Chris Maclean: Why GP is just gross
I am growing to despise the very idea of GP. This may be a heresy for many, but there is life beyond, and above GP - honestly.
I had a long meeting with my accountant yesterday. I freely admit I have no head for figures and rely heavily on my relationship with my book-keeper and my accountant.
The book-keeper takes a box of accumulated receipts and paperwork and creates a table of figures the accountant transforms into my annual returns. Much of it is meaningless to me. There will be some of you who recoil in horror at the concept. But my skills lie in different areas. You must accept, for example, that few accountants make good bar staff. My skills don't include figure-work.
The accounts for my outside bars show dramatic shortfalls. On sales of around £28,000 my gross profit appears to be a little over £4,000. My accountant is, understandably, suggesting this is lunacy. We cannot continue running this aspect of our business without serious review.
But on closer inspection these are, typically, accountancy procedure errors. Delayed bills from last year and delayed credits due to us have helped paint a bleak picture. Realistically last season was fine. But for a fleeting moment, despite seeing reassuring signs that each event took twice as much as the cost of the sales, it appeared like we were on the edge of an abyss.
Today I spent time in a managed house pub. I sat listening to the manager and staff discussing their breakfast for their hotel guests. The manager was detailing to the staff the potential savings if the pub bought "medium-sliced" rather than "thick-sliced" bread. Something in the region of £130 per month.
I might be doing a disservice to managed pubs here but it appears to me, on the outside, that many companies would be happier if a pub returned 60 per cent GP on sales of £10,000 rather than a 45 per cent GP on sales of £25,000. Thats madness.
I aim to deliver product/service that is as good as I can make it, in surroundings as nice as I can offer. In return I simply anticipate receiving an income sufficient to maintain the lifestyle I am content with. That, for me, is an ideal position. Many licensees would be glad for the opportunity. I am sure I am not alone.
Yet once again, for example, this month's BII magazine churns its repetitive spin on how their members have been outstandingly successful; "I changed electricity supplier and gained £347!", "I cut my lavatory rolls in half and saved 12.874%!"
It is, for some, obsessive. Get a life!
GP has its place. We need, to survive as businesses, profit. But I am not interested in GP if it necessitates factoring out fun, pride, integrity and vision. I don't want GP to over-ride these.
Running a pub, for many, is a lifestyle. It is how many people choose to live. It doesn't mean they will make a lot, or indeed any, money. I respect that. GP has a place. But please don't tell me it is about the thickness of the bread-slices.
