Pizza Today - February 2024 - 16

Building Blocks
Cash
Flow
Nick Bogacz
Founder & President
Caliente Pizza & Draft House
" What you are afraid of
is never as bad as what you
imagine. Th e fear you let build
up in your mind is worse than
the situation that actually
exists. " - Dr. Spencer Johnson,
Who Moved My
Cheese?
Cash Flow is the heartbeat
of your operation. Without
it, you die. If there is a more
fear-inducing truth in business,
I do not know of it. Th e
quote above from Dr. Spencer
Johnson, the author of " Who
Moved My Cheese? " , hits on
this very point. It is one of
the most insightful books I
have read on the mindset of
running a business. Th e whole
premise is not to just look at
your current situation, but to
get a feel for how the future
of your business is going to
unfold. Looking ahead in
your business is an oftenoverlooked
part of running it.
When you look a few months
down the road, and even a
year or several years down
the road, everything becomes
clearer. I am talking specifi -
cally about your cash fl ow.
Many diff erent factors can
aff ect cash fl ow, and there are
some basics that need to be
understood fi rst before delving
into advanced methods.
Conducting a monthly profi t
and loss report in a timely
manner is a must. Reading it
and comparing it to months
past is a good way to see
where there may be
opportunities to tighten your
operation. Th ere will always
be a lot of talk about what
your food cost should be and
what percentage your labor
cost should be; there could
be hours of discussion on
both subjects. For the sake
of argument, I will tell you
what ours is for Caliente.
Our cost of goods is
30 percent, and that includes
everything from paper
products to chemicals, and
everything in between. Our
labor goal is 25.25 percent,
and that includes all staff
that work in the store.
Nothing helps cash fl ow
more than sales. Th ere was
a point in the middle of
last year when the summer
woes were hitting us
hard, and cash on-hand was
a premium. It was during
that rough patch that I was
reminded that sales fi xes
everything. As a company,
we turned our focus towards
building sales, and we had a
brainstorming session with
our team. We did it with
two diff erent groups and
then compared ideas, and
picked the ones that came
up twice, and a few others
that seemed feasible. For the
remaining four months of
the year, we implemented
many of these sales building
techniques. From that point
on, the cash fl ow increased
and eased a lot of tensions
and pressures.
16 / PIZZATODAY.COM / FEBRUARY 2024
Having a forecast of big
expenses that will hit your
account throughout the year
can help ease the surprise
when taxes are due, or you
have some other major
expense coming up. Using
your profi t and loss statements
from the year before
to see what months are the
toughest gives you a sense
of what to expect going
forward. Having that
expanded vision of being
able to see months in
advance will make a surprisingly
big diff erence when
managing your cash fl ow,
and you'll be better equipped
to handle the peaks and valleys
of business. Another hot
button when talking about
cash fl ow is raising your
prices, and we will get into
that in the next installment
of Building Blocks.
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Pizza Today - February 2024

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