FACING YOU FINANCIAL PICTURE
Are you looking at your financial picture? If not, it's time: let's have a conversation about numbers. Where are you this year/this month/this day in terms of your goals and projections? Have you ever set financial goals and projections? Are you only focused on basic financial information in your business: prime costs, food costs, labor costs? Do you manage your own bookkeeping or source this out? Do you enter all your numbers in house, using Quickbooks? Do you hate the topic of numbers?!?
A phrase that stayed constant in my mind when I ran my cafe was, "Are you willing to look at finances? If not, you cannot possible expect a different outcome." Which is a corollary of, "If you keep doing the same things, and expect different results, you will be disappointed".
That is where financial freedom lies. Face them. Look at them. How it could be better? If you cannot see a stronger outcome, seek a professional who can because their is room for improvement. Here are three guiding principals for you as a business owner:
1. LOOK AT YOUR NUMBERS
Know that you are not alone. Owners of food-based businesses often have a phobia when it comes to numbers. Business owners are, of course, allowed passion, but at the risk of knowing your financial situation. Managing your finances has as much value, as tasting what your chef is putting on a plate, or what a cheesemaker is packaging in a gorgeous cheese paper!
Teach yourself to look at numbers: mark a date on your calendar to learn the art of bean-counting. Set simple weekly and monthly goals. Any goal is better than none. Every month, force yourself to look at your business' profit and loss statement. If you look at it and nothing funnels into your brain to solve, then talk to your accountant to understand the areas require attention. Benchmarks are the guiding principals that can help you know if you are meeting targets or need help.
2. LOOK AT YOUR GOALS
By reviewing your finance and accepting there is always a need for improvement, you can set appropriate goals. As Yogi Berra said, "If you don't know where you are going, you'll end up someplace else". Quite ofter, owners owner share goals in every other area of their business, but neglect financial goals which are arguably the most essential. Goals can only be met when they are set.
An example: Year after year, m cafe, Boheme Cafe, achieved a 10% increase in business with little strategic effort. This was a significant achievement. But when tough economic times hit our customers' pocketbooks, we realized that we relied on that 10% growth and now we had to strategize how to keep that growth. With money tight, we needed to scrutinize our operations to find strategic ways to grow. We looked at product mix, customer spending and marketing to find ways to improve our numbers. We created marketing incentives to reward our customers and show them we valued their patronage. We gave away free cookies on certain days without affecting our bottom line because we studied our numbers. We analyzed food costs on several items and bundled where we could still pofit on items that proved consistent demand. It was analysis and simple math…understanding our profits and matching that with customer preferences meant we continued to grow when the economy stagnated.
3. LOOK FOR FINANCIAL ADVICE FROM PROFESSIONALS
An example of online help: Every food-based business I work with has seen value in signing up for RestaurantOwner.com. This website has discussions about finances; articles to help owners focus precisely on one aspect of their food costs or labor costs; and it has many excel spreadsheets that allow the user to imply plug in numbers for analysis. It may be awkward strategy at first but setting strategy around numbers leads to new habits and ultimately that mean financial relief.
An example of professional help: Seek out a professional that you know will happily help you learn from your own numbers. Consider setting up a phone call or an in-person meeting, to ask for an initial consult. Ask them to keep reminding you and teaching you to improve what you know, and how to put knowledge into action.
So, as you face your own financial concerns, remember. It's simply a matter of looking at your numbers, finding the information you need to solve financial concerns and feeding yourself the financial solutions that lead to financial freedoms. Consider, too, that the book Financial Intelligence will give you solace. Buy it today and refer to it regularly.