Hot Tips & Takes: Revenue Forecasting & Financial Planning for Restaurants w/ Stephanie O’Rourk, CohnReznick

Meet Stephanie. 

Stephanie O’Rourk co-leads CohnReznick’s National Hospitality Emerging Concepts, and Operational and Financial Consulting Divisions. Everyone from small, family-run restaurants to nationwide franchises can benefit from her insights into budgeting and forecasting. We sat down with her to learn the ins and outs of revenue forecasting and get the details on CohnReznick’s Restaurant Planning & Forecasting app.

Why is revenue forecasting so important for restaurants? 

Revenue forecasting is the basis for the major line items in your overall forecasting cash flow — cost of goods, labor needs, and operating supplies. Therefore, whenever you start to model and do financial planning, revenue is an appropriate starting point.

Cashflow is the lifeblood of any business, enabling business continuity; the ability to invest in itself and future growth; as well as the ability to satisfy both short- and long-term debt obligations. It’s vital to understand how your business needs to perform in order to achieve your desired free cash flow and liquidity.

How does planning improve the resiliency of your restaurant and position you for growth?

To improve resiliency, you need real-time visibility into your business to make fiscally responsible and financially fluent decisions. It’s vital to the continuity of your business to understand where your cash flow is currently, and where it’ll be in the future. This can’t be done without measuring, forecasting, and monitoring the performance of your business on a consistent basis.

Another valuable tool is scenario forecasting, which allows operators to model how operational decisions affect their overall cash flow and financial performance. For example: You’re expecting a cost increase for a key ingredient utilized in numerous menu offerings from one of your main suppliers. If you utilize scenario forecasting, you can address menu prices based in a more thoughtful manner rather than just increasing prices by 5% across the board.

Planning provides an operator real-time forecasting and monitoring that will change as the business evolves. Monitoring your forecast and projections is what enables you to better monitor cash flow and, quite frankly, leads to operational success or failure.

What makes revenue forecasting difficult for restaurant owners?

It’s really a lack of understanding of their revenue and menu mix — the in-dining, to go, online orders, and food and beverage mix.

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“If you’re utilizing the prior year as a baseline without understanding what some of those outliers were, and not adding relevant information for this year, you’re not forecasting.”

Another issue is understanding fluctuations in menu pricing and projected average checks. If you are reviewing year-over-year — comparing February to February, and then notice a big increase in May, you cannot assume that the increase is a result of menu price changes. That’s not a good enough. You must understand what caused the increase. It could have been more covers, it could have been increases in pricing. Not digging into the details to understand what happened in prior years is what can potentially produce a faulty forecast.

What are some of the common forecasting mistakes that you see operators make?

For a mature operator, one of the mistakes we see often is having a very siloed approach in terms of forecasting — that is, not incorporating all team members that affect all of the lines on their cash flow, financial modeling, and projections. You need to incorporate each important team member’s knowledge of the business for an accurate picture.

A big one is relying too heavily on historical data and just applying percentages across the board, stating: “I think we’ll grow 5% this year.” As we just talked about, utilizing straight year-over-year increases from the prior year without accounting for outliers doesn’t work. I see that a lot due to lack of understanding of menu mix and theoretical costs. Without menu analysis done on a regular basis, you don’t really have a true understanding of your costs for your various menu items.

Another mistake includes no consideration given for inflation as it pertains to expenses outside of the core prime costs. Everything in this world goes up in price. You’re seeing your G&A expenses, consulting expenses, office expenses, and paper supplies go up.

And then, there’s focusing on only P&L (profit and loss) items, but not incorporating balance sheet items that need to be considered when forecasting cash flow. That includes debt service, tax and profit distributions, and other long-term liabilities such as customer deposits. These are the things that affect current and future cash flow.

New operators are a little different, right? One huge miss we see a lot is failing to build the founders into their own model. How are they going to pay themselves? Another issue is they have no true North Star— no definition related to what successful growth means to them.

Finally, failure to execute on lessons learned.

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“In the restaurant industry, we always concentrate on the bad when it comes to financial performance. Rarely do companies say, what did we do right? And how can we repeat that?”

That takes looking at your forecast and comparing it to your actuals. We must update the forecast as the business evolves, otherwise it becomes a useless piece of paper that we’re not able to utilize to make the decisions needed to be successful.

How do new restaurant concepts forecast when they have no historical data to rely on?

They must develop a menu. That’s number one.

Number two, they must cost that menu. Then they must understand their business model and revenue streams: Will it be in-dining or primarily delivery?

Next, determine the number of seats, projected table turns and covers, as well as the projected average check to generate the information you need to forecast for revenue and costs of goods sold.

You’ll need to develop a labor schedule, which is based upon your FOH and BOH needs, which ultimately is based on your covers. It’s not all about revenue; it’s covers and the minimum amount of labor required to successfully execute those covers. From a BOH perspective, whether you’re doing $100,000 in sales or $1 million in sales, sometimes you need the same number of cooks in the kitchen to successfully execute your concept.

Then, you base controllable expenses (expenses that are driven by revenue) on your revenue and business model. For example, if your model is to do a good deal of delivery, then your third-party delivery fees and paper supplies are going to be higher based ony our business model.

You also need to know the price per square foot of your restaurant space to determine your rent and occupancy costs as an industry standard percentage of revenue. These costs will only increase over time and are fixed in nature. An operator’s business model needs to support whether a space is an affordable long-term option for their future business needs.

For G&A, marketing, and the rest, you can use industry standards. These costs are typically fixed in nature and are not typically driven by revenue.

What are the implications of variables like a competitive labor market and high turnover?

Understanding the cost of turnover is critically important because it affects other aspects of your business. With turnover comes the loss of institutional knowledge, which in turn means a potential loss in revenues and increase in costs. A new employee isn’t as familiar with the menu, needs time to be trained, and might not be able to upsell as well. Those are the things you need to and build that into your financial model.

Any conversation about the cost of labor also includes retention and that takes rethinking how you pay and incentivize employees. Operators always think it’s too expensive to offer the benefits that everyone wants, but you don’t know that until you model it and see how it will affect your financial performance. The model will show you how employee retention could mitigate some of the risks associated with turnover.

Operators may find that they can afford most of those benefits that haven’t traditionally been provided by the restaurant industry. With the proper financial planning and analysis, an operator can see the potential increase in revenue that could come with providing such benefits

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Operators always think it’s too expensive to offer the benefits that everyone wants, but you don’t know that until you model it and see how it will affect your financial performance.

You might find that you can afford all those benefits that haven’t traditionally been given in the restaurant industry, but the people who are doing financial planning and analysis can see how they could potentially increase revenue.

What kinds of tools/resources are important for restaurants to have as they’re building a forecast?

You should have the technology in place to obtain the information needed to perform budgeting and forecasting. The data you need will come from your POS, inventory management system, reservation system, general ledger, labor management system or any other business intelligence tool within your organization.

Integration is key when you’re trying to connect all the dots and connect the varying platforms. For instance, CohnReznick has a restaurant planning and forecasting application that provides instantaneous visibility into your business performance. It uses real-time data from all in-house sources to create both traditional and scenario budgets and forecasts.

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“It’s important to understand what you’re going to do next year and what you should expect in cash flow, but what’s really more important is the real-time visibility that enables you and your team to make those quick, real time decisions.”


Information is power, and connecting platforms to provide real-time visibility into operational performance is key.

Back to my example from earlier: Suppliers told me that there is going to be a dramatic price increase on a key ingredient that runs across many menu offerings. So how do I pass that along? Do I pass the entire increase along to my customer? How is that going to affect my potential marketability? I might have to think about other revenue streams that might mitigate some of these additional costs that maybe I can’t pass along.

If you have the information at your fingertips and you can compare actual to theoretical, you’re going to be able to pivot in real-time. You’ll also able to identify operational trends, remediate risk, and forecast performance impacts.

Anything timely that restaurant operators should take into consideration in 2023 and 2024?

Again, lack of employee retention remains a challenge in the industry. It’s wise to rethink pay and incentives and understand how you will be able to pay for that. Many operators will be seeing significant increases in labor rates for some states in the next few years. Putting pen to paper, computing to quantify the financial impact on your business, and incorporating scenario planning into your future budgets and forecasts will put operators in a position to be ahead of the curve.

Commodities are also always a factor. For example, with egg prices — everyone talked about them and now they’re back down. There’s always something — like acts of nature — that cause a crop to underperform, resulting in demand outweighing supply and therefore higher prices arise.

We are still in a competitive market and understanding your market in your segment and geographic territory in relation to your menu pricing is key — because if you are above market, there has to be a value proposition that keeps customers coming through your doors.

Knowing your customer base and ensuring that you are catering to your bread and butter is everything. While there’s a lot of technology out there to help manage customer relations, it isn’t a substitute for real, face-to-face interactions and a human touch.

Stephanie leads the National Hospitality Emerging Concepts and Operational and Financial Consulting Divisions at CohnReznick. Learn more about her and CohnReznick here.

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In the restaurant industry, profit margins have always been tight — and these days, they’re only getting tighter

Running a restaurant is a labor intensive business. You need a strong back of house team to push out food, front of house workers to greet and care for guests, and managers to keep everyone in check. Naturally, labor is one of the most significant expenses for restaurant operators. In order to keep costs reasonable for customers, even a slight overage on labor can break your budget — but thankfully there are levers you can pull to reduce labor costs. 

If you want to secure your business’s financial future, you’re going to need to streamline scheduling practices and keep a close eye on labor costs… without frustrating employees who want more shifts. 

Don’t worry: you can turn to traditional wisdom, sales forecasting, and emerging restaurant technology to make sure that you stay on budget. 

Here are a few ways you can save on labor costs at your restaurant:

1. Rethink the schedule

Obviously, the most straight-forward way to cut labor costs is to reduce the number of people you schedule on a given night. 

We get it — you don’t want to see hour-long ticket times and poor guest experiences. But you might not need as many folks on the line or servers on the floor as you think — at least, not all the time.

Staffing and scheduling isn’t a perfect science, but there are some tactics operators should test if they’d like to “right size” every shift — including:

  • Analyze your daily schedule. Don’t make assumptions about your peak times and slow periods. Analyze sales trends and let the data be your guide.
  • Anticipate seasonal trends. If you’re in a college town, don’t wait until your servers are twiddling their thumbs in July to implement a new summer schedule.
  • Let your seasoned staff shine. Your veteran employees likely thrive on those super busy nights when they’re running on pure adrenaline (and earning way more in tips). Consider giving more experienced workers more responsibility — assuming they’re willing and able — and you might be able to get away with fewer people on a shift here and there.

>> Learn about scheduling software that helps you manage labor and engage with employees

2. Assess and address productivity 

Are you making the most of the team that you already have? There are a few ways you can identify your highest-producing employees and make the most of their success: 

  • Evaluate employee performance. Most employees want to be successful; observe your team and analyzes things like sales per labor hour, table turnover rate, and tip volume to get a sense of your strongest players and those who could use more training (and bonus: this can reduce turnover and boost team morale)
  • Provide incentives. Create a fun bonus system that rewards strong performance and high levels of productivity. You can use data from the previous data point to set goals. 
  • Cross-train employees. Training your staff to handle multiple roles – or hiring folks with vast service experience – offers flexibility for scheduling and can reduce your need for additional hires. 

3. Don’t pay employees to wait for their tips

No, we’re not saying to cut all of your servers early (no matter how much they ask).

But, you can send your servers on their way much quicker when they don’t have to wait around for managers to count out cash tips. Once they’ve finished their sidework, servers can clock out and see their digital tips sent directly to their bank account, instead of hanging around on the clock waiting for the shift manager to do their check outs. 

4. Prevent labor overages before they happen 

Most restaurants simply can’t afford to pay overtime for staff. But sometimes your full-time staff creep toward 40 hours of work without anyone noticing…and suddenly you’re paying 1.5x what you expected for a single worker. 

This, too, goes back to proper scheduling policies. Give yourself a bit of wiggle room for the employee who clocks in 10 minutes early or often takes a long time on sidework by never scheduling anyone for more than 38 hours each week. 

5. Pay close attention to clock-outs 

People make mistakes, and tired servers often leave their long double shift without clocking out for the night. Usually, they’ll realize their mistake and call the store to have someone clock them out (still adding extra time to their shift). 

But sometimes, the clock keeps running all night, and no one notices until it’s time to process payroll. Two weeks later, your admin team is spending way too much time correcting clock-outs so that you don’t end up paying for 8 extra hours of work. 

Try using technology that puts guardrails in place to prevent any clock-out mistakes before they happen. Kickfin doesn’t allow you to process and pay out tips until an employee is clocked out, so managers can make sure everyone is clocked out at the proper time. 

(We also have some other exciting new features that can make your life easier!) 

Not only can Kickfin help you reduce labor costs, but we’re ready to simplify your entire tip management process. Reach out to us to learn more about our instant tip calculations, integrations, and smarter tipping solutions.

Football is back! Whether you’re rooting for your alma mater or just hoping to see massive sales at your restaurant, it’s an exciting — but often stressful — time of year. 

If your restaurant has at least one TV, you’re going to have some customers asking you to switch it to ESPN. And if you’re running a sports bar … it’s officially crunch time. Expect your tables to be full (and harder to turn) and your staff to be running on pure adrenaline as the restaurant fills up with fans hoping for a bite to eat. 

You probably know the drill: hire more staff, add more servers to game day schedules, and manage your inventory with hungry fans in mind. But if you want to get the most out of football season, get game-ready for some of the busiest weekends of the year with our tips for a successful season. 

Consider a game day menu

When your restaurant is at full capacity with hungry football fans, you might want to consider a limited menu for the weekends in order to keep wait times down. Shorten the food menu down to shareable apps, best sellers, and items with the simplest prep so that your kitchen isn’t lined with tickets at halftime. 

At the bar, don’t limit your customers to certain cocktails — but consider the power of suggestion and list out some easy-to-batch cocktails that will keep your service bar out of the weeds. 

Make sure they can watch their game

Is there anything worse than a group of die-hard fans walking in to see their team play — only to realize you don’t have the right subscription service to stream it? Next thing you know, some guy has commandeered the remote to sign into his YouTubeTV account. 

Before that embarrassing situation arises, check your cable listings and subscription services to see if you’re missing any important channels. You’re probably going to need to upgrade in order to show games that aren’t carried in your market. Here are just a few channels you might need: 

  • ESPN+ 
  • Hulu + Live TV
  • Peacock  
  • NFL Sunday Ticket 
  • YouTubeTV or cable
  • Netflix (yep — Netflix will be streaming a few NFL games this year)

If viewing options are limited, or you don’t have enough screens to air multiple games at once, make sure you’ve got a strong wifi connection (free, of course) so that your guests can watch on their phones — or more importantly, talk smack to their fantasy league.

Offer game day deals 

Now that you’re logistically ready for the season, it’s time to draw in the customers. Make your restaurant the place for fans to gather by offering drink specials and deals on appetizers. 

Leverage social media to get the word out about your game day deals. Consider paying to boost a post or running a giveaway for people who share a post about your game day specials. 

Plan for Post-Game

You don’t want the restaurant to empty out as the clock runs down. Entice fans to stay and celebrate (or lick their wounds) once the game ends by extending deals. That could mean a discount for fans of the winning team or an extra-long happy hour. 

Pay out your employees — quickly. 

After a long game-day shift, your servers and managers are going to be more tired than usual. Let them head home early by using Kickfin to pay out tips instantly. We take care of all of the tip calculations and send tips directly to servers’ bank accounts in seconds, so your exhausted team members don’t have to wait to put their feet up and rest. 

Want to see our instant digital tip outs in action? Get a demo of Kickfin today.

You want to make more profit. Your servers want to make more tips. A crash course on upselling is a win-win for everyone. 

Your servers might not realize it, but their words have a lot of power. Knowing how to present a higher shelf vodka or a premium side could make a world of difference for their wallets. 

And beyond the increased checks, pro servers who are able to successfully upsell are also recommending your restaurant’s very best for guests. Those bigger ticket items are often your best dishes or most unique cocktails that will stand out in guests’ minds and make for an elevated dining experience. 

Here are a few ways your servers can gently suggest some pricier upgrades that will boost their average check size, making everyone a few extra dollars. 

1. Consider your memorable dining experiences 

Before you dive into our upselling go-tos, take a minute to reflect on your last really good experience at a restaurant and how your server’s language, attitude, and knowledge affected your experience. 

Did your server walk right up and ask if you want an appetizer? Or did they take the time to talk through specials, field questions about menu items, and give you the space you needed to make a decision? 

Was your server’s demeanor generally excited and upbeat? Or did they actually look a bit disappointed when you said you’d just be having water? 

These small, unspoken cues are what make or break a server’s night. Leading with confidence, positive energy, and genuine concern for your guests’ experience is what will build trust between server and customer, so they’ll be more open to suggested upgrades. 

2. Value authenticity

Upselling just for the sake of a higher tip is not a successful strategy. 

Remind your servers that while upselling can improve guest experience and your tip, it’s important to flex to the needs of your guests. Don’t continue to push higher priced items if guests are starting to look uncomfortable. 

They say the most successful salespeople believe in what they are selling — and the same goes for servers. Your servers should have tasted all of the higher priced menu options and be able to explain to guests why this upgrade brings their dining experience to the next level. 

3. Start with the drinks

Alcohol sales are restaurants’ bread and butter. So when a table orders the first round, servers should make it count. 

Scenario #1: A customer orders a simple spirit + mixer drink 

If a guest asks for a vodka soda, this is an opportunity to turn a $10 drink to $15 or even $20 — which will add up after a few rounds. 

Naturally, most servers would ask what vodka the guest prefers. Teach your servers to resist that urge! Instead, servers should offer them a selection of higher-shelf options. For example, a server could respond with, “Vodka soda? Sure, would you like that with Tito’s, Ketel One, Grey Goose…?” And keep listing options until one resonates with the guest. That gives the guest the impression that they have a seasoned, well-informed server, but this framing also leads the customer to choose from the higher-shelf suggestions, rather than just asking for the house vodka.

Scenario #2: Ordering a glass of wine

We’re not suggesting you hire a sommelier, but getting more familiar with common flavor profiles and notes in wine can be a game-changer for servers’ nightly tip income. 

Customers often ask for something similar to pinot grigio, cabernet sauvignon, or a pinot noir, and if their server can give a detailed description that makes a wine sound irresistible, they’re probably going to splurge for the higher-end wine. Bonus points for servers who can successfully suggest splitting a bottle (because once they taste it, they’ll want more than one glass!).

Consider hosting a weekly wine training to help your servers get more familiar with what your bar has to offer. Another pro-tip: Teach your servers about beer and wine pairings! When servers let guests know which entrees pair well with the drink they’ve ordered, guests may opt for a higher-priced entree to match their favorite beverage. 

Don’t skip over the apps 

Not everyone is going to order an app — but there are a few small changes servers can make to their dialogue with customers to convince those who wouldn’t normally spring for a first course. 

For one, servers shouldn’t just ask if they’d like anything to start. Instead, teach your servers to approach tables with a suggestion for a specific menu item. For example, they could say, “Would you like a charcuterie board to start? We just added a really delicious local cheddar to our rotation.” 

Offering patrons a specific menu item and talking up the details makes it a lot easier to add that extra course to their meal — increasing their check size and making it more likely that they’ll order a second beverage. 

Taking the order 

When it’s time to take the entree order, this is your servers’ time to shine. Just like the previous courses, they should know how to create opportunities to upsell guests by making entree upgrades too enticing to pass up. 

From fine dining to fast casual, many American restaurants offer a burger on their menu. Rather than simply asking, “Great, are fries ok with that?” task your servers with turning a simple cheeseburger into a deluxe meal with several upsells. 

First, make sure your staff knows your menu options well, so they can pass along those options to customers. Here are a few common upgrades that servers should be asking guests if they would like:

  • Pretzel or gluten-free bun 
  • Added cheese 
  • Premium toppings, like bacon, egg, avocado, etc. 
  • A premium patty, like bison or imitation beef

Rather than asking if fries are okay, instruct servers to say, “What side would you like? We have french fries, macaroni and cheese, caesar salad…” and continue with options until one piques the guest’s interest. If they succeed in getting at least one upgrade to a customer’s burger and a premium side, the check can increase by around $4 per person, depending on the pricing at your restaurant.

Higher-end restaurants should follow the same formula, subbing in an option for steak oscar rather than a bacon cheeseburger. The goal is for servers to provide options for guests who may not realize that their favorite accoutrement is on the menu — and will gladly pay for the upgrade. 

The grand finale 

“Did you save room for dessert?”

Servers often bring out this line while pre-bussing tables, usually expecting guests to say that they’re far too full to even think about dessert. If you want to convince more guests to stick around for a final course, ask your staff to remove that phrase from their vocabulary. 

Dessert is a rich treat for the senses that most of us crave at the end of the night, so servers shouldn’t treat it like an afterthought in front of customers. As they’re clearing away dishes, servers can tap into their senses by talking about your pastry chef’s perfect chocolate cake with buttery layers of icing, or the warm peach cobbler served with house-made vanilla ice cream on the side. 

Even if guests seem like they’re truly full, your team can still offer them a slice to-go, since they’ll surely be wishing for something sweet in about an hour anyway. 

Reap the rewards 

After putting on their best smiles, connecting with guests, and using these upselling tricks, your servers should ring in above-average size checks — and an above-average amount of tips. 

Once your servers see their huge tip out for the night, they’ll want access to those funds ASAP. At Kickfin, we provide instant digital tip payouts, so managers don’t have to waste time counting cash and servers can clock out of their shifts sooner. 

Check out a demo of Kickfin today. 

Kickfin ranked in the top 3% of Inc.’s 5000 fastest-growing companies — and we’re leading the charge for tip management software. 

Every year, Inc. identifies 5,000 U.S.-based companies that have seen the highest rate of growth over the past three years based on revenue — and this year, Kickfin was at the top of the top.

A few stats we’re pretty proud of:

🏆 Kickfin ranked 189th overall.
🏆 We’re the fastest-growing restaurant tech company on the list.
🏆 We’re in the 💥 top 3%💥  of all 5000 companies.
🏆 We ranked 24th in the Software category.

Since 2020 — in spite of a pandemic, supply chain disruptions, The Great Resignation, and record-setting inflation — we’ve grown by 2,066%.

Our Keys to Success 

We’ll cut right to the chase: We owe our success to our customers. (It’s not cliche if it’s true, right?)

The bottom is that we know the way you pay your staff matters, a lot. Thousands of restaurants are trusting us to handle that for them, and we don’t take that trust lightly.

And of course, we might be biased, but we think we’ve got the best team and partners in the biz. Thanks to everyone who has helped build, support and evangelize Kickfin. This has been a big year for our small but mighty company — and there’s a whole lot more to come. 

This kind of growth doesn’t happen overnight. We’ve been putting in the work to make Kickfin even better for the thousands of restaurants we serve. Here are just a few ways we’ve expanded to better serve Kickfin customers. 

Integrations 

We’re making it easier to access and use Kickfin by integrating with dozens of leading POS systems, including Toast and SkyTab. Using our integration, managers can pull tip data directly from their POS and Kickfin will handle even the most complex tip calculations in a matter of minutes. 

Thanks to our POS partnerships, we’re able to bring a further simplified version of Kickfin to new and existing customers so they can kick cash to the curb. As an early adopter of our Toast integration, Bar Louie has already saved around 15,000 hours in labor annually by cutting their tip calculation time from hours to minutes. 

>> See more customer success stories

Find out if your POS integrates with Kickin, and reach out to our support team to learn how you can activate the integration.

New Features 

Kickfin is no longer just an alternative to cash tip-outs — we’re a holistic solution to your entire tip management system. 

In case you missed it, 2024 has been a big year for our product. In addition to our new integrations, we’ve rolled out some exciting new tip management features, including:

  • Splitting large party tips 
  • Increased security 
  • Reallocating manager tips 
  • Preventing labor cost mistakes 

>> Learn more about Kickfin’s newest features 

Each of these new updates is inspired by requests from operators, managers and restaurant employees who use our product daily — and that’s something that will never change. As we continue to innovate our best-in-class tip management solution, we’ll always be listening to and learning from our customers so we can ensure every need is met and every expectation is exceeded.  

What’s next for Kickfin? 

We’re not stopping anytime soon. Expect to see more POS integrations, more user-friendly features, and more guidance from our amazing customer support team. 

Not a Kickfin user yet? Now’s the time to rise with us! Get a demo of our restaurant-revolutionizing product today. 

We’ll see you next year on the Inc. 5000!

See Kickfin in action!