a recipe for financial success - 3 steps to increase hospitality sector profits
TRANSCRIPT
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Alan Kay FCA
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Introduction
Communication and Awareness
The Big 3
Why Financials?
Management Information
Conclusion
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Actually, there is no real recipe … but there are plenty of ingredients! ◦ Business plan and menu
◦ Good dining experience
◦ Value for money
◦ Returning customers
◦ Word of mouth and internet recommendations
◦ Solid and meaningful financial and management information!
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Communication is vital
What is your role?
How you impact on others
How will you measure performance?
Clarity about implications of choices made
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Staff
Food and Drink
Other
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Your largest single cost?
Ensure correct mix of full time vs part time
Correct balance of experience
Rota management
National Minimum Wage
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GP or GP%?
Menu costing, flash reports and theoretical GP
Basic checks (Delivery Notes)
Wastage reports
What sells well and what sells not so well
What are your competitors charging?
What can you charge?
Upselling
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Overheads
Software – EPOS, reservations etc.
Marketing including social media
The “Hidden Killers”
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Need to be : ◦ Sufficient
◦ Accurate
◦ Prompt
How much data and how often?
Who sees the financials?
Budget, break-even and cash flow
Questions, targets, “what if?”
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What has happened?
What does it tell us?
What are you going to do about it?
Be clear about your objectives
Compare to Budget and Prior Year
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There is NO magic recipe!
Information is POWER!
Remember to COMMUNICATE
Try and STEP BACK from your business
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Alan Kay FCA
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2014 2013 2014 2014 2013 2014
Actual Actual Budget Actual Actual Budget
Sales 128,545 104,554 115,450 1,563,688 1,422,012 1,488,000
Gross Profit 88,822 75,018 81,969 1,072,690 1,004,626 1,056,480
69.1% 71.8% 71.0% 68.6% 70.6% 71.0%
Staff Costs 32,207 27,545 28,355 402,119 386,220 384,530
25.1% 26.3% 24.6% 25.7% 27.2% 25.8%
GP After Staff Costs 56,615 47,473 53,614 670,571 618,406 671,950
44.0% 45.4% 46.4% 42.9% 43.5% 45.2%
Operating Costs 5,609 3,962 6,830 57,374 53,609 68,300
4.4% 3.8% 5.9% 3.7% 3.8% 4.6%
Promotional Costs 265 3,494 3,883 9,453 13,648 38,830
0.2% 3.3% 3.4% 0.6% 1.0% 2.6%
Premises Costs 22,473 10,586 13,600 154,327 148,982 149,600
17.5% 10.1% 11.8% 9.9% 10.5% 10.1%
Finance Charges 4,618 3,454 2,955 30,317 28,036 29,570
3.6% 3.3% 2.6% 1.9% 2.0% 2.0%
General Costs 2,214 2,769 3,553 29,391 24,771 35,550
1.7% 2.6% 3.1% 1.9% 1.7% 2.4%
Net Profit 21,436 23,208 22,793 389,709 349,360 350,100
16.7% 22.2% 19.7% 24.9% 24.6% 23.5%
Period (4 weeks) Year to Date (44 weeks)
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2014 2013 2014 2014 2013 2014
Actual Actual Budget Actual Actual Budget
Rent & Rates 3,256 2,994 3,250 35,816 32,934 35,750
Light & Heat 4,892 4,521 4,750 52,922 49,010 52,250
Repairs to Premises 14,325 3,071 5,600 65,589 67,038 61,600
22,473 10,586 13,600 154,327 148,982 149,600
17.5% 10.1% 11.8% 9.9% 10.5% 10.1%
Period (4 weeks) Year to Date (44 weeks)
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Last Year This Year Target
Sales Food 15,496 19,053 17,114
Drink 10,282 12,641 11,353
Other 360 442 400
Total £26,138 £32,136 £28,867
Restaurant covers 901 992 950
Spend per Head £23.30 £26.20 £25.00
Food GP% per flash report 71.10% 70.6% 71.50%
Unexplained food variance £366 £305 £200
Drink GP% per stock control report 69.40% 69.6% 70.00%
Selling price of comps. £488 £261 £200
Wastage @ cost £102 £74 £75
Accident book entries 0 1 0
Complaints received 5 3 0