Targets = Clarity

Do you set financial targets for your food business? If not then I would suggest that you start. Assuming that your bakery, café or restaurant is a business and not a hobby then it needs to generate profit. Exactly how much profit depends on your circumstances; your lifestyle now, the lifestyle you would like to have in the future and whether the business is the only source of income for your household, will all impact the amount of money you need. When working out how much profit you need to make, don’t forget any business debts you might be repaying. If you have borrowed money to invest in the business, your profits will also need to cover those repayments.

Once you know how much profit you need/want to make you can make a plan. If you are already making enough profit, congratulations! Keep doing what you’re doing. Don’t stop tracking your numbers though, if costs creep up you can end up taking a hit in profit for a while without noticing if you don’t keep an eye on your figures.

If there is a gap between where you are and where you want to be, that’s ok, that’s where most food business owners find themselves. How much extra revenue would be needed to close that gap? Look at your average spend per customer, how many more customers would you need to make up the shortfall? When did you last put your prices up, are you overdue a price increase? What percentage of your revenue is going on staff and ingredients costs? Could this be reduced? Perhaps you are paying staff for more than hours than you really need or perhaps you could reengineer your menu to be more profitable and reduce waste. There are lots of possibilities. When you know where you are going it is much easier to make a plan for how to get there. Getting your business from where it is now to where you want it to be is unlikely to happen overnight but if you have a clear target it is much easier to come up with a plan and implement it.