Today’s podcast is being published on December 22, 2019. We are about to enter a NEW Decade. Do you have your budget and business plan ready for 2020? Have you shared your vision for 2020 with your staff? Are THEY as fired up about 2020 as you are?
Hey It’s Peter Harman The Food Guru here with your weekly Pep Talk…
My goal is the teach restaurant owners, managers and chefs, like you to focus on Eight Basic Fundamentals that lead to a better life and financial freedom.
Today I’m going to give you some things to think about as you build your business plan for 2020 - We are going to start with your 2020 P&L Budget - let’s dive right in...
A P&L Budget has three parts
Costs Goal (cost of goods, labor cost and other cost)
Profit Goal – That’s right – how much money you are going to make next year.
THING ONE: SALES
Take out your P&L from 2019
My 2020 goal for myself and all my clients is to increase your sales by 10% TWICE.
For Example - Imagine your sales were $800K in 2019
Increase your sales by 10% = from $800K to $880K.
Increase that - by the second 10% = from $880K to $968K.
If you are really gung ho like I am - Round it up to a MILLION DOLLARS.
This is your new sales goal for 2020… One Million Dollars in Sales.
Hey – a million dollars in sales is only $20,000 per week.
NOW - DO THIS WITH YOUR NUMBERS FROM 2019.
THINK ABOUT THIS. WHEN YOU OPENED YOUR RESTAURANT YOU WENT FROM ZERO SALES TO WHERE YOU ARE TODAY – RIGHT? Because you made that huge jump - ANOTHER 10% OR 20% SHOULD BE A PIECE OF CAKE!
To Get The First 10% Price Increase – is easier than you think.
Just Raise Your Prices by 10%
My goal is to start a restaurant revolution where every restaurant owner earns at least 10% profit and has enough – to enjoy life.
I talk to restaurant owners every day. Believe me you need to raise prices.
Everything you buy is getting more expensive.
Your Employees want more!
The Governor wants a more!
Grocery Prices have gone up more than 10% in the last 2 years.
The business model that most restaurants are using is BROKEN.
It’s time to raise prices! You are NOT Walmart!
The second 10% Sales Increase will come from…
Improving the way you operate your restaurant
Improving your systems
Improving the quality of your food and drinks.
Improving the way you train your staff
Improving the way your staff serves your customers, guests and clients.
To do this with your numbers
Take your sales for 2019 and multiply them times 10% - Twice…
Don’t be afraid - You CAN do it… It’s time to stop thinking small…
This is a new decade - it’s time to start thinking big!
Take a walk around the block and imagine how TWO - 10% sales increases will improve your life. Think about it - What is your personal financial goal? is it to take home $50K - $100K - $200K or $500K? I know with 100% certainty that you can’t afford to lose more money or continue to feed your restaurant. BUT – What is your real secret goal – you know the one that you WISH you could have – the one that you swallow and keep to yourself and don’t share with anybody else… Because it’s TOO audacious.
That’s the goal I want to help you achieve. This is the YEAR. I AM your coach!
Now I want you to do these things with your new SALES GOAL.
Paint the number BOLDLY on your office wall & on the kitchen wall
Share this number with your managers and your staff
Tell them how this will improve THEIR lives…
Get your people involved
Work with your people to find ways to achieve the goal.
THING TWO – COSTS & EXPENSES:
Cost of Goods
This includes what you spend to buy ALL your Food & Beverage items (your groceries)
Cost of Goods is a variable cost, which means, if we don’t do the business, we don’t cook the food or make the drinks, at least in theory.
This includes ALL the food you purchase
Divided by your gross food sales.
If your food cost is lower than 30% - leave it there.
If it is higher - lower it to 30% and plug that number into your budget.
This includes ALL the coffee, tea, soda, beer, wine and booze you purchase.
Divided by your gross bar sales.
If your bar cost is lower than 25% - leave it there.
If it is higher than 25%, lower it to 25% and plug that number into you budget.
This is what you pay your staff – plus payroll taxes, casual labor and benefits.
That’s right health insurance and other benefits belong in the Labor Cost Category.
Don’t add these things to your guest check as a TAX – That is a cowardice act.
Have the balls to charge what your goods and services are worth.
For this exercise I want you to keep your labor numbers the same as they are this year.
Another way to say that is – we are going to freeze our labor at whatever we spent last year.
This doesn’t mean, nobody gets a raise, it just means we are freezing the total labor number where it was last year.
Think about it, I know, you had some wasted labor hours and labor dollars last year.
I know you have some people who do more than other people.
Think of the game Pac Man – the people who do the most – get paid the most!
The goal for this year is to run smarter and tighter.
Other cost is everything else
Rent, utilities, trash removal, marketing, credit card fees and so on.
Keep your Other Cost number the same as they were in 2019.
I call this Z.O.G. - Zero Overhead Growth.
Say it with me – Zero Overhead Growth… Zero Overhead Growth
Let’s all take an OATH… Zero Overhead Growth… Fun Right?
Go over your P&L from last year (Line by line) to see what you spent last year and make the necessary adjustments.
Here’s a TIP – Don’t just look at last January’s numbers when writing the January 2020 budget, October, November and December are probably more accurate, because they are more recent. Always use the most accurate and realistic numbers.
THING THREE - PROFIT
The Goal is to Run a 30-30-30-10
30% Cost of Goods
30% Labor Cost
30% Other Cost
AND a 10% Profit
Ladies & Gentlemen if you have been listening to my podcast or reading the show notes for awhile you know that 10% Profit is my Goal for every restaurant I work with. I want to start a restaurant revolution – where every restaurant owner who works with me has a 10% Profit.
10% Profit is The GOLD Standard of Restauranting!
Did you know that only the TOP 5% of all restaurants in America meet this Gold Standard and earn a 10% Profit? It’s time for you to join the club! Yes- It’s a very exclusive club. AND - I know that you can do it - IF - you set the goal and do the work to make it happen…
Build Your 2020 Budget – NOW.
I really want you to take a few minutes and do this exercise before the end of the year.
Increase last years sales by 10% TWICE…
Subtract Costs (cost of goods, labor and other) from sales
This will be your profit goal for 2020.
I bet it will look a lot better than - your profit for this year.
Here are the steps to make your new budget a reality.
Increase your prices by 10% across the board.
Stop discounting and giving your stuff away for FREE – You are NOT Walmart!
It’s time to grow some balls and charge FULL Price!
Get the second 10% sales increase by - Adding value to your business
When your business is BETTER your VALUE is BETTER
Better Business will have better sales.
People are willing to spend more money on BETTER things.
You will IMPROVE by asking a simple question to yourself and every person on your team. Have a meeting with your key people and SET THE GOAL, then ask these questions.
What is it going to take to make our customers happier and more satisfied?
How can we do this BETTER & SMARTER?
Start talking about how to do everything – BETTER!
Measure Your Performance DAILY.
Create a BEAT Last Year Chart.
Start with the first day of January and go all the way through the month.
Be sure to line up the days of the week.
Monday must line up with Monday & Saturday must line up with Saturday.
Write last year’s sales in the left column.
Write this year’s sales in the right column
Post it where your staff can see it every day.
The goal is to beat last year by at least 10% and make your VISION – Reality!
If you want to have a better year - next year than you did last year… You need to set some simple goals. Then, you must share your goals with the staff and get them to help make your dreams reality!
HERE’S THE BIG POINT FOLKS…
DON’T WRITE A BUDGET for 2020 UNLESS IT HAS A 10% PROFIT!
THE GOAL IS A 10% PROFIT – WHY WOULD YOU WRITE A BUDGET WITH A 5% PROFIT?
OR NO PROFIT? WHAT’S THE POINT OF PLAYING A LOSING GAME?
Here are the steps
Print your year to date P&L statement.
Increase your sales by 10% - TWICE
Set a goal to run a 30% (or lower) Cost of Goods
Freeze Labor Cost where it was for 2019.
Freeze Other Cost where it was for 2019.
When you have sales goals, cost goals and profit goals - all you have to do is figure out how to make it happen. When you don’t have financial goals – you are DEAD MEAT!
If you need help figuring your numbers and building a plan for 2020 – come to food guru . com and sign up for a coaching session. The first coaching session is FREE – What do you possibly have to lose?
My Name is Peter Harman, I am the Food Guru. My goal is to start a restaurant revolution where every restaurant owner and manager who joins us has the information they need to earn a 10% Profit, create financial freedom and live the life of their dreams. If you really want to get to the next level in the next 90-Days, here’s my simple Plan.
1- SUBSCRIBE TO THIS PODCAST:
a. This weekly pep talk will keep you on your toes and give you inspiration to keep moving forward.
2- BUY MY BOOK:
a. I have written a book called Restauranting 101, it focuses on Eight Basic Fundamentals
b. It has the power to change your life
c. Go to amazon and type in Peter Harman - Restauranting 101 ,and it’ll pop up…
d. Buy it and Read it – Today!
Then, - come to food guru . com and…
3- SIGN UP FOR A ONE ON ONE COACHING SESSION…
a. As a restaurant owner you need someone to talk to
b. Someone who understands your struggles and can help you build a strategic plan,
c. We all need a Coach to hold us ACCOUNTABLE for our actions and results.
d. This is NOT a webinar or large group event, I will not pass you off to an assistant.
e. This is you and me working together to solve your problems…
f. Working together to help you – build a better restaurant…
I Guarantee: A one on one coaching session with me will be the best thing you’ll do for your business this year…
RESTAURANTING is NOT Rocket Science
It’s way harder than rocket science. Rocket science is a finite math equation.
E = MC2 = Easy. We have lots of computers and smart math people who can do it.
Restauranting is HARD. That’s why 86% of all restaurants – fail in the first 5 years.
That's why only 5% of all restaurants earn a 10% Profit. - That’s WHY you need a coach.
Think about this opportunity for a second… What are you waiting for? What do you have to lose? Are you going to wait until spring to start making changes – Or are you going to take the bull by the horns and BUILD A BETTER RESTAURANT - TODAY…
When the student is ready… The Food Guru will appear… I want to be your coach…
This week your homework assignment is to – read my book and Build your budget for 2020… and contact me so I can review it with you…
Let's start 2020 on the right foot... I hope to hear from you soon…