As the chief executive and sole owner of Landry’s Inc., the restaurant corporation that includes Morton’s, Golden Nugget Hotel and Casinos, Rainforest Cafe and Bubba Gump Shrimp Co. Among other franchises, Tilman Fertitta has made a multibillion-dollar career buying failing businesses and turning them into thriving ones.
By now, he’s become an expert at evaluating a business’s financials to determine its potential. What shocks him is how few small-business owners can do the same. Many are unschooled in the fundamentals, mixing up labor cost with their lease cost, or inadvertently combining the two.
“They don’t know their numbers, so they don’t know how to analyze where they’re having issues and what’s causing them to be profitable or not profitable,” Fertitta says.
This doesn’t mean all entrepreneurs need to be numbers people: a successful business requires more than a solid grasp of the financials, after all. A nuanced understanding of operations or the ability to sell and market a product or service are equally vital skills. That said, if you’re trying to run a company but can’t keep track of costs and sales, make it a top priority to hire people who can. Without them, “you are not going to make it,” says Fertitta.
Check out the video above.