12 Common Reasons Underperforming F&B Outlets Don't Make Money.
Scot Turner
Rewriting the Rules of Hotel F&B | Founder of Award-Winning Auden Hospitality | Podcast Host | International Keynote Speaker
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This week's best-performing post is a great one.
When I wrote this I wanted to show how focusing on profit can often be the wrong strategy to improve performance.
We are a revenue business and while that may sound obvious it isn't to many because we become obsessed with profit.
Yes, profit is important but I always tell people that profit is the only line on the P&L you can't directly influence because it's a formula, not a value.
So let's deep dive into the 12 common reasons underperforming F&B outlets don't make money.
(Reminder: Don't ignore 2, 5, 6, 11 & 12)
1. Focus on profit.
By focussing too often on profit it becomes the only thing that's important, it starts to impact your decisions and quite often operators revert to cost cutting as it is far easier to cut costs than generate revenue, especially in a struggling environment.
2. Blame the 'new' generation for poor turnover.
The new generation are some of the most creative minds in our businesses, the problem is, unlike the generation before, they won't put up with menial tasks, broken promises and a work orientated life balance. So if you are blaming the new generation, it's likely that you are the one who needs to change.
3. Look at how to shave a point off your labour cost.
Cut labour cost and unless you haven't been managing efficiency up to this point, you are going to put your team under pressure, overwhelm them and put them at risk of burnout, is one point really that important?
Focus on revenue and you are going to need them!
4. Look at how you can save a point off your food cost.
Putting your team under pressure to cut costs will mean that (and in the assumption you are paying the best prices) undoubtedly quality and/or experience will suffer. This can either be in the quality of the produce you are buying or you are going to increase prices that will impact how guests perceive the value of your brand.
5. Sit in meetings all-day.
The most inspirational leaders I have worked with have been always been 'available' and regularly present on the floor. It's the only way to truly run your operation so don't allow yourself to be sat in pointless meetings - it doesn't help your team, it doesn't help your productivity and it definitely doesn't help your guests.
6. Put process over innovation.
Process kills innovation, simple. Allow your team to be creative and don't put roadblocks in the way - purchasing red tape, sitting on purchase orders or needing too many approvals.
It stunts agility, impacts revenue and frustrates your team.
7. Ignore your stakeholders.
Forget senior management, the true stakeholders in any business are your guests and your team.
Suck as much feedback as you can from them and use recurring trends to create your action plan to grow your performance.
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8. Focus on your investors.
Your investors want a return, I understand it but they are often so far removed from the operation and too subjective to give proper insights.
This is where using your stakeholders backed up with data means that you can present the correct way forward to them in a simple and objective way.
When we do this with our clients we create arguments around four key pillars, it really help frame your proposal, here they are;
Revenue
Cost
Quality
People
9. Accept poor behaviour because they are great at their job.
Poor behaviour kills any culture you are trying to create, don't accept it - it's simple but true.
Look at sports teams who have the same issue, it's very rare they are allowed to continue being part of the group while these issues continue - it's the same with hospitality.
10. Cut corners for the sake of profit.
Your guests and teams will notice when you are cutting corners, don't do it!
11. Ignore the data and lead by opinion.
"In my opinion" - one of the worst phrases in hotels.
Use data to show you where you need to improve - looking at a menu engineering? Don't use what the chef and RM think is selling, use your POS system to tell you.
12. Constantly change direction and strategy.
People like stability, it's ingrained in us. It is important to have faith in your strategy and give it the time to grow. If you change too quickly it looks like panic and people see this and it looks bad.
Don't resort to impact marketing as this never helps, it's back to that point above, you bring peaks in revenue, and reduced staffing puts your team under more pressure and impacts your guest experience.
Simply put... focus on...
Revenue & People
That's it for this week, see you next time
Scot ✌🏼
And finally...
If you need help curating your F&B experience, don't hesitate to reach out to us at Auden Hospitality, we are on a mission to make hotel F&B great again.
If you prefer email, contact me directly at scot@audenhospitality.com
If you want to hear from some of the most creative thought leaders in the industry, then head to your favourite podcast platform and search for Hospitality Huddles, Where Hospitality Meets Conversation: Unveiling the Industry's Secrets, One Huddle at a Time.
This week I spoke to Wouter de Graaf from Hospo.life about why so many students studying hospitality don't graduate into the industry.
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1yWell said, thanks for sharing.
Love this , keep them coming !