Management | 8 mins
The 10 traits profitable restaurant owners share.
by: our customer success team
Holistic business outlook improves profitability
When you hear “holistic” what do you think of? A hemp-clad hippie sitting cross-legged under a tree, just seconds from enlightenment? Your kooky uncle trying to prescribe yoga nidra as a cure for gallstones? We’re going to be presumptuous and assume the first thing you associate with holism isn’t business.
But hi, we’re here to tell you maybe it should be.
You see, it’s all about the big picture. There aren’t many businesses that will live a long and prosperous life without at least a decent slice of cake at the end of the week to chew on.
The fact of the bottom line
We know it’s not polite to talk about, but no matter how passionate you are, the bottom line is the bottom line. You go into business to make money, not just to make coffee. Yes we learnt that the hard way. So it’s time to get holistic.
We’re not hippies or naturopaths. We’re serious about business. But we know the holistic approach works. We’ve worked damn hard to make money. We’re familiar with the struggling and the math and the spreadsheets. And frankly a lot of our current success and happiness -- and financial freedom -- comes down to the holistic approach.
We think of it like this. When you’ve got a stomach ulcer, your doctor shouldn’t just treat that symptom. A good doc looks at your whole lifestyle, checking every aspect of your health and wellbeing, from diet to family history to mental health to hormones, making sure everything is in balance.
That means that rather than just giving you a soothing medicine and still letting you rot yourself from the inside, good ol’ Doc fixes you up properly by understanding your health as a whole. Doc says, “Mate, your stomach is eating itself. Take a holiday, take these meds and stop having whole lemons for breakfast, then you’ll be right as rain.”
A lot of people think boosting revenue is the only way to make better profit. But that seems like a band aid solution … and half the time it doesn’t even work.
To make good profit, we’ve gotta look at the whole show. It’s not just about turnover -- sometimes finding extra profit within the business model you already have is more effective and cheaper than finding more revenue.
Okay, I get the 10 traits. So now what?
If you're sitting here feeling like you don't know about any of those things as well as you want to, we're here for it. You know the deal with SMART goals? Specific, Measurable, Achievable, Relevant and Time-based. That means we need some numbers. We need to get some metrics happening. Some goals we can measure and work towards for each of those traits.
But if you already identify with a lot of those 10 traits in the list, keep reading for a bonus round -- how to manage those things better, faster and sooner.
Better benchmarking happens in real-time
We need it to be more responsive than an excel spreadsheet that you update at the end of the week, if you even have time. This environment moves so fast, projecting more than a few days in advance can sometimes feel pointless.
But on a day-to-day basis we can’t sit down and constantly reimagine the numbers. Anyone who’s spent a day on the floor will know that there’s a thousand things pulling you away from.
Holistic BI exists in the form of spreadsheets, or in software solutions for other industries. But the fact is, most standard Business Intelligence (BI) software can’t actually offer the value we need in this fast-paced industry unless it accounts for everything. And of course, we need that to happen without actual data entry.
Which is hard. This is the same with everything we look at. Viability does the same. Reporting from every side of your business allows you to see any problems as a whole — both in real time and into the future — so you can address and avoid issues and keep your business in great health.
What we want is nifty, easy to digest information that includes all the relevant data (so we don’t get stomach ulcers trying to chew through all the numbers). We just want to know where we’re doing great, where we could improve, and what might help us make those numbers sing.
Traits of profitable Hospo businesses
1. They know their revenue each service of each day. In fact, they don't just know their turnover; they use it as a starting point to measure all the other stuff.
2. They use forecasting. Even more important than knowing revenue for today is projecting revenue, costs and outcomes for tomorrow as closely as possible.
3. They understand & consider their overheads. They keep track of them, distribute them, budget for them, and use them to inform daily decisions instead of forgetting they exist and getting a massive fright when the bill comes.
4. They know what's up with GST. They know what they're paying, what they're being refunded, and have the money ready in the account when the moment arrives.
5. They have accountability amoungst their suppliers & supply chain. Catching price creeping, keeping a track of order errors, having great communication with bookkeeping.
6. They know - and control - their Gross Profit. They can tell your off the top of their heads their GP on saleables, or their GP averages last week, last quarter, last year.
7. They have agile ordering & budgets. They use budgets that aren't fixed, and don't order the same thing each week. Budgets are directly proportional to revenue and recalculate whenever that revenue changes.
8. They have agile & comprehensive labour budgets. Just like ordering, labour budgets shift with revenue. They calculate budgets using real costs including super and other oncosts, plus accounting for paid holiday and sick where applicable.
9. They measure productivity & keep their people engaged. They make sure they have the right people when & where they're needed for optimal service. They don't have regular periods of over or understaffing, meaning their teams are engaged and supported. They know how productive their team is based on figures, not just feelings.
10. They remember the importance of the bottom line at all times. Aka profit. Aka your family, your home mortgage/rent and your end of the week knock-off bev. Aka being able to pay your team well to attract the best people in the business. Aka having money to reinvest. Aka making enough profit to have a life, and having the funds you need to enjoy it.
For the business owners who can hold all of that together, decent profit is the natural outcome. All ten traits need to balance and harmonise to create a profitable environment and give you peace of mind.
Great, profitable businesses manage to get all of these things interacting in the right way. It's that simple!
Okay, you got us... it's absolutely not simple at all.
That’s why we need to be on top of each element if we want to run a good business and make good profit. We need to know our business reality in a completely holistic way. Unless we know everything, we’re not in control of the end point. We need to see the reality and truth in our businesses. We need to approach business with understanding & focus.