The Financial Mess Our Industry Hands to New Managers

Hospitality has a habit we don’t talk about enough.

We hire new managers, and then we hand them a financial mess.

Across cafés, restaurants and bars in New Zealand and Australia, how many new managers walk into clear documentation, industry-leading tools and a culture of financial discipline?

Not many. In my experience, most walk into a mess.

The handover that isn’t

I’ve watched this play out hundreds of times over thirty-odd years in this industry.

A new manager starts on Monday. They’re keen, with a good CV, great energy and strong references. They get a tour, meet the team and find out where the keys are.

Then someone says, “Oh, and you’ll need to do the ordering and write a new menu/winelist.”

Across much of hospitality, that’s the financial handover.

There’s no budget, no weekly P&L, no COGS target, and no wage percentage to be accountable to. Supplier invoices float to an in-tray, an inbox and the owner’s head. The ‘rough’ stocktake happens “when we get to it.” Half the POS reports go unread because nobody’s sure what they mean.

Three months later, margins have slipped and wages are up. The verdict comes down: “They weren’t the right person.”

Maybe. Or maybe a good person was handed a poor system.

Then the industry wonders why managers burn out, move on, or leave hospitality altogether.

Good people, bad systems

I’ve had hundreds of managers through my management programmes. Many of them want to master financial management.

That’s good news. Our managers want to do a great job as financial managers. The challenge is that most are given poor systems & strutures to manage.

When financial knowledge lives in one person’s head (the owners), no one else can succeed.

The manager can’t make good decisions without good information. The owner ends up back doing the roster, costing the recipes, doing the job they hired someone else to do.

This isn’t the answer for the owner or the manager.

What a good inheritance looks like

So what should every new hospitality manager walk into? Here’s the minimum standard I’d like to see across the industry.

A clear budget. It should set sales targets, COGS %, wage % and Net Operating Profit, broken down by month. That’s a plan, not a guess.

A weekly financial rhythm. The same reports get reviewed on the same day, every week. The numbers are current, not three months old.

Documented processes. Ordering, stocktakes and rostering against forecast sales are all written down, so the knowledge doesn’t walk out the door with the last manager.

The right tools. The POS, accounting, rostering and inventory systems talk to each other, and managers are trained to use and master them.

A culture of discipline. This is the big one. Numbers are discussed openly. Managers know their targets and own them. Nobody’s afraid of the weekly reports or the P&L.

Work smarter, not harder

This industry has a long tradition of working harder. That hasn’t fixed most businesses’ thin margins, and it hasn’t fixed turnover.

The operators who get this right work smarter. They build the financial system once and let it do the heavy lifting. Their managers settle in faster, stay longer and make better decisions.

What gets documented gets handed over. What lives in someone’s head leaves with them.

The question for our industry

Here’s the question every owner should ask before the next manager is hired:

Are we hiring someone to fix the financial mess? Or are we hiring them to run and manage a world-class financial system we’ve already built, one that delivers in the areas of planning, managing and reporting?

Those are two very different jobs. The first sets managers up to fail. The second sets them up to lead.

Right now, too much of hospitality is offering the first job. That’s not a people challenge. It’s a systems challenge. And systems can be built.

That’s the work we do in BLUEPRINT and in our Managers programme. When an industry’s financial systems are solid, its managers can do what they were hired to do.

Lead.