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F&B column Planning for Profit All the indications are that 2006 will at best be a soft trading year for hospitality. With a tightening economy we are already seeing a softening of the discretionary dollar. Tourism growth has slowed and there are some indications that for the first time in about a decade numbers could actually drop. This means that businesses are not going to be able to hide behind the strong growth we’ve had in the economy over the last four or five years. Some serious planning and budgeting is therefore called for. There will of course be the usual temptation to simply discount prices to compete for market share. This is not a sustainable option and will simply accelerate business failure. Considered, thorough planning has the potential to not only sustain businesses but to grow profits. How many hospitality business operators have a plan for the year which clearly identifies peaks and troughs, events to be promoted and matches that schedule with a staffing plan? This staffing plan would have staff on leave at the optimum times and staff training scheduled to when it most fits within the weekly cycle. Like any good plan, it will be well marked with good indicators which will be measured each week. If all this sounds like common sense – it is! However, the number of hospitality businesses failing suggest there is scope for a significant improvement. The plan of course is matched by a budget which has targets for turnover for a number of customers, pourage, bed nights, or whatever other key indicators are critical for the business. It is based on this budget that the prices should be set. As a result, a good plan for the year will provide a pathway to profit. Bruce H Robertson 21 February 2006 |
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