Financial & Business Management Assessment & The Power of Controlled Costs for Restaurants
As we leave 2020 and look ahead to 2021, the restaurants that assess their current situation, the ‘Now’, and look ahead to the goals they want to achieve, the ‘Where’, will be able to better plan, the ‘How’, to prosper in this new year.
As you look through this assessment/checklist of key restaurant financials and business management activities below, mentally rank each one on a scale of 1 to 10 to establish where you are ‘Now’ and then establish ‘Where’ you want to be in 3, 6, or 12 months.
Financial and business management is what you do to control costs, manage cash, and measure results.
Rank where you fall on each of these areas:
- Our management team calculates prime costs weekly, investigates variances and if necessary, promptly makes corrections.
- Our financials are done on a 4-week accounting cycle, not a monthly calendar one.
- Our P&L is based on the restaurant industry standard chart of accounts.
- Our management team uses a 12-week cash flow projection to stay on top of our cash balances and expected inflows and outflows.
- Our weekly labor schedules are prepared off anticipated sales volume and actual labor is compared to budgeted labor daily.
- Our management team has analyzed every expense category on our P&L and have reduced or eliminated all costs that are not essential and do not negatively affect the guest experience.
With a “Now” score in place, the temptation that arises is to start fixing all the “Now” things you found lacking. But, that’s jumping from the ‘Now’ analysis directly to the ‘How’.
The better approach is to avoid this temptation and invest the time into conducting a ‘Where’ analysis. The key is to have a good understanding of where we are heading so that when we do get to the ‘How’ we know what is important and what is not.
We all get excited about the ‘How’ because it means action. How do we get to where we want to be? This is about the drivers and enablers of performance. These are the actions that move us from the ‘Now’ to the ‘Where’.
Do You Know Your Company’s Health Level?
When was the last time you reviewed the health of your business? Are you struggling to determine where to start when it comes to addressing key business issues to achieve your vision/goals?
Don’t wait for the ‘right time’ to review your performance. Do the vital work today.
To help you in this process, we invite you to take advantage of our highly productive 90-minute ‘Business Health Check’ private workshop with our experienced TCFOS Advisors.
Learn More About Our Business Health Check Consulting Session
Fill out the following form and we’ll reach out to let you know more about this program.
And, if you’re interested in an even deeper dive, also ask about our company assessment process.
Dixie McCurley — Co-Founder of Trusted CFO Solutions
Never able to fully identify with the stuffy title of “accountant”, Dixie McCurley set out to revolutionize accounting practices for small- to medium-sized businesses by offering a new way of thinking about the process. With a unique method that capitalizes upon the latest technology, she walks each client through their pain points. In 2019, she was awarded the Financial Leader of the Year award for innovative solutions in finance.