Have you ever watched Gordon Ramsey’s Kitchen Nightmares? It’s actually one of Michael’s favourite shows, and he sees many similarities between failed retirement plans and failed restaurants. On the other hand, successful restaurants have a lot in common with successful retirement plans.
If you haven’t seen the show, it’s about Gordon Ramsey, the famous chef, visiting restaurants who have contacted him for help. In each episode, he gives strategies to help the owners turn their failing restaurants around.
Of course, while Michael can see the similarities between restaurants and retirement plans, he would never speak to his clients the way Gordon Ramsey sometimes does… Michael has something of a softer approach!
Like many of the clients we see at Money Over 50, these restaurants are not necessarily failing – they’re just not quite as good as they could be. Ramsey helps the restaurants run to their full potential in the same way we help our clients make the most of their financial strategies.
Here are the most common mistakes shared by failing restaurants and retirement plans.
- No visualising of success. The owners of the restaurant don’t know what they want to achieve or who their target market is. A good plan for the restaurant could be something like: we are going to be the number 1 choice for families who wish to eat good Italian food in a relaxed atmosphere. Similarly, a person working towards retirement who doesn’t visualise their retirement goal or work out a specific dollar value for their super will most likely not have a good outcome. Of course, visualising your dream retirement isn’t hard. But working out specific strategies to get there can be tricky. That’s where we step in, helping you work out exactly what that dollar value is.
- No cleanliness. It’s amazing watching Gordon Ramsey letting himself into the restaurants early, without anyone knowing, and going through the pantry. His reactions are priceless – and there’s usually a lot of swearing. Food on the floor, dirty pantries – the lack of standards and cleanliness is a concern. To have success, you must have impeccable cleanliness. Excellent restaurants (and Formula 1 teams) clean to absolute perfection. You could eat dinner off their restaurant or garage floors (not that we recommend that!). This is also seen in failing retirement plans – over time, people end up with messy budgets; unable to keep track of expenses, subscriptions and so on. Like a dirty restaurant, they need a proper clean out.
- No Automation. A failing restaurant might have hand-written dockets that get lost, no POS software and no clear processes for serving customers. And as for failing retirees, we find that those without automation (such as money going directly from their paycheck into their super) tend to fail more often than those who have these automated options. As a bonus, being automated is a huge time saver.
- Chopping and changing. A restaurant that tries to serve Italian food one week, Indian the next, followed by Irish (or worse, all three at the same time) is not likely to get many loyal customers. Changing investment strategies is the same. Pick one, stick to it, and do it well.
- Not picking up the ‘free money’. If a restaurant has excellent customer service, clever strategies or great deals, they can gain huge rewards. For example if they can convince 20 customers to have an entree or an extra drink at $10 each, that’s $200 extra a day – which is $73,000 a year – or $1 million over 14 years. That’s not a bad figure for a bit of ‘extra’ income! We like to call this ‘free money’ – and we love helping our clients to get it. It could be making the most out of government benefits such as the spouse super contribution, or utilising the $25,000 limit of concessional contributions per person. It might not be a lot year to year – but when you look at the big picture, there are huge gains to be made.
If you’re keen to learn more, make an appointment with us – we love free money. And we don’t yell like Gordon.
Listen to the related podcast here!