I see it repeatedly where business operators hope to see some profit at the end of the month—running daily, hoping there may be some money left over. If you want to get serious about making sure that your business is profitable, you need to do budgets and projections of sales so you can work out what you need to spend to be profitable.
If you have been operating for a reasonable amount of time, you will have an indication of what your daily turnover will be. Good operators will forecast their turnover, then work out a COGS, Wages, and other operating expenses budget. Then you can see what your projected profit will be month to month. And you need to guard this with your life, as that is your hard work in monetary figures.
As you know, hospitality is a numbers game, and if you don't know your numbers, how can you measure things to make changes to make more money?
I know we are busy within our businesses, and finding time for this type of thing can be tricky, but this is crucial to ensure that you know where your business is financially. It would be best if you carved out time once a month to make projections and then update accordingly to analyze your numbers to ensure the business is on track to meet your projections.
We are in hospitality to make money. I see so many operators that are blind to the profits that they are making and don't know their numbers to see where they can improve to make things better.
It would help if you had your monthly P & L completed ideally by the 10th of the following month, so you can see exactly where you are and establish your focus for the coming month.
RICHIE WALSHE
THE GROWTH COACH - HELPING DRIVEN AND PASSIONATE PEOPLE RUN BETTER BUSINESSES, BE MORE PROFITABLE AND LEAD BETTER LIVES
A great way to "protect" your profit is once you have made your projections and you know what projected profit you will be making, create a separate account and have an automatic payment of X amount for you to guard and protect. Some weeks you will make more than others, but doing this creates a "profit reality" where you see the money you make every week build up in a separate account.
I love working through numbers in business. Let's chat to work out where your focus needs to be and help make a plan to get the profit you deserve.
