Today I want to talk to you about knowing your numbers.
Why is this important?
At the moment we’ve seen an increase in the alcohol Duty.
We’ve seen rising inflation in the food prices & cost prices.
Unless you know your numbers you don’t know how you’re able to manipulate your selling prices to keep the same GP, or even increase it.
We’ve probably all heard of the expression Big Data.
Big pub groups, big restaurant groups, the Nationals & the multiples – they all dig into their data.
Most of you will have a decent EPOS system that will give you a lot of data, but unless you know what you’re looking at, and you analyse that data, having an EPOS till could be a waste of time!
I’ve seen one post this week online where they were talking about and putting their prices up, the price increases due to the change in the alcohol duty.
They had decided to put their spirit prices up, and they thought oh that would probably be enough to mitigate any other further price rises. The trouble with that is if you don’t know your sales mix, then it’s a temptation to put spirit prices up.
I see this annually when we hit February, March, April, and all the all the Breweries put their prices up.
Clients say to me… we’re going to put the spirits up.
Yeah but your sales mix says your draft products are like sixty percent of your turnover!
If you’re not going to put those up, you’re not selling enough of the other products in your establishment to make up the difference.
So without your numbers, without your data, you can’t make informed decisions.
I’ve had it in the past where I’ve done a stock take.
I did a wet and a food stock take at a place.
GPs (Gross profits) were fantastic on the food and the wet, and overall.
There was negligible surface deficit, didn’t appear to be anybody on the take.
But he said to me, but I’ve never got any money, I can’t pay my bills.
I asked them – ‘Do you know what your breakeven point is?’
[ And do you if you are reading this? No? ]
Then I got them to phone the accountant, and to get the break-even point, I did a quick set of sums, and his GPS was great, but he wasn’t taking enough money to cover his fixed costs. So they were missing their break-even point!!
On your food, if you’re looking at changing your prices of your dishes, unless you know what your big sellers are it’s no good just changing, say the steak. That you might sell three or four of – you’ve got a big big steak!
You do three or four of those a week and you want to change that.
That’s not going to make it.
You need to know which are your big sellers, with your big margins.
Unless you’re on top of that data, it’s like knowing what percentage of wages are of your weekly take.
Unless you’re big into your data, you dig in it, put time aside every week, work with your professionals, that’s the accountant, your stock taker. It’s the only way you’re going to go forward.
So pay attention to your data, pay attention to your numbers, and that will help you hopefully survive.