Video courtesy of our friend Christopher Wells from Building Blocks TV
ChallengesWhen you consider that running a restaurant involves a manufacturing plant in back of house and a retail business in front of house. Add to that the highly perishable nature of the products, its easy to conclude that there can be no more difficult businesses in the world to operate – let alone make them profitable.
With tighter profit margins than many other businesses, restaurateurs are great examples of the entrepreneurial spirit. All restaurant veterans know that this is a very unforgiving business when it comes to achieving bottom line profits.
Know your numbersGood intentions and satisfied customers don’t always equal financial success. Often any profit is slim or nonexistent – timely and meaningful restaurant accounting, systems and controls are essential to track financial direction on a daily, weekly and monthly basis.
Knowing your numbers is the single most important challenge for financial success. Sound restaurant management requires additional skills such as:
- Interpreting and understanding financial accounting statements
- Implementing sound yet simple financial procedures and systems
- Knowing your Key Performance Indicators
- Tracking daily progress against a carefully crafted budget and Cash Flow Analysis
- Strategic planning and marketing
- Applying the financial restaurant management techniques that the large restaurant chains use.
The Five Essentials for Running a Financially Successful RestaurantTo translate great operations into cash the following FIVE ESSENTIALS MUST exist
- Know your SALES MIX
- Detailed and accurate BOOKKEEPING updated daily
- Real-time INVENTORY CONTROL
- Real-time FOOD COST CONTROL
- COST CONTROL for all controllable expenses – daily, weekly and monthly