FINANCIAL STRATEGIC THINKING
Thanks God It's Friday!
And this is a new post from lazygourmet...
We can disagree about when things started to go wrong, but the one thing we can all agree on is that the way you perceive and think about your business needs to change if you are to either start, or continue to build success long term.
The days of "you build it and they will come" have gone - if they were ever really here to begin with (another debate for later).
What is necessary now in operating a food service business today is the need to think, plan and act more strategically than you ever have before.
To ask more complex questions and find deeper, more long term answers than you have probably ever done or felt the need to do.
So based on this notion and the work I have been doing with my most successful client through this economic tumult, I would like to propose some areas with which to start.
1. Realize that you have to think long-term continually and not short term constantly.
You have to begin to take a long hard look at your business and determine if there are parts of it you need to let go. Is your catering business really giving you the ROI you need or was it just something that you thought could compliment your dine-in success but really hasn't? Do you really need to hire a GM in order for you to focus enough on having the conversations and doing the work necessary to drive your future success? Is it time to get some help with your marketing or to fine tune your concept to help guests (and yourself) really understand who you are (in your guests perception not yours) and what it is you need to offer (versus what you want)? And to whom you need to offer it? Do you have that business plan (marketing plan?) that helps guide you on a daily basis or is it just something gathering dust on the shelf? Are you just flying by the seat of your pants, reacting to things that happen to you?
2. Prepare to do battle.
People's fears over the economy and for some, the realistic need to cut back on spending isn't going to subside tomorrow. What do you need to do today, tomorrow and the next day, to not just deal with it but to take advantage of it by reconfiguring your business to succeed in spite of it? How can you decrease your break-even point instead of just cutting costs on a shift-by-shift basis as you encounter things you can do without? How do you configure your service and pricing models to add value to the guest experience in a more creative and innovative way that guests respond positively to, without further decreasing margins or diluting your brand? How can you heal the damage already done so that it doesn't become a weak spot moving forward? What hiring, retention and coaching processes need to be begun, changed or done away with entirely in order to be able to change your culture as deep and fast as necessary in order to achieve long-term success?
3. Start to look at what your market will look like in 6 months - a year - two years from now.
How will you fit into it? Will you? What do you need to do now to make sure you succeed in such a market? Are you keeping track of trends? How can you get better at it? Can you improve your networking with the right business minds in your community and market to be able to pick up on unmet needs or opportunities that you need to take advantage of? If you were to open your restaurant 6-12 months from now, would it be the same one you have now? What would you change? Why? Why not now? Will your competitors be the same or will you encounter others? Do you have a plan to constantly and holistically reevaluate your business in order to keep ahead of everyone else? What do you need to do to take the next step and become the trendsetter yourself?
4. Develop your game plan now.
Stop looking at labor, food, rent and training as costs and start to look at them as investments in your success. Measure them as diligently as you do your financial returns and scrutinize not their need but their effectiveness and begin to demand more accountability out of yourself and your staff in reaching your goals. Create a marketing plan that allows you to be able to measure results more efficiently and effectively and that creates the seamlessness and momentum, necessary to make 2+2=5, or 6, or even 7. What can you attack structurally, that can yield you better returns? Shouldn't you revisit that lease to make sure it reflects true market rents given the economy and occupancy rates today? Can you afford to still pay prices from years ago? Have you kept up with demographic shifts in your market? Do you need to move your business to better reflect your proximity to your target market? Do you need to revamp your pricing, menu, production or service processes to be able to add more value to the guest experience you offer?
5. Be more calculating in your risk taking, but don't become risk averse.
Are you making smart purchases that reflect true market pricing or are you still paying for someone else mistakes? Are you renegotiating your vendor agreements to take advantage of lower prices? Are you rebidding those agreements? When is the last time you re-engineered your menu? Is now the time to open that next location in order to consolidate and expand your market share? Or to take advantage of your competitors misfortune? Are you capitalizing on your past success by leveraging your credit levels and terms? Is there any investment you can make to leverage your knowledge of your market or your streamlined operations and gain market share external to your existing business? Is it time to open that BBQ business to capture an altogether different market than your upscale full service venue?
6. Prepare yourself to change with your change.
Are you keeping up on industry trends and best practices? Are you devoting enough time to growing yourself in order to be the best you can be in order to help those around you be the best they can be? Are you investing in your "A" players enough so that they continue to see you as the only place they would ever want to be? Are you trimming the "C" and "D" level talent form your ranks in order to improve not only your operations but also your effectiveness as a leader? Are you raising standards instead of lowering them? Have you purged your business of any "just getting by" or "just surviving" thinking and actions? Or are you continuing to subsidize million dollar mediocrities?
Simply reacting to your circumstances may have allowed you to keep up so far. This isn't true anymore. The competition on the other side of this purging will be fierce; any decision to maintain the status-quo will only end in disaster for you and your business.
Be proactive by developing your strategic thinking skills and put them into action to help you build a better business and a better life for yourself. You deserve it.
Related post: Understand your real job, Would you like to work less and get more done?
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