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TOP TIPS FOR MANAGEMENT
Andrew Woods and Brendan Colclough of Colclough Woods & Associates, who help facilitate the Guinness Investors Course, advise on planning your finance.
Develop a Business Plan.
As with most things in business, the better you plan, the more successful the outcome will be. Finance is no exception. Ensure that you have an effective business plan in operation irrespective of whether you are in a pre-opening or post-opening situation. An effective business plan will enable you to look ahead and monitor financial successes or failures.
Cash Control.
Try to have accountability for all cash handling and ensure that there are effective systems and procedures in place for anything relating to cash. Reconcile all transactions daily and always investigate irregularities. If you don’t, small problems will very quickly become large ones. Know your point of sales system (POS) inside out and ensure that anyone who uses it is properly trained and retrained where necessary.
Make sure that all tills are read and reconciled at least once a day. We would recommend that, where possible, this be done on a shift by shift basis backed up by random spot checks.
Stock Control.
Treat your stock as if it were cash. It is probably your biggest single cost so it deserves to be controlled accordingly.
Ways of doing this include taking regular and accurate stock checks - at least once a month but weekly if possible. Calculate it accurately and quickly or the information will be useless. Investigate any shortage or surplus immediately and make sure you have clearly defined rules and regulations regarding the movement of stock. Ensure stock in storage is secure and all movement or consumption of it is accurately recorded.
Regularly update your list of suppliers so you are getting the best available market prices. Ensure that stock is ordered accurately and that all deliveries are received correctly. If you are having operational difficulties in either taking or calculating stock, you should consider using an external stocktaking company.
Monitor Labour Costs.
Labour is likely to be your second- highest single cost so it deserves to be controlled by monitoring your key business and off-peak periods.
In addition to this, you should plan your rotas effectively in relation to your peaks and troughs by:
Estimating your sales for the coming week.
Using historical sales figures to guesstimate.
Being aware of any special events and their possible impact.
Being aware of your labour cost budget and costing your rota accordingly and in advance.
Monitor Operating Costs.
Again, these will form quite a substantial part of the day to day costs of running your business and include your variable and semi-variable overheads. The most significant of these will be light, heat, electricity, phone bills, crockery, glassware and utensils.
Common sense is the best approach here. Make sure that lights, ovens, etc. are not left on unnecessarily. Monitor phone calls to ensure that they are business related and make all staff aware of the cost of breakages. Placing a sign in the kitchen or staff room outlining the various costs involved will heighten awareness.
Minimise Wastage.
Watch out for: Unattended taps; scraping the head of the pint; not using measures or using them incorrectly.
Always record: Spilt drinks; complimentary drinks; happy hour drinks; staff drinks and beer line cleaning.
Prevent Fraud.
Prevention is better than cure. Establish clear procedures for using the cash register, making sure every new staff member aware of them and signs for them. Periodically update the procedures and make sure a copy is always beside every cash register. Ensure that receipts are issued for everything. Consider installing closed circuit television with a video recording facility and do not leave cash or stock lying around.
Produce Timely Reports.
Gross margin should be calculated weekly. Profit and loss accounts should be prepared monthly and cumulatively throughout the budget year. Both should be available promptly, not more than one week after the period end. Profit and loss accounts should be examined for three key elements: turnover; gross Margin and profit before interest and tax (PBIT). Prompt and corrective action should be taken where discrepancies are identified.
Select a Point of Sales System.
Identify your particular requirements ensuring that the system you purchase is the most suitable, but not always the most expensive - a POS system developed for a hotel is not necessarily suitable for a pub. Get proposals and quotations from a minimum of three suppliers and make sure they give you reference sites. In addition, try and get hands on experience with a demonstration and make sure the system is flexible so that it can grow with your business.
Monitor Sales Mix.
Your sales mix cannot be controlled, but it can be influenced by being aware of your most, and least, profitable products and making the sales staff aware of them. Train all your sales staff in the art of suggestive selling, encouraging them to recommend profitable items to your customers. Consider combination selling as a way of maximising your sales. For example, Guinness and Oysters at an inclusive price.
If you would like more information on any of the above, you can contact Colclough Woods & Associates at info@quantum-training.com or alternatively you can ring them at 353-1-8901225.
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