SLIDE 1
The 2% Time Bomb
Why Most Restaurants Fail
Speakers
Dixie McCurly Stephen Gross
The 2% Time Bomb Why Most Restaurants Fail Speakers Dixie McCurly - - PowerPoint PPT Presentation
The 2% Time Bomb Why Most Restaurants Fail Speakers Dixie McCurly - - PowerPoint PPT Presentation
The 2% Time Bomb Why Most Restaurants Fail Speakers Dixie McCurly Stephen Gross The 2% Time Bomb Why Most Restaurants Fail Agenda - Introductions - - What is The 2% Time Bomb? - - How do you prevent it? - - Q&A - What is The 2% Time
SLIDE 2
SLIDE 3
The 2% Time Bomb
Why Most Restaurants Fail
SLIDE 4
Agenda
- Introductions -
- What is The 2% Time Bomb? -
- How do you prevent it? -
- Q&A -
SLIDE 5
What is The 2% Time Bomb?
SLIDE 6
The 2% Time Bomb?
All of the small, seemingly insignificant,
- ver-runs that cause waste!
2% 2% 2% 2% 2%
SLIDE 7
#1 - Food Costs
Food & Alcohol
Industry Standards = 26-36%
TICK!
SLIDE 8
#2 - Payroll & Benefits
TICK!
Wages, Employer Taxes, Workers’ Comp
Industry Standards = 30% - 40%
SLIDE 9
#3 - Controllable Expenses TICK!
(Sales - Costs - Payroll) = Controllable Expenses
Industry Standards = 7% - 12%
SLIDE 10
#4 - Occupancy Expenses
TICK!
Rent, trash removal, parking/valet, utilities, CAM charges, etc
Industry Standards = 5% - 10%
SLIDE 11
#5 - General & Administrative TICK!
Rentals, Licenses & Permits, laundry & linens, cleaning/janitorial, etc
Industry Standards = 1% - 5%
SLIDE 12
2%: What’s the Big Deal?
Industry Averages
2% Over-run IMPACT $3MM
Food Costs
2% $60,000
Payroll & Benefits
2% $60,000
Controllable Expenses
2% $60,000
Occupancy Exp
2% $60,000
G&A
2% $60,000 WASTE: 10% $300,000
$3,000,000 Revenue * 10% Waste = $300,000
SLIDE 13
Additional Time Bomb Examples
- RENT COSTS % exceed 4%
- CURRENT RATIO below .7:1
- INVENTORY DAYS AVG above 7 days
- LARGE DEBTS at opening
- Cash goes missing by 2%
Now 10% can easily grow to 20%!!
SLIDE 14
The 2% Time Bomb How Do You Prevent It?
SLIDE 15
The 2% Time Bomb How Do You Prevent It?
SLIDE 16
How Do You Diffuse The Bomb?
SLIDE 17
Manage What Works For Successful Restaurants!
i.e. stick to the industry standards
SLIDE 18
Manage What Works For Successful Restaurants!
i.e. stick to the industry standards
SLIDE 19
5 Steps To Help DEFUSE The Time Bomb
- Step 1: Gather insights from annual trends
- Step 2: Troubleshoot profit margins
- Step 3: Reduce Expenses by category
- Step 4: Understand cash flow
- Step 5: Maintain professional systems &
procedures
SLIDE 20
Step 1
Gather Insights From Annual Trends
SLIDE 21
Step 2
Troubleshoot Profit Margins
SLIDE 22
Step 3
Reduce Expenses By Category
SLIDE 23
Step 4
Understand Cash Flow
AP Aging? Cash Balances Actual vs Budget?
Sales % vs Costs %?
SLIDE 24
Step 5
Maintain Professional Systems & Procedures
SLIDE 25
Monthly Meeting Agenda
Monthly Meeting Agenda
SLIDE 26
4%
SLIDE 27
2%
SLIDE 28
2% OK! OK! OK! 2% 2%
SLIDE 29
2% 2% 2%
SLIDE 30
SLIDE 31
The Bottom Line
SLIDE 32
National Sales Growing From Year To Year
SLIDE 33
% Of Failed Restaurants
59% Fail within
3 years
26% 19% 14%
SLIDE 34
Defuse The Bomb!
Food Sales $3,000,000 Food Costs 31% Payroll & Benefits 35% Controllable Income 10% Occupancy Expense EBITDA
10%
5%
5% 0%
SLIDE 35
What You Now Know:
What Is The 2% Time Bomb?
All of the small, seemingly insignificant, over-runs that cause waste!
How To Prevent It?
Manage to what works for successful restaurants! i.e. industry standards
The Importance Of Maintaining Proper Systems And Procedures To Help You!
SLIDE 36
Questions & Answers
SLIDE 37
SLIDE 38
The 2% Time Bomb
Why Most Restaurants Fail