Why do some restaurants make it and some don’t?
In my 30 years in the restaurant industry, I’ve heard that phrases many times.
Another question might be, what is the biggest difference between a successful chain or franchise and a struggling independent restaurant.
So, what makes the difference?
Operating with a budget, no question. The big guys are doing it, and love ’em or hate ’em, they are consistently opening new stores in big fancy locations all while operating at their full profit potential.
Successful restaurants chains and fast growing franchises achieve this by looking at their numbers daily. Not just looking but using the tools to make everyday actions.
Restaurant managers don’t need to be bogged down with hours of paper work every day to see if they are hitting their numbers. What they need is a quick five-minute snap shot of where they stand now.
Where Do You Stand?
Most restaurants get their profit and loss (P&L)) statement after the month closes out, this is really important, but what if your team could have seen the writing on the wall in the middle of the month, and started adjusting their scheduling practices, or the way they order food or beer to correct said issue? The point is, if they had a clear picture of the issue, while it was happening, they will have a much better chance of fixing things and saving the month. After the month closes out, it is too late.
Having targets and setting goals is vital to the financial well-being of your operation, but far to often we see unrealistic goals with time frames that are too long. One of the best techniques we are seeing with budgeting is setting short-term, manageable goals. A restaurant manager can have the greatest impact on the financial strength of the restaurant simply by looking at targets daily and weekly, not monthly and quarterly. Good days turn into good weeks, good weeks make good months. Have a few good months and now you have a good quarter. That’s how small changes can have huge impact. Remember those franchises and successful chains I mentioned earlier, that’s what they are doing because it works.
Sorting Through the Information
While it is true that are we are living in the “information age,” there is such a thing as too much information. The average restaurant manager can’t handle the amount of information that is coming at them from POS systems and high-tech accounting software. These programs have their place with accountants and bookkeepers, but the average restaurant manager needs something that is going to take a few minutes a day to give them the big picture of how decisions they make today will have impact tomorrow. The boots-on-the-ground managers have a lot of responsibilities, and getting frustrated and lost in the minutia of reports and details is not where the managers needs to focus their attention.
Mastery Through Practice
A crazy thing happens when you are forced to look at your numbers every day for five minutes–You always know where you stand. Have you ever been to a manager meeting and a manager gives you a blank look when you ask if they knew how the month ended?
What about if you ask how they plan to fix the cost of goods issue this month and the room fills with silence?
When managers know where they stand and understand how decisions affect the business financially, the uncertainty has been all but eliminated from the monthly manager meetings.