Some pub and restaurants owners like to keep their financial data very private and not share any information with their managers and employees. The purpose of this post is to explain how you can give limited information to managers, that will help improve the organisations profitability, without letting managers know exactly what the restaurant or pub profitability is. The best way to achieve this is through regular and systemised Key Performance Indicator reporting and tracking.
KPI reporting involves looking at the key controllable numbers in your business. They key numbers in a hotel or restaurant are revenue, gross profit and wages. If you develop a report that shows these numbers to your managers, they will be able to focus on improving these numbers, which in turn will improve a pub or restaurants profitability. You can even produce these reports by department, for example you can have one report for the kitchen only and another for the remainder of the business. If you have separate areas in your or restaurant, such as a sports bar and a bistro bar, then you can produce one for each. This can incentivise managers form different areas to improve their results as well. The important thing here is that the managers do not compete for revenue, after all it is still one business and all results matter and come into one profit and loss report.
While KPI reporting may seem simple in concept, it is actual the process of preparing the KPI reports and gathering the information quickly enough that is more difficult. There must be a system in place to ensure data is gathered quickly. Automate processes and cloud-based programs make this task a lot easier. There must be specific deadlines for certain tasks. For example, payroll must be completed by a specified date (not necessarily paid, just completed), bills need to be processed and signed off and stocktakes performed.
You will also need targets for each manager to work towards. The target should also be realistic so that the managers believe they can achieve them, however not too easy so that no effort is required. You may also put incentives around these targets so that managers are personally invested in achieving the targets.
Allowing managers to see financial data can be very valuable to a pub or restaurant. It can help improve profitability and incentivise your managers.