Don’t be fooled by money in the till – money in the bank at the end
of the month is all that matters. There’s an old but valuable cliché
that is worth trotting out:
“Turnover is vanity – profit is sanity.”
10 .Wake up and smell the profit
Hugo – true story
I was sitting with a customer recently who
operates a highly successful gastropub.
They do great food and sell a huge range of
speciality beers by draft. We decided to have our meeting off site
and visited a local coffee shop. During the course of our meeting
we had two cups of coffee each.At the end of the meeting he remarked to me “how do these
places make money? We’ve been sitting here for two hours and
they’ve only had a few quid from us.” His perspective was that in
the bar the volume of money going through the till was so much
higher. So I sat him back down and we analysed the facts.The facts were that at that time of day (mid-afternoon) his bar
was practically empty and the coffee shop was more than half
full. As we dug deeper we discovered that the gross profit
margin on our two coffees was exactly the same as it would be if
we had bought two pints each in his bar. He may have had more
money in his till but the cost of the beer was much higher.
Slowly it dawned on him.