They say 9 out of 10 new restaurants fail. There are several reasons behind that statistic, but, its mainly because owners dont have a good grip on their numbers. They are relying on an accountant from a corporate office who are not there day to day or a bookkeeper siting in an office who’s main objective is just to record. How often are numbers analyzed?
Numbers tell the story of both a successful and failing business. It should be analyzed daily. Those numbers should dictate what is the daily target, or better yet, what is the hourly target. By the time its analyzed, usually, its too late.
Whats my net sales? What is net? Whats my cost of goods sold? Am I allocating expenses the right way? Whats my payroll cost? What is Prime Cost? How much should I spend on my Direct Operating Expenses? Whats my marketing budget? Whats my Admin and General Expenses? Am I exposed to audits? Am i on par with industry standards? When negotiating a lease, what montly rent makes sense based on occupancy and sales? Have I been paying too much rent? How is my cash flow? Am I making a profit when in fact Im burning? Am I making too little of a profit?
These are examples of some questions you should be asking every single day. Your numbers will tell you if you are running an efficient and productive style of business. From there, you can make adjustments necessary.
Here at The Numbers Cafe, we set up a system, explain it best to you, and then give you on going support and advisory. You dont need to be an accountant to know numbers. Its literally like understanding a story or movie. Its not overly complicated. But, the system, needs to be set.