Many staff assume a business is ‘automatically profitable’, and all they need to do is turn up for their shift. This lack of understanding also undermines accountability – without number training for staff, your team don’t understand how they can make a difference to increase restaurant profits. In fact, most staff have a poor understanding of the concept of profit and loss – that sales need to be more than expenses for a business to survive.
‘Bad boss’ stories are everywhere—in the media and from friends and parents. We need more hero stories about good business—profitable, productive, and creating a positive impact in the community. Good businesses can pay good wages and offer the best conditions.
How to help restaurant staff understand the importance of profit…
Explain how the tax system works. Tax is paid on profits, and GST is paid on sales. People also pay tax on the wages they earn. The more sales, wages, and profits, the more tax revenue there is to pay for schools, roads, and hospitals. Show the amount of GST paid on a typical customer purchase. For example, a $5.50 coffee in Australia would include 50c of GST that goes to the government.
Discuss business failures. Ask staff to think about an unsuccessful business they know or have worked in – what did the staff miss out on, and what was the equipment like? When failure stories come up in the media, discuss why the business was not successful – it will be fairly obvious once they understand about high rents and the reality of wage costs.
Talk about staff perks and benefits. Better uniforms, proper training, staff meals and time off are usually a feature of a profitable business, and hard to find in one that is not making money. Training could include sponsoring staff to obtain certifications or attend workshops that enhance their skills and service levels, which in turn can lead to career advancement opportunities within the business
Equipment and technology cost a lot of money. Successful businesses are usually more invested in quality equipment, digital systems, and automation. Ask staff how that affects their jobs compared to other places they have worked. Compare the POS system, digital signage, website, kitchen, and coffee equipment—show how much these cost. For example, a coffee machine can cost as much as a small car!
The benefits of having staff understand how to increase restaurant profits
‘Staff engagement’ is a popular term when people talk about business success, and it’s based on care, openness and trust. Financial understanding of how a business works is a key part of that. Staff who understand the impact of financial decisions will actively look for ways to save money and increase Average Customer Spend. When staff understand this, you also have the basis for a powerful and effective bonus scheme – staff share in success, and the business owners have even greater benefits.
Number training for staff will make a difference…
Do Recipe Costing: this is a good way to start employees on financial education – start with costing some beverages (FOH) and popular meals. Use a calculator and recipe cards, or a simple online costing system like CookKeepBook or share your own recipe costings. See also: Improving Number Skills for Chefs
Show the Full Cost of Employing People: wages, superannuation, workers compensation, uniforms etc. Take a hypothetical person’s wage and work out all the ‘add-ons’ to find the real cost of employing them.
Explain a Profit & Loss Statement: Work with managers and key staff so they understand a business P&L – as much as you are happy to share. Use a hypothetical one if you prefer. Many businesses are finding value in open-book management, where the reality of costs and sales are shared openly.
Share Utility Bills: The cost of gas, electricity, water, and waste is usually huge in restaurants and cafes. Put them on the noticeboard when they come in to give a reality check for everyone who leaves lights on or taps running. See also Understanding Energy Use: A Restaurant’s Guide to Lower Costs.
Explain Reinvestment: how profits are often returned to the business to improve facilities or expand services. For instance, a profitable year could mean upgrading the kitchen equipment, which makes the work easier and faster for the staff, or renovating the dining area to attract more customers.
Improving the Customer Experience: Give specific examples of how profits have been used to enhance customer experience, such as new furniture or implementing a reservation system that makes booking easier for customers.
Community Engagement and Corporate Social Responsibility: This also costs money. Show how a portion of profits is used to engage with and give back to the community, such as sponsoring local events or charity fundraisers.
Sustainability Initiatives: Discuss how profits have been allocated towards sustainability initiatives, like switching to (more expensive) eco-friendly packaging or installing energy-efficient lighting, which reduce operational costs and appeal to environmentally conscious consumers.
Better Work Amenities: Explain how profitability allows the business to invest in a better work environment, such as more comfortable staff lounges, new lockers, and better equipment to improve overall job satisfaction. See also: How to Offer Better Staff Facilities
When staff understand ‘financial literacy’ and number skills, they will appreciate the need to increase restaurant profits: the importance of cost saving and additional sales. Management accountability also improves when you can open the books and give senior staff more understanding of the business figures. Overcoming the traditional secrecy in hospitality can lead to greater profits and a more valuable business when it’s time to sell – more number training for staff makes a whole lot of sense.
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Many staff assume a business is ‘automatically profitable’, and all they need to do is turn up for their shift. This lack of understanding also undermines accountability – without number training for staff, your team don’t understand how they can make a difference to increase restaurant profits. In fact, most staff have a poor understanding of the concept of profit and loss – that sales need to be more than expenses for a business to survive.
‘Bad boss’ stories are everywhere—in the media and from friends and parents. We need more hero stories about good business—profitable, productive, and creating a positive impact in the community. Good businesses can pay good wages and offer the best conditions.
How to help restaurant staff understand the importance of profit…
Explain how the tax system works. Tax is paid on profits, and GST is paid on sales. People also pay tax on the wages they earn. The more sales, wages, and profits, the more tax revenue there is to pay for schools, roads, and hospitals. Show the amount of GST paid on a typical customer purchase. For example, a $5.50 coffee in Australia would include 50c of GST that goes to the government.
Discuss business failures. Ask staff to think about an unsuccessful business they know or have worked in – what did the staff miss out on, and what was the equipment like? When failure stories come up in the media, discuss why the business was not successful – it will be fairly obvious once they understand about high rents and the reality of wage costs.
Talk about staff perks and benefits. Better uniforms, proper training, staff meals and time off are usually a feature of a profitable business, and hard to find in one that is not making money. Training could include sponsoring staff to obtain certifications or attend workshops that enhance their skills and service levels, which in turn can lead to career advancement opportunities within the business
Equipment and technology cost a lot of money. Successful businesses are usually more invested in quality equipment, digital systems, and automation. Ask staff how that affects their jobs compared to other places they have worked. Compare the POS system, digital signage, website, kitchen, and coffee equipment—show how much these cost. For example, a coffee machine can cost as much as a small car!
The benefits of having staff understand how to increase restaurant profits
‘Staff engagement’ is a popular term when people talk about business success, and it’s based on care, openness and trust. Financial understanding of how a business works is a key part of that. Staff who understand the impact of financial decisions will actively look for ways to save money and increase Average Customer Spend. When staff understand this, you also have the basis for a powerful and effective bonus scheme – staff share in success, and the business owners have even greater benefits.
Number training for staff will make a difference…
Do Recipe Costing: this is a good way to start employees on financial education – start with costing some beverages (FOH) and popular meals. Use a calculator and recipe cards, or a simple online costing system like CookKeepBook or share your own recipe costings. See also: Improving Number Skills for Chefs
Show the Full Cost of Employing People: wages, superannuation, workers compensation, uniforms etc. Take a hypothetical person’s wage and work out all the ‘add-ons’ to find the real cost of employing them.
Explain a Profit & Loss Statement: Work with managers and key staff so they understand a business P&L – as much as you are happy to share. Use a hypothetical one if you prefer. Many businesses are finding value in open-book management, where the reality of costs and sales are shared openly.
Share Utility Bills: The cost of gas, electricity, water, and waste is usually huge in restaurants and cafes. Put them on the noticeboard when they come in to give a reality check for everyone who leaves lights on or taps running. See also Understanding Energy Use: A Restaurant’s Guide to Lower Costs.
Explain Reinvestment: how profits are often returned to the business to improve facilities or expand services. For instance, a profitable year could mean upgrading the kitchen equipment, which makes the work easier and faster for the staff, or renovating the dining area to attract more customers.
Improving the Customer Experience: Give specific examples of how profits have been used to enhance customer experience, such as new furniture or implementing a reservation system that makes booking easier for customers.
Community Engagement and Corporate Social Responsibility: This also costs money. Show how a portion of profits is used to engage with and give back to the community, such as sponsoring local events or charity fundraisers.
Sustainability Initiatives: Discuss how profits have been allocated towards sustainability initiatives, like switching to (more expensive) eco-friendly packaging or installing energy-efficient lighting, which reduce operational costs and appeal to environmentally conscious consumers.
Better Work Amenities: Explain how profitability allows the business to invest in a better work environment, such as more comfortable staff lounges, new lockers, and better equipment to improve overall job satisfaction. See also: How to Offer Better Staff Facilities
When staff understand ‘financial literacy’ and number skills, they will appreciate the need to increase restaurant profits: the importance of cost saving and additional sales. Management accountability also improves when you can open the books and give senior staff more understanding of the business figures. Overcoming the traditional secrecy in hospitality can lead to greater profits and a more valuable business when it’s time to sell – more number training for staff makes a whole lot of sense.
Want to get some 1 on 1 help? Talk to one of our coaches
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