability over the past 12 months, but Ellis feels that a lot of further development work needs to be done to sustain its progress and is sticking to his view that it will take three years of operating for the business to mature. Consequently, he is not looking at other restaurant developments yet.