Episode Transcript
[00:00:00] Speaker A: Hey there. Chip Close here, host of the Restaurant Strategy Podcast. We are right now in the beginning of the new year. 2026 can be exceptional if you set it up to be this week. Right now, I believe can be one of the most powerful periods of your entire year. Why? Because most of us are slow. Businesses slow down. And so instead of just sleeping and God, I hope you have time to sleep, I also want you to take this time to plan for the year ahead. Now, there's a right way and a wrong way to do your planning and I want to talk to you about how do it right. All of that on today's episode of Restaurant Strategy.
There's an old saying that goes something like this. You'll only find three kinds of people in the world. Those who see, those who will never see, and those who can see when shown. This is Restaurant Strategy, a podcast with answers for anyone who's looking.
[00:01:07] Speaker A: Hey everyone, thanks for tuning in. My name is Chip Close. This is the Restaurant Strategy Podcast, two episodes every single week where we help you level up and increase the profitability of your business. Profit is oxygen. It is the air that a business breathes. So it's not about greed. It's not about buying more stuffed Bugattis and yachts. It's not. If you want to give everything away to charity, if you want to spread the wealth and share all your profits with your staff, that's fine. But a business needs to be sustainable. It needs to keep growing. The way it does that is to be profitable, Meaning it brings in more than it sends out. That's what this show is about. That's what my entire company, Restaurant Strategy, is about. So I give talks. I wrote a book, I have a membership site, I've got the, the group coaching program, the P3 mastermind, all different ways that I work with people out there. You can find all of those links in the show notes. The one thing I wanted to ask for you right here at the beginning of the year is that if you get any sort of value from, from this show, please take two minutes and go. Leave us a five star rating and review on Apple Podcasts. That is the thing that helps us spread. That's the thing that helps us grow our community. Take a minute, go do that and then come right back so we can talk all about planning for your year.
[00:02:18] Speaker A: If you've been listening to this show for any length of time, you have heard me talk about Kickfin because they've been a trusted partner of mine for years and I genuinely believe in what they do for restaurant operators, managing tips has always been a headache. There's never enough cash in the drawer. At the end of the night, managers are stuck making bank runs and doing spreadsheet math at 1:00am Tip pooling regulations keep getting more complex. It's just not fun. That's exactly why Kickfin exists. With Kickfin, restaurants can calculate tip pools automatically and send instant payouts directly to employees existing bank accounts. No cash, no predatory pay cards, no glitchy employee apps required. Your team gets their tips free fast in the account they choose, right when their shift ends. Kickfin integrates with all the major PoS players, so toast Square, Skytab, Genius Union, and many more. So you get fully automated end to end tip management. It's fast, it's accurate, and it gives you a clean digital record for accounting and compliance. Kickfin powers tip payouts for every type of concept, from mom and pop shops to regional hospitality groups to national brands like Walk On Sports Bistro, Marco's Pizza and Toasted Yolk Cafe.
Great hospitality starts behind the scenes. When your people feel valued, paid fairly and paid fast. I promise, everything improves. Kickfin makes that possible. If you're ready to save hours every week, eliminate cash runs, streamline accounting, and make tip payouts the best part of everyone's day, go to kickfin.com to learn more. As always, you'll find that link in the show notes.
[00:03:58] Speaker A: Okay, so today we're talking about how you do annual planning. And I think there's stuff we can do on the operations side and I think there's stuff we can do on the marketing side. Now, P3 members, those of you that are listening, you know, we spend a lot of time talking about this. The tools that you guys all get help you do this naturally. It's just something I believe. I think we have to set up our year, we have to set up our month, we have to set up our week so that we know going into the period what do I need to do and what do I expect to happen at the end of that? It's not a surprise of whether we're profitable or not. It's this is what I need to do in order to be profitable. And I either accomplish that or I don't accomplish that. Right now, at the beginning of your year, I would split your focus in two ways. Number one, from an operations perspective. Operations meaning what do you need to do to generate the kind of revenue you know you need to make? And then what kind of profit should you be able to expect from that? I believe every independent restaurant out there should be at 20% or more because what we do is way too important and way too difficult to not make money doing it. Did you know last year the average independent restaurant in this country made just 4% profit? And that's down from the year before, which was 5%. So a million dollar restaurant generates about $40,000 to the bottom line. So the owners, right, and 72%, something like that. 72% of all small businesses in the United States are co owned, meaning there are two, three, four partners owning a business. So a million dollar restaurant business generates about $40,000 in profit and that's split two, three, four ways. It's not enough money to even make your car loan, pay for a mortgage, pay for groceries, or God help you if you got to pay for college. I believe restaurants deserve to be profitable. I believe restaurant owners deserve to have businesses that provide for them. I said this a lot, right? Restaurants. You know, the restaurant's really good at telling you what it needs from you, right? Cook called out, the restaurant needs you to come in. The pipe burst. The restaurant needs you to go fix it. The all of the things that go wrong. Basically the restaurant tells you what it needs from you. My question always is, are you just as good at telling the restaurant what it needs to do for you? For me, that is profitability. I'll be willing to do all this stuff for you restaurant as long as you can do this for me. Meaning provide me a consistent, predictable return, a set distribution every single month. That's what I believe. And again, 20% is what we target. Let's talk about how we go into the year and target that. I believe you should be setting a certain amount of growth, growth every single year. And I think there's a playbook for how you do that. So don't just say, oh, we want to be 10% over last year. Be realistic with the number. If that's 5%, if that's 7%, if that's 3%, if that's 12%, I don't know. But more important than the number is you have to set a plan in place. And this is where most annual planning falls short. This is what I want to happen. And then you have to look back and say, these are the things we did to make this number happen last year. And so these are the new things I'll need to do in order to accomplish, accomplish this new number. And if you are not making it actionable, you're missing out on the whole thing. You're just hoping more people come in or you're guessing? I guess since we'll raise our prices, we'll make more. No, it needs to be more deliberate than that. From an operational perspective, you need to know what do you need to do to increase the ppa, the per person average. How do you get more value from each person who comes in? Now, maybe that's just raising menu prices, but maybe it's about incremental sales on the check. Maybe it's about upselling, maybe it's about server training. There are things you do to make that thing happen. Also, I think it's really important to look at your revenue streams. Look at the revenue streams last year and think of day parts as products and think of everything, all the different ways you make money. So breakfast is a product, lunch is a product, dinner is a product. I consider them different products because people can buy more than one in a given day. Somebody can come in for lunch, go back to work and then come back in for dinner. It's possible. Is it likely? No. Does it happen that often? No, but it does happen. So breakfast, lunch and dinner, all different day parts. They are three different products.
Off site catering is a different product. Right. Private dining is a different product. Retail merchandise, different product. So what are all the products you sell? And understanding the pie chart of how you made your money last year, right. 50% of our revenue came from dinner, 30% came from lunch, 6% came from breakfast. Whatever it is, I want you to understand that pie chart of where your percentages came from at the beginning of the year. I think it's really important to look back and look at where your numbers were last year and that will help you set growth plans for this year.
Understanding how much money you need to make every single month, that will help you set your daily revenue targets every single day to hit what you need to hit every single month. Understanding the growth that you need to be baked in there, understanding the different revenue streams and where the most growth is possible for most of you out there, I'm guessing it's in off site catering and private dining because you get to make money in bunches and most of you have your private dining rooms empty most nights of the week. So I'll just say right out loud, without even looking at any of your businesses, that's what I find often is the biggest opportunity out there. But you're going to look at your books and you're going to decide, right? So understanding what you need to do every single month that will help you generate your revenue targets every single day. My P3 members you know that P3 scorecard, you know, we talk about that. Something you use. Anybody listening to this? You don't know what I mean. That's where you set up a conversation. That's what we teach you in the P3 mastermind. But you need a way to do it right. You need a way to understand your revenue streams so you can make a plan for how you grow them. That's all on the operation side. And then we got to jump over, across the bridge to the marketing side. Marketing is the other side of growth. And as I'm planning my year, the first thing I would recommend you do is you look and identify your 3, 4, or 5 low points. Because there's a seasonality to everybody's business. And the first thing I want to do is I want to curb the downturns. Anytime business drops, drops off. So let's say in New York City, most restaurants drop down in July, August, and then they drop down again in January. Right? That's pretty typical. There are other little lulls that we. That we deal with, but those are the big ones. So what could you do? What sort of promotion? What kind of special event? What do you, you know, what would you do? What could you do to bring that down to. Right. So it doesn't drop as much. Meaning, let's say I do about $125,000 every single month. And then in July, I do 85,000. August, I do 75,000.
Even if I just brought July and August up to 100 or 105,000, I'm still dipping from where I am most of the year, but I'm not dipping so far below that will help you hold on to some of those profits. Now, I don't even want you thinking about what you can do or what you should be doing. I just want you to circle those on a calendar and say, I don't know what we're going to do, but we have to do something here.
Then what you do, the next piece is building out your marketing calendar. There are holidays, there are events. There's, you know, restaurant week. There's all this stuff that's going to plop on there. So you're going to fill out that marketing calendar, and then you look at your slow periods, and I think you'll find that they coincide with periods that there's not a lot going on. Guess what? July and August, there's not really a lot of holidays. And unless you're in a vacation town. Right. New York City is not a vacation town. It's not like People are going to New York City for fourth of July. They're not. They're going to the beach, they're going to the lake. That makes sense.
So what would you do in July and August? There's not a lot going on. So what could we do? Sending the January.
There's not a lot going on that period. Right. It's just after Q4, a lot, a lot of people are tightening their belts, both literally and figuratively. So what would you do to get people out? What could you do? Now? That's. When you look at a marketing calendar, that's how you start doing it. You can just build this in Excel. It doesn't really matter.
Part of your annual planning is on operations. Then on the marketing side, it's looking at when you dip, when you. So you understand when you need to do something, then it's figuring out what you need to do.
As you look at the year ahead, I think it's really important to look back and say, okay, what. What part of our marketing really worked well? And then what wasn't really working? Or what do we. What. What are we not sure if it worked? That's how you set up a marketing plan for the year ahead. One of the biggest things you can do right now at the beginning of the year is what do I need to do? And make somebody accountable responsible for it.
Otherwise it's just going to be you. Or it's like, oh, I don't, I don't really know who's doing that. But if you got to run Google Ads, who's responsible for managing the Google Ads? If somebody's running meta ads, who's running the meta ads? Somebody is responsible for sending emails or updating the website or sending text messages. Who is doing those things? Who's working up collateral? Who's getting it to the printer? Who's like, who is doing it? The who here is really important. And then beginning of the year is a great time to sort of shuffle the deck. So you don't necessarily have to go with what you did last year.
You can set, you can assign new people, you can change agencies, you can, you know, outsource it to other individuals. But right now, the beginning of the year is the time to do it. Because for the next six weeks, we're pretty much quiet for most restaurants until they start getting into, into Valentine's Day and beyond.
[00:13:23] Speaker A: Take this time and don't be frenetic about it. Take your time, close your eyes, take a deep breath, and look back at the year and say, what went well? What do I want to replicate? What didn't go well? What do I want to make sure to fix in the year ahead? If you don't take the time to be deliberate about it now, it is never going to be fixed. And that's the biggest point I want to leave you with. If not now, then when? If not you, then who?
We have to be more deliberate with our restaurants. We have to be more deliberate with what we get out of our businesses. That's my biggest takeaway today. That's what I want you to carry through all through 2026. Listen, I know there's a lot of great podcasts for you to listen to. I appreciate you making this part of your week. Again. My name is Chip Close. I am your. I'm the founder of Restaurant Strategy and the founder of the P3 mastermind. I would love to work with you. If you need help doing any of this, that link is in the show notes. Of course. Go get the book. Sign up for the membership site or grab a time to talk about the coaching program. That's how we can make a difference. Appreciate you guys. I will see you next time.
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