From Knife Skills to Number Sense: How Real-Time Financial Data is Transforming Restaurants
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From Knife Skills to Number Sense: How Real-Time Financial Data is Transforming Restaurants
This week on CULINARY MECHANIC, host Simon Zatyrka delves into the future of restaurant financial management with Geordy Murphy , founder of Fobesoft and veteran of the San Francisco restaurant scene. Their conversation reveals a critical truth about modern restaurant operations: success requires more than just culinary excellence.
Murphy's journey from busboy to restaurant tech innovator offers unique insights into why even the most talented chefs sometimes struggle to keep their doors open. "The restaurant business is a rear-view mirror business," Murphy explains, describing how operators typically don't know if they've made money until weeks after the fact. This delay in financial awareness can compound problems, turning small issues into major crises.
The solution? Murphy and his team at Fobesoft have developed technology that delivers daily P&Ls, giving restaurant operators real-time insights into their financial health. This innovation represents a significant shift from traditional restaurant management practices, where financial data often arrives too late to make meaningful adjustments.
One of the most compelling discussions centers around the industry's obsession with inventory counting. While inventory management is important, both Zatyrka and Murphy agree that many restaurants spend too much time counting and not enough time understanding what the numbers mean. Instead, they advocate for a more balanced approach: focus on your top-selling items, implement proper portioning systems, and use technology to track daily costs.
The conversation takes an interesting turn when discussing the cost of inaction (COI) versus return on investment (ROI). As Zatyrka points out, many operators focus on ROI but fail to consider what staying stagnant is costing them – not just financially, but in terms of mental health and business sustainability.
Perhaps the most valuable insight comes from Murphy's experience helping restaurants increase their profitability by 20-40%. This isn't achieved through drastic measures but through systematic improvements across multiple areas: cost of goods, labor, controllables, and non-controllables. "If you're making 10 percent profit, we just increased it four points. You're making 14 percent profit. That's a 40 percent increase," Murphy explains.
The episode serves as a powerful reminder that modern restaurant success requires a marriage of culinary expertise and business acumen. As José Andrés reportedly stated, understanding financials is "without a doubt" the most important advice for new restaurateurs.
For those looking to improve their restaurant's financial health, Murphy and Zatyrka offer several actionable steps:
- Focus on systems over individual talent
- Implement daily financial tracking
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- Understand your numbers before making major changes
- Don't wait for month-end to make adjustments
The conversation concludes with a powerful message: while creative culinary expression is vital, it's the understanding and management of financials that gives you the freedom to be creative. As Murphy puts it, they help "restaurateurs get their shit together" – and in today's competitive market, that might be the most valuable service of all.
For more insights into restaurant operations and management, tune in to CULINARY MECHANIC wherever you get your podcasts, and follow Simon Zatyrka for the latest episodes and updates.
Thank you so much for reading,
Simon
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