Record, Monitor, Adapt
Running a catering business is all about margins – you know that as well as I do. Measuring is the key to real success as this arms you with the information you need to make changes and adapt to trends.
First things first, what are the things you need to monitor? I’m a great believer in keeping things simple. Yes there is whizzy software out there that will measure every aspect of your business and display it on a colourful dashboard BUT, there is merit in using a good old fashioned piece of paper or spreadsheet, at least just to get you started.
What really matters is constant recording, constant reviewing and constant adaptability to not only breakeven but thrive. It’s no good looking at the Accountant’s report at the end of the year and seeing you only made 12% profit – the power to change that is in every single day. Now.
|SALES||From daily sales records||Seems obvious really – this is the total money into the business. Without knowing this you have no starting point|
|FOOD COSTS||From weekly expenditure records – this is the money you spend on supplies directly related to the service delivery||Food costs are a fundamental of doing business. Until you know what you spend on supplies, you cant start to consider whether there are savings or efficiencies to make|
|STAFF COSTS||Daily timesheets||Staff will be the biggest expense in most businesses but they are also the most variable and can be managed in accordance with SALES|
|PORTION CONTROL||Monitoring food that comes back to the kitchen – I used to have clear buckets that were labeled ‘salad garnish’, ‘chips’ etc and then weigh them at the end of service. This is an eye opener to most chefs and operators!||Wastage is literally money thrown in the bin – reducing it directly increases profit and it's so easy to adjust and still keep customers happy. Obviously this is directly lined to FOOD COSTS|
There are also other general overheads you should monitor, specifically cleaning costs and utility costs as these are highly competitive markets and better prices can be found with a little bit of ‘shopping around’.
There are hundreds of things that can throw you off target. Sunday Roasts are a prime example. You may assume there is a 60% profit margin on this dish, but have you accounted for condiments, meat shrinkage, napkins, staff dinners and the wastage of throwing meat away at the end of the night if you are not using it the next day.
It is this handful of Key Performance Indicators (KPIs) that will tell you the most about your business. Of course there is so much detail you could delve into – and indeed should in time – but as a starting point, record, monitor and adapt your business with these four key things and you are sure to feel more in control of your End of Year Accounts!
P.S. Even analyzing chips is important – the difference between triple-cooked-home-made and bought-in can be as much as £5000 per year!! Do your customers really know the difference? Check out this fact sheet to help you decide.