Improve the management of your hospitality business

“In cooking, as in everything else, nothing is lost and nothing is created, or rather, I affirm for the present case that in cooking not a particle of food should be lost. Everything can be used, and from the economic point of view, leftovers are one of the most important business in the culinary business”, wrote Ángel Muro in the publication “El Imparcial” in October 1891, which was also included in his book “El Practicón” published in 1894.

The proper management of resources has always been and is an essential aspect in the operation of a kitchen and in the management of a hospitality business. This obliges and requires us to reflect on the objectives and daily management of our company, although it is not always easy to define them, so we must ask ourselves: What should our objectives be, as entrepreneurs or hospitality business consultants, in the company?

From Consulting Slow&Low we believe that the objective must be to create a solid, serious and responsible company, with strong structures, with a great commitment to quality, with a defined culture and values and, above all, with a qualified and professional team. All these aspects require the definition of clear objectives and strict procedures that allow us to control, analyze and evolve in the internal management of the company, in order to maintain its continuity and improve its competitive capacity and results.

However, when the results are not as expected, for many managers and consultants of hospitality companies, one of the first decisions and actions is to reduce the quality of the raw material, or to reduce the workforce. Solutions that may seem right in the short term because they improve the economic results immediately, but wrong in the medium and long term because they reduce the competitive capacity of the company. So, what decisions should be taken when results are negative, and in times of positive results, how can we anticipate these negative situations?

The creation of control tools allows us to know the current economic performance of the company, a forecast of future results and the necessary information so that we can anticipate in decision making. For this, it is necessary to prepare budgets in all areas of the business. In a newly opened hospitality business, budgets are hypotheses for projecting future results, while in an operating business we have a history of results that help us in their preparation.

Budget control helps us to monitor and comply with the variables that make up the planned budget, allowing us to identify the results of our fixed and variable costs that require corrective actions and measures. The information obtained from budget control allows us to transfer it to the key performance indicators (KPIs) used in the interpretation of results, such as gross margin, net margin, profitability threshold, cash flow and other efficiency and productivity indicators that we have established, which will allow us to have a true picture of the objectives achieved, the profitability and financial health of the company, as well as the aspects that need to be improved and the areas in which we need to make decisions.

Therefore, prudence and reinvestment in times of positive results is essential. Likewise, control, follow-up and anticipation in forecasting and obtaining the established results are essential actions in the daily management of the company.