Cash is King (especially in a crisis)

publication date: Jul 2, 2020
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author/source: Matthew Sloan
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restaurant

Restaurants will need to know EVERY DAY if they are making money.

This is a BBQ restaurant in the South East with a full bar that last June did around $260,000 in net sales. After a little bit of "Re-tooling due to Covid-19" (enhanced takeout, 3rd party delivery charges, management changes, and limitations on capacity imposed by the state) this restaurant set the expectation of sales at $140,000, a little more than half of what they did last year. They know that business will be back, but they NEED TO BE PROFITABLE DURING THIS DOWN TIME.

You have to look at things differently when you cut the sales in half, and if you want to be around 6 months from now, you have to figure out a way to be profitable every one of those months.

Let's see how they are doing - this was with 1 week left in June 2020.

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On the 25th of June, this restaurant has slightly exceeded sales goals (Center numbers MTD actuals and budget column shows the expectation at this point of the month). You can see on the bottom they are profitable right now, but with the weekend coming up, they will have to be smart about purchases and scheduling if they want to finish strong

Let's look at the cost of goods first.

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This restaurant can see that coming into the weekend they are about $3000 dollars over on hourly labor. This is the kind of information you need to profitable every month.

The real magic happened in the controllable expenses (BELOW)

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We made a plan and stuck to it. Once we identified the sales expectation, we were able to calculate how much this restaurant had to spend on things like cleaning supplies, to-go packaging, towels, and aprons, kitchen supplies etc. By sticking to this plan, this restaurant drastically got their expenses in line for a restaurant that is doing $140,000 a month and not $260,000.

That is why they are profitable!!!



Matthew SloanMatthew Sloan is the Managing Partner of Fobesoft, a software tool to help restaurant owners and managers better manage their bottom line. Learn more at fobesoft.com.

 




 
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