There is a line unaccounted for on your P&L. It is called “missed opportunity.”
By sheer accident of the way our accounting system works, missed opportunity is a controllable expense your successful, independent multi-unit restaurant company does not account for.
Potential revenue and profit is pouring out of your restaurants; but, in the day-to-day, week-to-week, you are so busy you forget about that.
If we could start at the beginning — and design an accounting system from scratch — missed opportunities would be extremely evident, and one of the most important numbers on your statement.
It would jump out at you when you comb through operating statements. It might upset you. It might even make you spring into action.
Top 10 Missed Opportunities Costing You Money
If you saw the missed opportunity line item, here are 10 things you might say to yourself:
- If we manage costs correctly, we can knock one or two points out of controllables. Big!
- If we manage the back of house and purchasing, we can knock one or two points out of COGS. Huge!
- If we had more qualified managers, they would pay for themselves in cost control and revenue. Cornerstone!
- If we had the right marketing, our sales would be up an additional 2% this year. Major!
- If we improved our training, we could cut labor costs by half a point. Significant!
- If we were better at catering or private dining, revenue would be up 2.5%. Wow!
- If we were better at to-go, revenue would be up 2%. Sweet!
- If we were better at understanding our place in our segment and communicating our culture to our guests and employees, sales would be up an additional 3%. Remarkable!
- If we were better at selling at the table, revenue would be up an additional 2% (and our guests would be happier). Amazing!
- If our intake process were improved, retention would increase and we would reduce the cost of training new employees by 50%. Consequential!
You Are Not Rich Enough to Ignore This
When I first work with my successful clients and tell them they are leaving two or three (or more) points on the table, they don’t always believe me…but the best operators do.
There are people like my client Ed Murph, owner of the 5 unit Norma’s Café group, who says, “Every percentage point we gain as a result of working with you represents a large increase to us.” Ed is a master of the details of his business. He gets it.
Three points is a huge amount of money. At an organization with revenue of $10 million, that is $300,000. Every year! At $20 million, it’s $600,000!
Do the math on your revenue. Do the numbers grab your attention?
Over to you. What would be the dollar amount on the missed opportunity line on your P&L? Which of the items above are most significant? What are you going to do about it? Who do you need to help harvest this additional revenue and profit?