5 Key Reports Every Hospo Business Owner Needs To Know
Words by Jonny McKenzie - Founder and Cocktail Maker at posBoss
During 2018 I had the opportunity to share a coffee with more than 150 hospo owner-operators across New Zealand and Australia. I naturally ask how business is going and the most common response is some form of ‘Good. Busy, but good’ with a follow up comment around looking at ways to grow.
What I’ve learnt from answering posBoss’ after hours support is that financial questions come in at the strangest of hours, the timing of which is often - I’ve finally got a chance to look at them...
So I wanted to share with you why I think taking 30 mins a week can save you money, reduce your anxiety and help you grow your business.
Firstly, I should note that when I say 30 mins a week I really do mean 30 minutes. The key here is the time of day you take these 30 minutes to look at how your business is going.
The majority of us probably think about checking the financials after getting home or possibly just before the breakfast, lunch or dinner rush. Sadly, most of the time this is actually the worst time to find that 30 minutes.
Hospitality has a great ability to turn a well-planned day into a shambles & so by the time you get to look at your numbers you have a million messages to respond to, staff asking for help or you are just simply exhausted. So my tip on this one is to force yourself to book out 30 minutes at 9:30am on a Thursday. By then payroll is hopefully sorted, banking is in for last week & ideally you have a handle on what is needed for the coming weekend.
I used to head to a neighbouring cafe, get a drink & put headphones on so nobody interrupted.
There are many different reports, figures, tips, etc. that you can look at and due to the sheer number of reports provided to you these days, we end up not really looking at any of them.
This is why it’s key to review these 5 key reports weekly:
1. Total weekly sales
The first key number to review is how the week went sales-wise. The sooner you start to review this number the sooner we can begin to make a plan on how to grow it.
The reason we want to review this number first is so we can start to get an idea of what we are expecting weekly & begin to understand what can cause this number to go up or down.
Once you start seeing this number weekly, you can start to ask more from it.
A key task I asked my team to do daily was write a sentence on each days trade; a simple task that gave me invaluable insight into why the week’s total ended as it did.
2. Staff Sales
We all know staff costs are one of the trickier costs to manage. With timesheets changing each week it takes admin time to collate, check & process. What’s fascinated me over the past 4 years of talking to owner-operators (and has lead to us building our Staff Sales Summary Report) is that rarely could anyone let me know how the team were performing. Sure, you have the total for the day but in a market when finding talent is tricky, holding onto them is also like a full time role. Viewing this report can give you big insights into that daily behaviour of your team.
However, It’s not always the top seller that you are looking out for; It’s about learning how they are using the till.
Look out for trends like:
High use of discounts with high turnover. This could result in great customer service where this staff member drives the up-sell from regulars but to show thanks for patronage they balance out the up-sell with a small discount that displays on the bill.
Ideally you want to sit down with the team or (even better) each employee and discuss their numbers - being cautious to keep these type of meetings about hitting targets and working out ways to improve. Take the time to give them informed and constructive feedback and praise the positives otherwise you may find yourself continuously hunting for staff.
3. Top 10 - Know your recipes
Over the years I’ve had many discussions with colleagues around ‘big sellers’. For my bars, it was always the Vodka Twist. Being in the top 10 means they are probably hot favourites on your list but it also means that your team may become complacent in making these items. This can result in over-pours, larger serving sizes & increased ingredient measurements.
This was a major learning for me.
To give context, the Vodka Twist sold at $10. It cost $2.61 to make (based on the recipe) and we sold ~600 a week. So Turnover = $6000, Cost = $1,710, leaving $4,290 to work with.
That all looked good however after about 8 months of this being the biggest seller I asked the team what the recipe was. The result was that we were making it for $3.26. A simple 5mls here & there for the 4 ingredients resulted in a $246 per week increase of costs.
So I can’t stress enough how important it is to check the recipes of your top 10 & make sure the team know what the recipes are. We built the recipe builder inside each item on the management site for this reason, and built staff member logins that only have access to the items and menu (and not your financials).
4. The Top 10 - Why are they there?
So you know what your top selling items are but have you ever taken the time to really think why this is?
Knowing why items are in your Top 10 gives you a much better understanding of your clientele and what changes you could make to your menu to increase their spend.
Is it a particular flavour? price point? serving size?... that sees these items selling more? Or do they match well together resulting in a double sale?
For us, the Vodka Twist had a classic flavour combo: Passionfruit, Lime & Elderflower. A combination that can’t really go wrong. However, we never sat to think why this was the big seller. Was it that our customers had a sweet tooth or had a thing for passionfruit?
Had we learnt what this was, we could have reviewed our list to make sure these customers had a next drink option. Instead we concentrated heavily on trying to get the other drinks numbers up. This meant we missed out on a golden opportunity to storyboard their experience by creating a second drink in a similar flavour genre but at a higher price point. This would be an Ideal up-sell, resulting in a second drink and an increased spend per head.
5. Wastage Report
The last one is probably the most painful. Reviewing what was placed on the Wastage account for the week can cause many questions to be asked, but the sole reason I believe it’s important to constantly review is that this is where you can make daily changes to reduce money being thrown out the door.
The example I have shows what can happen when a wastage issue is not given the proper amount of time to review.
We had an issue where daily the team had 2-3 scones & muffins left unsold at the end of the day. My chef decided the way to fix this would be to reduce the number of scones & muffins we bake in the morning.
This seemed logical however this didn’t actually solve the problem.
We continued to have 2-3 items left at the end of the day but with less to sell we were missing $100 a week in scone & muffin sales. Had I been reviewing my wastage report on a weekly basis I would have seen this common trend in leftover food to discuss with the team what was being done about it.
With my chef not responsible for daily cash ups they were unaware of the impact their actions had had on our turnover.
Reviewing an easy-to-access wastage report weekly - one that shows me the exact items and amounts being thrown out - would have allowed me to try alternative solutions (such as removing the lowest selling muffin or changing my display). Having this kind of Control in your hospo business is essential.
Need these reports in your life? Get in touch with the posBoss team!