Have you set up your company properly to track financial success related to your management development efforts, value of the guest experience, and branding and cost management initiatives?
Do you share accurate information freely, presented in a format and cycle common to the industry?
Do the professionals you hire easily use it, and does it help you know how you compare to the competition?
Can your people read, understand, juxtapose, and present their P&Ls – and do you ever see monthly numbers other than bills?
Does this allow you to increase profit by the 2 points my clients enjoy when they get serious about this?
Be Modern, Not Old Fashioned
When I ask my clients, “May I see the P&L,” or, “How many of your managers understand their P&L?” – and they give me weak evidence – we immediately pivot to addressing these issues.
Correcting even one of those issues sets you on a path toward owning a group that operates like a true modern professional restaurant company.
To keep my clients’ restaurants fresh, relevant, and growing, I spend a lot of time improving the value of their guests’ experience, building the capability of management teams, and recognizing opportunity for brands from emergence to maturity.
As a result, my clients increase revenue, profit, and net worth.
The Four Challenges
Even in 2024 – in what has become a sophisticated industry, and even in restaurant groups with great success and millions of dollars of revenue – I still encounter four kinds of challenges in this area:
- Format. When the P&L’s format doesn’t support the kind of financial analysis necessary to understand how to maximize profit, we change the format to an industry standard to illuminate wins, losses, and opportunities.
- Literacy. When not enough people can actually understand the wins and losses illustrated by financial statements, we institute education so the people in the restaurant responsible for revenue and cost know how to master them – and produce profit as a result.
- Monthly Accounting. Looking at monthly financials in 2024 is the accounting equivalent of watching your favorite movie on VHS instead of streaming the 4K version: outmoded and blurry. We convert accounting cycles to 13 periods of 28 days, which is ideal for independent restaurant groups.
- Lack of transparency – or, in the words of a GM I talked to recently: “I’ve never seen a P&L”. Running an open book company – sharing information – turns out to be the best way to make business decisions. Some owners worry they can’t trust their people, but that’s true only if they hire the wrong people or can’t trust themselves. That’s an entirely different problem, addressed here.
I correct situations where most aspects of a business turn out to be sophisticated, while other key aspects remain severely lacking. So it no longer surprises me when I start with a client whose information looks nowhere near as good as their food, service, culture, reputation, or atmosphere. When will you correct yours?
