Food and beverage profit sometimes feels illusive and for good reason. Changes in labor laws and minimum wages as well increased challenges in F&B supply chain management continue to pull on our ability to run a food and beverage establishment and be profitable. Remember, at it’s more basic form, revenue – expenses = profit. An easy conclusion to establish and challenging to achieve. My goal with the tips I provide here on my website and in my books is to provide thoughts and insights I have gathered from my own experience in food and beverage management.
I hope that you will join me here and share with your friends and colleagues in the industry as well as increase your insights and perhaps look at your costs and profit again in a different light. Profit is essential to any business and I hope my tips and actions plans will help you realise a fair profit for the products and services you provide to your customers over and over again. It’s my strong belief that if you can control and manage your costs you can also control and manage your profit.
Profit comes with its own warnings and herein rests the paradox; if you focus solely on controlling costs your service and customers suffer. If you focus only on the service to your customers, the costs and your profitability suffer. The act of serving your customers incurs costs; it’s therefore wise to consider the concept of sufficiency – – creating value, value to the business, value to your employees and value to your customers enabling them to continue to visit your food and beverage establishment is an essential business practice. In your business activities, finding the combination that is right for all your stake-holders, that is the business ownership, staff members, customers and the community at large is vital. Yes, I do advocate managing and lowering your costs where applicable but remember there is a fine balance between managing costs and the level of guest satisfaction. It’s largely about the value you repeatedly deliver to your customers, if they perceive the value they receive from you as low, regardless of what measures you have in place to control costs will be meaningless without customers!
Profit is not the result of taking chances, and it’s not what’s left over after you pay all the bills, it’s based on careful considerations and solid business planning and in turn effective business decisions. As I teach my business students, every decision in your business is a financial one, plan wisely and implement carefully.