As a business coach, it always makes me incredibly happy when a chef increases their revenue. I have seen several chefs even double and almost triple their income within just the first six months of coaching. It’s exciting to see how surprised they are that they could even make that much! One reason why their income doubled besides their hard work and effort of course, is because I share my formula for planning out my profits. It’s a very simple equation, but powerful. When I have chefs do this exercise they are always amazed at how much more money they could be making.
I know that we all work with food because we love it but this is also not a hobby and we need to get paid for the work we do. I completely believe that if you write things down and truly believe that your goal will happen it will happen. That’s why planning out your profits is an extremely helpful tool!
Beside each of your revenue streams that you have listed, include the new ones for this year. Write down the goals you want to achieve with each one (such as a certain number of clients) and what you currently charge or will charge for it. Maybe your pricing is going up this year or you are creating a new revenue stream. After you have done that for each of your revenue streams, then multiple the price for it times the number you want to sell and total that. Do this for each revenue stream. After you have the total for each revenue stream then total each of those totals together which will equal your revenue for next year. I know math is not something most chefs like to do, but it’s pretty easy. I encourage you to stretch yourself. You want your revenue goals to be realistic but also challenging. Remember, think big and then triple it!
For those of you who are more visual learners like I am, here is an example of how you would use this formula:
Product Avg. Cost Goal Total (month x year)
Personal Chef Service $300.00 5 weekly $6K x 12 = $72 K/Year
Catering $500.00 3 month $15K x 12 = $18 K/Year
Cooking Classes $750.00 4 month $3K x 12 = $36 K/Year
Total Yearly Revenue = $126,000.00 a year
See how that works? It might be pretty basic but when you write it down, you are that much closer to achieving it.
I just finished up a business planning workshop that I hosted for about 20 chefs in my coaching programs and this process was very helpful in figuring out what products/services weren’t making them money and which ones were. I know that it’s always difficult giving up something that you like doing or have worked hard to build, but if it’s not making you money or there is not a demand for it in your area, it’s probably time to let it go.
Here are some indicators of when it might be time to “let it go” as Elsa in Frozen would say!
- It is beneath your growing fee structure
- Work is not challenging
- You are in area that is no longer growing
- You don’t like it
- Very few people bought despite everyone saying they want it
- Takes too much time for the ROI
- Doesn’t fit your value structure – rude people
- Not within your strategic plan
- You don’t want to do it any longer
- It doesn’t mirror your personal beliefs or values
When I first started personal chef services I tried to offer it all – grocery store tours, pantry makeovers, meals, consulting, etc. I realized that I was offering too much and that I actually didn’t enjoy doing grocery store tours or pantry makeovers anymore. It began to feel like work and I enjoyed consulting and actually making the meals more than anything. Plus, I could be making more money with the meal service so it no longer made sense to keep the tour and makeover around. Before I knew it, my customized meal delivery service was booming because I had focused my efforts on what could bring me money and satisfaction.
What product or service do you need to let go of? Which ones do you need to spend more time on to make you more money?