"Therefore, structure warfare according to the following five factors, evaluate it comparatively through estimations, and seek out its true nature"
This seemed appropriate, especially today, as I had spent the morning talking to a client about what analysis he wanted for his business. At the minute he uses no sales or cost figures at all other than those required quarterly for VAT.
When it comes to measuring and analysing as a basis for decision making there are a pair of phrases that I hold in mind.
"Paralysis by Analysis"
versus
"Extinction by Instinct"
People either spend so long looking at information and research that they do nothing and are a sitting duck, or they try everything based on hunches and get run over when they forget to look the right way down the road.
There is, of course, a balance to be struck between the two extremes. There are standard measure that an industry use as well as banks, accountants and financiers. These allow bench-marking, decisions made from factual knowledge and the ability to back up hunches. All helping to make decisions, improve the business performance and control costs.
The key is to know what is going in in your industry, look to the trend setting places and countries and see what is coming down the line. Look at your key percentages and watch for fluctuations, understand them. Look for patterns emerging and comparing them to what you know about your market, the market generally and your competition.
BUT
Don't be led by the numbers and the analysis - make them work for you. Use them to help shape and mold your vision not control and change it.
Above all take time out regularly to think about your business.
The client above? We decided to start with:
Sales: Broken down into key product areas (Food - Platters + Menu Items, Retail food, Coffee, Drinks) and by eat-in v. take-away
Direct Costs: (Food, Retail Food, Coffee, Drinks) broken down by supplier
Consumables: (packaging directly used in takeaway items)
Wages: (Basic, PAYE, NI)
(for all the above a basic analysis weekly, detailed analysis monthly (backed up by stocktake)
Other Costs: broken down by key line items and supplier
~~~~~~~~~
Some great resources for trends include:
http://www.springwise.com/
http://www.qsrmagazine.com/
http://www.trendhunter.com/
A great list of some key measures (But if you won't use them don't collect them!)
http://www.profitablehospitality.com/public/88.cfm
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2 comments:
Just came across this great blog post from Shaa Wasmund
Shaa Blog
Great reasons why you should not always listen to the analysts!
Amazon’s Jeff Bezons was recently quoted as saying “To create anything great, you must be willing to be misunderstood for long periods of time”
Another relevant blog from
Seth Godin
What happens if you spend too long analysing your competition! You begin to define yourselves in their terms!
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