Saving Nickels to Turn Dimes Makes Sense
By Jim Sullivan Copyright 2006 Sullivision.com

 “The hospitality industry is the only business I can think of where there are more ways to lose money than make money.”  - Jim Buelt

Last month’s article on waste-watching generated over 200 e-mails from readers who asked for more, so this month let’s discuss a few more ideas on creative ways watch our “waste”:

• Teach everyone on your team Profitability 101. The first few pages in your training manuals, and the first topic covered live in Orientation or videos should be “Restaurant Economics 101”, even before “Guest Service”. Why would a server or cook understand the importance of suggestive selling or following recipes without first understanding  the basics of gross versus net in our business? They first need CONTEXT to make their behavior coincide with your training objectives. Show them how expenses relates to revenue, explain how higher costs makes it harder to invest money in people and training. What’s the point of teaching service skills, selling skills or cost control if there’s no perspective to the Big Picture?
  
• Teach employees how to manage their personal finances. If they’re frugal at home, they’ll be more frugal at work. Offer this seminar semi-annually and invite spouses, too.
  
• Post your monthly invoices for electricity, water, heat, gas, food, beverage, insurance, lease, on bulletin boards so employees can review the so-called “invisible” costs of doing business and compare it to their own expenses at home.
  
• Raffles. Every month post each employee’s name on a sheet of paper. Choose the raffle goals based on the behavior you want to reinforce for the next 30 days: attendance, promptness, sales, working safely, cost control. For instance, if it’s a cost control raffle in a restaurant: any time someone breaks a plate or glass, cross their names off the list. Whoever is left has their name entered into a raffle for a prize drawing.
  
• Keep knives and blades sharp. This minimizes the cost of cuts and accidents and gives you better yield.
  
• Follow your recipes. A driving force behind high food costs in the kitchen or behind the bar result from cooks or bartenders that choose to follow their own recipes or measure “by eye” instead of using the prescribed spoons, cups, scales or jiggers.
  
• Sell more of what you have. The fact is that a restaurant doesn’t make money buying, we make money selling. So focusing your customer-facing employees on skills related to menu merchandising and soft-selling may be your best cost-cutting strategy of all. Selling doesn’t cost, it pays.
  
• Show Them The Money (Poster)! The industry average profit on the dollar is less than a nickel, but your staff thinks that you’re making a fortune. A great way to combat this misconception is to show them how 95 cents of each customer dollar actually goes to cover expenses. It has made a big impression on our team and we’ve seen our monthly costs drop by nearly 2% since posting this visual reminder. If you’d like to get a copy of this dynamic full-color coated 11” x 17” poster for your kitchens, server stations and manager offices, just CLICK HERE. What you reinforce is what you get, what you don’t reinforce is what you lose!

In summary, remember: while making more money is important, it is just as important to lose less money, too.

BRAND NEW!!!
POSTER: Profit on the Dollar
Click Here to Learn More!

Jim Sullivan is a popular speaker at hospitality manager conferences worldwide. You can get an 11” x 18” poster called “Profit on the Dollar” as well as manager training DVDs and books by calling 920.830.3915 or order safely and securely online at www.sullivision.com/buy.cfm