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How are you going to get the most out of your restaurant financials so you can make the most money possible in 2019? I am sharing three simple things you can focus on to make this happen.
To learn more please either watch the video above, read the transcript or listen to the podcast below.
Read the Video Transcript by Clicking Here...
How are you going to get the most out of your restaurant financials in 2019? How are you going to make the most money? There are three simple things I want you to focus on to make this happen:
- Stop operating your business off of a P&L (Profit & Loss Statement). Operating your business with a P&L is like driving a car looking through a rear view mirror. You aren’t paying attention to what’s in front of you. If you keep looking backwards, you are going to crash and be in for a world of hurt. But if you don’t even have a P&L statement or don’t know what that is, you really need to get to work! You are going to up against some serious international investors/players in 2019. Big-money business people have been getting into the restaurant business and they’re going to continue to do so. If you don’t know your financials – you’re going to be in trouble.
For those of you that know what a P&L is and have one, that’s probably all you’re using to operate your business – we don’t want that.
You have to get ahead of your numbers. You have to use budgets and then track your sales and purchases against that budget. If you need a little help on how to do this, we have software that can help you get ahead of financials. Head on over to https://clickbacon.com/ and watch our free training video for more info.
- Get your shit right. I’m sorry for the language but most of your financials are set up wrong. For example, having the right categories in your POS (Food, Beer, Wine, Liquor). If we don’t have our category set up right and don’t have the right items going to the right categories, we aren’t getting good sales data. If we’re not getting good sales data, then we can’t compare our purchases to that.
Most of you are looking at invoices and just calling it food, so then your beer costs are all wrong. Not everything that comes in on your invoice is food, some of are capital expenses, direct operating expenses, or bar expenses. For example, are lemons in Bar or Food categories? It depends on your restaurant, but you’ve got to get that setup right. I have a great video that explains how to set up your categories and financials properly. I’ll put a link to a video below the video.
- Work off of a budget. I already talked about this in point one above, but I can’t stress it’s importance. Here’s a scenario to consider: if you think you’re going to do $100,000 in sales and you have a target cost of goods sold of 30% then how much can you spend on cost of goods sold purchases? The answer is $30,000 (100,000 x .30 = 30,000). That’s how easy it is to create a budget.
Now that the budget is created what do you do with it? You can use a declining balance sheet so every time you receive product it goes toward cost of goods sold and you can track it. For example, you start with $30,000 because that was your target. You receive product worth $2,000, which leaves $28,000 left. Then two days later you receive an order for $3,000, which leaves $25,000 left. This process continues, so as you get closer to the bottom of the month you know whether you’re on budget or not.
Summing it up:
Here’s a quick review of what we talked about today.
1) You cannot run your business off a P&L – that tells the past and we need to be looking into the future.
2) You have to set your financials up properly. Set your categories, departments and labor up correctly in your POS and in whatever tool you’re using to track your accounting.
3) You have to work off of a budget.
I wish you the best of luck in 2019! I can guarantee you what I’m talking about here is going to be just as important in 2025 as it is now. This stuff is the basics/foundation and you’ve got to master it. If you need help, find people who can help you. Maybe you want to work with me or with someone else who has restaurant-specific knowledge. Most accountants and bookkeepers can’t really help you with this part because they don’t understand the financials of restaurants. It’s different than most other businesses. While it seems similar, I promise it’s quite different. Find professional help, get this stuff figured out, and good luck in 2019!
Your Next Step
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