How do you adjust your catering sales strategy and tactics based on budget variance feedback?

1 Step 1: Review your budget variance report

Reviewing your budget variance report, prepared by the accounting department or software monthly or quarterly, is the first step. This report will provide you with the actual revenue and expenses for each catering event or category, as well as the budgeted or forecasted amounts. Additionally, you will be able to see the variance, which is the difference between the actual and the budgeted amounts in absolute or percentage terms, and its analysis. Carefully examining this report can help you identify any significant or recurring variances that suggest a problem or an opportunity in your catering sales.

2 Step 2: Identify the type and cause of the variance

The second step is to identify the type and cause of the variance, which will help you determine the appropriate action to take. There are two types of variances: favorable and unfavorable. A favorable variance means that your actual revenue or expenses are better than your budgeted ones, while an unfavorable variance means the opposite. For example, if you generated more revenue than expected from a catering event, that is a favorable revenue variance. If you spent more on food and labor than planned, that is an unfavorable expense variance.

The cause of the variance can be either controllable or uncontrollable. A controllable cause is something that you can influence or change, such as your pricing, marketing, or staffing decisions. An uncontrollable cause is something that you cannot control or predict, such as the weather, the economy, or the competition. For example, if you lost a catering contract to a lower-priced competitor, that is an uncontrollable cause of an unfavorable revenue variance. If you overestimated the number of guests and ordered too much food, that is a controllable cause of an unfavorable expense variance.

3 Step 3: Evaluate the impact and significance of the variance

Evaluating the impact and significance of variances is the third step, which will help prioritize actions and allocate resources. The impact of the variance is the effect on catering sales performance and profitability, while the significance is the degree to which it deviates from budgeted or expected results. To assess the impact and significance, you can use criteria such as the amount and percentage of the variance, the frequency and duration of the variance, the trend and direction of the variance, and the potential and opportunity of the variance. It is important to focus on variances that have a major impact and significance on catering sales, while ignoring or accepting those that are minor or insignificant.

4 Step 4: Adjust your catering sales strategy and tactics accordingly

The fourth and final step is to adjust your catering sales strategy and tactics based on the type, cause, impact, and significance of the variance. Your goal should be to maximize favorable variances and minimize unfavorable ones, while also maintaining or improving customer satisfaction and quality standards. This can include adjusting your pricing strategy to match market demand and competitive position, targeting profitable and loyal customers with your marketing strategy, optimizing labor costs and productivity with your staffing strategy, reducing food waste and increasing margins with your menu strategy, and enhancing customer experience with your service strategy. Additionally, you should communicate your adjustments to your team and stakeholders, as well as monitor the results of your actions on future budget variance reports.