The top 10 forecasting secrets - Part 2
Forecasting is incredibly important because we need a fresh and current plan to help us execute our financial strategy and as the saying goes, “Without a map any road will take you where you want to go.” I know for many hotels the idea of having a monthly forecast seems far-reaching and complicated, but I know it’s not. Once you start you will see what I mean and if you already complete this important planning piece you fully know what I mean.
Secret #6
Zero-base your expenses. Yes, that’s right, start with zero. Zero must be the starting point if your team has any hope of being able to manage their expenses. Why? you are probably asking. Without a definite list of what, how many and at what price, you will be left to the whims of the moment. Like a grocery shopper just before lunch, you will be unable to get out the door without a bunch of stuff you don’t really need. Read the full story.
Secret #7
Create a staffing guide. As you know the number one expense we all have is payroll, yet I am willing to bet you a round of drinks for the entire bar that you don’t have a staffing guide. What exactly is a staffing guide, you ask? It’s a two-part living document. The first part is a list of approved “fixed” positions. The second part is a formula by position for all variable positions in your operations. Rooms, F&B, and all minor operating departments and let’s even throw in maintenance for good measure. The full program can be found here.
Secret #8
Measure hours per room OCC and hours per customer cover served. If you’re not using productivity measurements, then you may as well be driving with your eyes closed. You can also fool yourself with labor cost and revenue per hour of work tests, but these are wholly inadequate to really tell you how effective you are being with the biggest cost you have. Read the formula for creating and using this powerful tool and learn to drive with your eyes wide open.
Secret #9
Use it as Distant Early Warning (DEW). 30-60-90 days. Back a few years ago during the cold war Canada and the US developed North American Aerospace Defense Command (NORAD). It is a combined organization of the United States and Canada that provides aerospace warning, air sovereignty and protection for Northern America. Their biggest tool was DEW. Your forecasts need to focus on exactly the same thing, giving you a warning as early as possible so you can plan and execute a defensive strategy. Focus your forecast on the next three months: 30, 60, and 90 days.
Secret #10
What’s the one thing we know for sure about the forecast? I love asking this question in my workshops. People have a misguided notion about the financials. They think there is an absolute answer when it comes to the numbers, the forecast is like a sacred cow. Like a high school math equation. It’s either right or wrong, that’s what people think. But here is the truth, the one thing we know for sure about the forecast is…its wrong. That’s right, it’s always wrong. So, the one critical mistake you can make is not doing one. Take your shot!
The monthly financial forecast is not just for the big guys. Get your game on and become a force to be reckoned
David Lund – The Hotel Financial Coach
Contact David at (415) 696-9593
|
|
|
|
