Owning your own café or restaurant (aka restaurateurs) can be a rewarding experience. Most people love the idea of providing customers with a unique experience.
Successful people are passionate about delivering interesting food and providing an atmosphere in which people can sit and relax with family and friends. It is an experience that can’t be replicated easily at home and therefore customers happily pay for the experience.
Customer expectations of hospitality have risen so much in recent years that it is virtually a given that the café or restaurant will at a minimum deliver;
- A clean and tidy premises.
- Friendly and helpful staff.
- Quality food.
- Timely service.
Consistently exceeding expectations is the key to running a profitable café or restaurant.
An expression sometimes heard is that a business should aim to make a decent profit decently.
We know that the economic law of “supply and demand” exists in every business.
We also understand that the ability to supply is constrained by the amount of physical space and hours in the day and because of this scarcity it is vital to maximise capability and output by;
- Investing in technology that speeds up the delivery process
- Developing systems that ensure customers are not kept waiting unduly.
- Systemising the routine tasks in the business so that time is not wasted.
- Documenting in writing all food preparation so that food is produced to a consistent quality.
- Provide staff training to ensure consistency of service.
- Induct staff so that expectations are understood at the start of their employment.
To maximise business capability it is important for owners to invest their own time in firstly increasing the supply capability and secondly monitoring the key performance ratios. Often this is neglected and instead most of the available hours are spent on “day-to-day” (core) work.
To keep the business on track a management information system should be established to measure “Key Performance Ratios”. We recommend keeping track of;
- Total sales per month
- Gross profit margin
- Wages as a percent of sales
- Premises costs (rent) as a percent of sales
- Number of customers per hour/ day/ month)
- Average sale per customer
A useful tool to help keep track of business performance is a traffic counter that can be installed at the front door to measure the number of people entering which can in turn be fed into the monthly monitoring system.
Owners can also fall into the trap of trying to save money on non-core business activities such as bookkeeping and accounting when the better option is often to outsource this work. Because time is limited, business owners get a higher return on their invested time by working on improving the business.
At 360 Financial Advantage Pty Ltd we regularly help business owners set up monthly management information systems that deliver rich data. We can also take the headaches out of the bookkeeping process to deliver time back to the owners so that they in turn can work on the business. Contact us.