money

Navigating the 2018 minimum wage increase

December, 2017

Minimum wages are set to rise to $20 an hour by 2021 under the new coalition government. With the New Year upon us, the first of a series of incremental increases has already been announced. While this is great for employees, it will have a significant impact on hospitality and retail businesses across the country.

So, how will your business survive in this new environment? Here’s three tips that could help you mitigate the impact of this change.

Create a good employer brand

With the rise in labour costs, you’ll really want to attract the best possible talent.

Make your business somewhere people want to work by creating a culture that isn’t just incentivised by a pay check.

Celebrate excellence by providing rewards to well performing staff, such as naming them employee of the month; organise regular activities for your team to socialise and bond as a team; and offer all employees the opportunity for growth in their role.

Focus on efficiency

The old adage ‘time is money’ will ring even more true with increased labour costs. Focus on making sure you’ve got efficient systems in place so that your outgoings are as low as possible.

Implement a solid rostering system that allows you to know who is working and what they will be doing. Develop procedures that help you to stay in control of the business on a day to day basis, from knowing what stock has been ordered, to seeing your daily, weekly and monthly profit. Create open communication channels between your employees and human resources team, to make sure any issues get ironed out quickly.

Test and measure your systems and procedures, and repeat until you have it down to a fine art. The more efficient your team, the healthier your books will be.

Training

 Keep your employees at the top of their game with regular training. Not only do well-trained staff work more productively and create less errors, they also help to entice repeat customers.

Whether it’s a video tutorial, accredited hospitality paper, or upskilling by a more experienced member of the team, training of any kind is an investment in the future of your business.

The new minimum wage will come into play before you know it, so start getting prepared now.

4 Key Metrics For Successful Hospitality Businesses – Part 3

September, 2015

4 Key Metrics For Successful Hospitality Businesses Metric #3 – Estimates vs Actuals

You’ve got your plan in place.  You’ve checked the weather, looked at the odds of the local team smashing the visitors and even dropped into your local competitors and checked their latest offering.  In fact you’ve never been more convinced that an outstanding weekend of massive fiscal success lies ahead.

Yet come Monday the anticipation of triumph has waned.  The turnover figures bring you back to earth with a shuddering thump. What went wrong?  After all that planning effort why are we out of pocket by so much?

Estimating turnover is one of the most difficult things to master when running a Hospitality business.  In our last post we discussed some of the many things to consider when estimating your own numbers.  Experience has shown us that, even with the best possible laid plans, sometimes it just goes completely wrong.  Why?  Because many of the contributing factors are completely beyond your control.

The trick to mitigating these situations is simple; Good old fashion diligence.

As a hospitality operator you must measure and understand what caused the difference.  Knowing what went wrong and why will only serve you well for future planning.  Failure to measure and acknowledge why your plans went awry will only lay the groundwork for further future failures and financial difficulty.

Estimate. Execute. Measure. Repeat.

If you missed out on reading Metrics #1 and #2, pop on over to the business section of the blog now and take a read.

Is Revenue A True Predictor Of Success?

June, 2015

Is revenue a true predictor of success?

“Success.”

Typically defined as: ‘the accomplishment of an aim or purpose.’ (1)

Success means a lot of different things to different people. Success may mean wealth, or it may mean happiness. It may mean fame, and for others it may mean power. But can revenue be a true predictor of success?

In the business world there is not right or wrong way to define success. It’s merely subjective. It is based on both the personal and  the business goals that you have in place for yourself. These can vary tremendously from one person to the next. Many believe that there is in fact only one path to success, and they simply choose not to consider other patterns of thinking. In their mind, this way of thinking is what will help them to reach their end goal.

It’s all in your ability to adopt change when it comes to your current systems and process, that will help you as you carve out your route to business success. If you begin to place too much confidence in your ability to make good judgements and decisions and solely rely on old patterns of thinking, you’re giving no weight to the environmental factors surrounding you that are constantly changing.

As we all know, the costs that typically make up a business are:

  • Your fixed Costs
  • Your variable Costs
  • Your employee Costs

And then you have your little shining beacon. Your profit.

Ask yourself. Are you measuring the right things? Many have the perception that they know what makes up the correct monetary equation to predict their profit. We believe this is a naive way of thinking unless you’re consistently taking into account the effects of both your controllable and uncontrollable costs. Unless you are 150% sure your decisions are supporting your overall goal for profitability – there will never be complete accuracy in your figures. What you are measuring needs to show:

  • Continuity in accuracy
  • And, the numbers need to hold the correct weight.

It’s like being the coach of a sports team. You’re employed to pick players based on their skills and their ability to play within the team. There needs to be continuity in accuracy and you must weigh up the importance of the correct statistics. What abilities are most relevant based on the current game and competition. The environmental factors.

So there you have it. Revenue can be a predictor of your success. If you choose to measure it correctly. 

(1) www.oxforddictionairies.com /definition/english/success

Why You Should Care About Preparation

April, 2015

Why you should care about preparation

All of us have had to deal with the concept of ‘preparation’ from the moment we could walk. Whilst the responsibility we had back then was comparatively small relative to todays age, they were still things that in a young child’s mind were rather significant. Things such as making our beds, turning the lights off, hanging up our clothes, helping out with the dishes. These were all primary responsibilities when we were younger.

This turned into getting ready for school on time, attending all of our classes, getting our first jobs and then moving out of the family home. We continue to mindlessly prepare ourselves for these tasks every day – but to us they seem so insignificant compared to running a business, making a good wage, putting a roof over our heads and feeding our families.

Irrespective of the size of the task; the principle remains the same. Better preparation makes for better execution of the task. To ‘prepare’ is typically defined as ‘”make (someone) ready or able to do or deal with something.”

To ready yourself.

To make sure you’re able and ready to deal with something.

I think it’s pretty safe to say that many of us at some time in our lives have felt unprepared for something. However, there are a handful of people that perform really well when they are unprepared. These people work well under pressure. But for the majority of us, that just isn’t the case.

We need to be prepared for anything that may come our way so that whatever happens, our business and our resources are safe. If you prepare for the worst, whatever comes your way will be a walk in the park for you. Because let’s be honest , hiccups and hurdles along the way slow down our business. We lose our momentum, our money, and our intensity within the market.

Ensure you make plans for whatever situation may be thrown at you. Because that’s what makes for a successful business. One that can handle whatever may be thrown at them.

What your turnover reveals about your hospitality business

April, 2015

What does your turnover reveal about your hospitality business?The hospitality sector is one of the most competitive industries in the world. Some businesses have greater financial backing, greater resources and more effective marketing – however, this sets the stage for an arena of new and exciting trends for the customer.

How much money you make is irrelevant if you aren’t comparing it to the size, locality and purpose of your business. You transpose your turnover against the environmental factors and resources that make up your business. Then, it becomes apparent what your turnover is really reflecting.

Your location

How you maximise and use the proximity of your location with respect to other places and buildings around you helps to shed some light on whether you’re making full use of your location’s potential. There’s an opportunity if you’re close to or surrounded by businesses similar to yours, that all venues can feed off each other: when ones busy, the other can pick up the overflow and vice versa. Maybe you’re situated within a business precinct where the amount of foot traffic is high, meaning people pop into your establishment based on your proximity to their place of work. On the other hand, it may not be buildings that work in your favour – but parks, arenas or sports fields. Your physical environment can help you maximise your profits by generating foot traffic past your place of business.

The size of your business
What does your turnover revel about your hospitality business?

Whether your business is big or small, you need to be spending money relevant to the size of your resources, and subsequently adjusting your desired turnover figures to an attainable goal. Don’t be caught over spending on wages and your variable costs. Keep stock and inventory levels to an appropriate amount. Doing this will help to ensure that your turnover figures aren’t going to be spent on costs that have been miscalculated due to lack of preparation and discipline in keeping these relative to the size of your business.

Your employee management

This is where our area of expertise comes in. Employee costs are quite simple – and too often we see people getting them wrong. It’s quite simple. Get these right and you allow yourself the freedom of not cutting into your turnover each week. Any sensible business owner or director wants to reap as many rewards as possible. Why sabotage them?  Employee costs are the easiest and most manageable of all your business budgets. Keep these tight and never again cut into your hard earned profit…..ever.

 So, what does your turnover reveal about your hospitality business? 

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