Give yourself time to think, plan and create a clear strategy. Ask yourself the three key questions that underpin effective planning: What do we want to achieve? How are we going to achieve it? When do we want to grow, or achieve these results? A simple model to follow for food and beverage businesses will reflect a sound financial plan, i.e. we want to achieve strong sales, a 75% gross profit margin and 25% net profitability.
Once you’ve established your objectives, you can prioritise your highest risk areas to create an action plan. How you will achieve your objectives will depend on the systems and tools you implement, and creating a timeline and checklist will help keep you on track. The highest risk variable cost is labour, and is the hardest to manage and will often be the first priority. This focus point can be run alongside a focus on sales, for example, before moving your focus on to cost of goods and other expenses, once the highest risk areas are under control and performing well.
In addition to prioritising and timelining your objectives, be sure to diarise your milestone meetings after each 4-week period, to discuss how things are going with your management team, the impact of any changes and the effects on business performance and any adjustments to the strategy or timeline needed.
Understanding your financial data and being able to operationalise it is critical to improving performance. View the P&L in a format that clearly highlights and tracks performance across the core KPIs – sales, food and beverage cost, GP, labour cost and bottom line profitability and share your results with the team to support effective behaviours and review any underperformance.
Use an incentive scheme to motivate the team and drive strong results. Sales targets should be communicated every day and strong performance rewarded. A manager’s incentive scheme will also help improve your GP and labour costs by tying a cash or non-cash incentive to low beverage, food and labour costs achieved.
KNOW YOUR MODEL
A clear financial model sets the basic expectations and targets for financial performance, and provides a framework for holding to account any substandard results. Decide what you want to achieve across sales, food, beverage and labour costs, and bottom line profitability and communicate this to your team.
PROVIDE THE TOOLS
Provide the tools and training to ensure the people responsible for achieving those targets are properly equipped to do so. A complete set of financial and operational tools is made up of around 45 worksheets and processes that support performance and drive results across the core KPIs of sales, food, beverage, labour and all other expenses. Invest the time to develop these tools, implement them, and train your key people to use them, and you will start to see immediate and sustainable results.
DON’T BE FOOLED
Strong sales don’t necessarily mean strong performance. Converting sales into best profitability through the use of a complete set of operational and financial tools will speed up the recovery process and ensure the business performs at its best in the long run.
Read the full article here: https://www.femalefirst.co.uk/foodanddrink/how-to-turnaround-your-food-and-beverage-business-post-lockdown-1298283.html