How To Take The Right Steps Toward Mastering Your Restaurant Financials

In this episode of the Restaurant Success Podcast, veteran restaurant advisor Matthew Mabel tackles the critical yet often overlooked topic of mastering restaurant financials for entrepreneurship success. Whether you're running a single-unit business or managing a multi-unit restaurant group, understanding your financial statements is essential to sustainable growth and profitability. Matthew explores how proper financial tracking impacts restaurant business performance, reveals four common challenges that even successful restaurant entrepreneurs face with their financials, and demonstrates how addressing these issues can add two percentage points to your bottom line. From improving P&L literacy among your management team to modernizing your accounting cycles and embracing financial transparency, this episode provides actionable strategies that help restaurant owners operate like true modern professional restaurant businesses. Learn how better financial management transforms your restaurant entrepreneurship journey, increases your business valuation, and creates the freedom and flexibility you've earned as a restaurant owner.

Key Topics Covered

• Setting up proper financial tracking systems to measure management development, guest experience, and cost management initiatives
• The importance of P&L literacy for restaurant managers and leadership teams
• Four common financial challenges in restaurant groups: format issues, lack of financial literacy, outdated monthly accounting cycles, and insufficient transparency
• Converting to 13-period accounting cycles (28 days each) for more accurate financial visibility
• Building an open-book company culture and sharing financial information with your team
• How fixing financial systems can add two points to your bottom line and significantly increase business valuation
• Creating a culture of trust that enables transparent financial management

Articles Mentioned

• For Breakthrough Restaurant Performance in 2023, Share Information Your People Crave, https://surrender.biz/for-breakthrough-restaurant-performance-in-2023-share-information-your-people-crave/
• How Creating a Culture of Trust Benefits Top Restaurateurs, https://surrender.biz/how-creating-a-culture-of-trust-benefits-top-restaurateurs/

Resources Mentioned

• Website: www.surrender.biz
• Free initial consultation available

Connect with Matthew Mabel

Matthew works with owners of successful, independent, multi-unit restaurants to improve:

• Profit growth
• Sales optimization
• Guest count increase
• Unit expansion
• Employee engagement
• Brand loyalty

How to Support the Show

• Subscribe to the Restaurant Success Podcast and Newsletter
• Rate and review the show
• Visit www.surrender.biz for additional resources

Transcript

Hello, and welcome to the Restaurant Success Podcast. I'm Matthew Mabel, veteran restaurant advisor, coach, consultant, and speaker devoted to multi-unit independent restaurant unit, profit and revenue growth, internal harmony and ownership freedom and flexibility.

This is your weekly entree of the advice, strategy and tactics that I currently provide to my best clients.

Today, we're going to tackle the subject of mastering your restaurant financials

This is something that might not be the most glamorous topic in the restaurant world, but it's absolutely critical to your success.

We'll explore whether your company is set up properly to track financial success, how to share information effectively with your team, and the four common challenges I see even in very successful restaurant groups. I'll show you how fixing these issues can add two points to your bottom line and help you operate like a true modern professional restaurant company.

Let me start by asking you some questions.

Have you set up your company properly to track financial success related to your management development efforts, value of the guest experience, and branding and cost management initiatives? Do you share accurate information freely, presented in a format and cycle common to the industry? 

Do the professionals you hire easily use that information, and does it help you know how you compare to the competition?

Here's another important question.

Can your people read, understand, juxtapose, and present their profit-and-loss statements?

And, do you ever see monthly numbers other than bills? Does this allow you to increase profit by the two points my clients enjoy when they get serious about this?

When I ask my clients, "May I see the P&L," or, "How many of your managers understand their P&L?" and they give me weak evidence, we immediately pivot to addressing these issues.

Correcting even one of those issues sets you on a path toward owning a group that operates like a true modern professional restaurant company.

To keep my clients' restaurants fresh, relevant, and growing, I spend a lot of time improving the value of their guests' experience, building the capability of management teams, and recognizing opportunity for brands from emergence to maturity. As a result, my clients increase revenue, profit, and net worth.

Now, here's something that might surprise you. Even in twenty twenty-five, in what has become a sophisticated industry, and even in restaurant groups with great success and millions of dollars of revenue, I still encounter four kinds of challenges in this area. Let me walk you through each one.

The first challenge is format.

When the profit-and-loss-statement's format doesn't support the kind of financial analysis necessary to understand how to maximize profit, we change the format to an industry-standard to illuminate wins, losses, and opportunities.

The second challenge is literacy. When not enough people can actually understand the wins and losses illustrated by financial statements, we institute education so the people in the restaurant responsible for revenue and cost know how to master them and produce profit as a result.

The third challenge is monthly accounting.

Looking at monthly-financials in twenty twenty-five is the accounting equivalent of watching your favorite movie on VHS, instead of streaming the 4k version. It's outmoded and blurry.

We convert accounting cycles to thirteen periods of twenty-eight days, which is ideal for independent restaurant groups.

And the fourth challenge is lack of transparency. Or, in the words of a general manager I talked to recently: "I've never seen a P-and-L."

Running an open book company, sharing information, turns out to be the best way to make business decisions. Some owners worry they can't trust their people, but that's true only if they hire the "wrong" people, or can't trust themselves.

That's an entirely different problem, and you can find a link in the show notes to an article I've written about creating a culture of trust.

I correct situations where most aspects of a business turn out to be sophisticated, while other key aspects remain severely lacking. So it no longer surprises me when I start with a client whose information looks nowhere near as good as their food, service, culture, reputation, or atmosphere. 

When will you correct yours?

Speaking of information sharing, I want to mention a couple of articles I've written that really connect to what we've been talking about today.

The first one is about how if you want Breakthrough Restaurant Performance, then you should Share the Information that Your People Crave.

In that piece, I talk about how too many management teams don't have the information or education they need to solve problems.

If your managers remain profit and loss illiterate, you've failed them. I outline five key information improvements that can add two points to your bottom line. That's typically a ten to twenty percent profit increase and a huge increase in terms of valuation.

The other article that's really relevant here is "How Creating a Culture of Trust Benefits Top Restaurateurs." This one connects directly to that fourth challenge I mentioned about transparency.

I share ten elements of an independent restaurant company's atmosphere of trust. Things like being able to depend on your people doing the right thing, having a free and open exchange of information and ideas in your company, and operating in a low-drama environment. When you have this kind of trust, your ability to grow your business becomes unlimited.

You can find links to both of these articles in the show notes.

Let me tell you about how we might work together. I work with owners of successful, independent, multi-unit restaurants to grow their profit, sales, guest count, and unit count. My unique approach bonds employees and guests to restaurant brands and allows owners to enjoy the freedom and flexibility they have earned.

To schedule a call with me to discuss how to achieve your biggest goals, follow the link in the show notes. The initial consultation is complimentary, and we can discuss which big moves might be right for your operation.

Thanks for listening. If you haven't already subscribed to the Restaurant Success Podcast and Newsletter podcast, please do so, and rate and review the show. Find more information in the show notes at Restaurant Success Podcast dot com.

Also find tons of information you can use in print, audio and video form at my website, www dot surrender dot biz. Thanks again and see you next time.