The boss says:
“Your budget is $25 a month for LSM (local store marketing). Build restaurant sales and stay within the budget.”
The vendors and banks are shouting (using the mail) for the bills to be paid which leaves the restaurant owner asking:
“How can I do restaurant marketing or invest in software and services such as Inside Hospitality offers with no money?”
Since this is a journey I have already experienced many times over the years, we will do a quick review of how to find money for software, services and marketing which will support the goals in the New Year.
The goal is to save a minimum of $500 per month, take it to the boss and make a proposal to use a large portion of the funds for very special restaurant marketing campaigns.
The profit & loss report offers tabulation and shows patterns of expenses. For those who live inside a P&L, the real power is not just knowing the what, but also the who and the when.
Walk around, wander. Do it physically, not by camera or widget. Consider what is the real truth to the reports you here?
Management consultants Tom Peters and Robert H. Waterman used the term "Manage by Wandering Around" in their 1982 book In Search of Excellence: lessons from America's best-run companies.
Walking around allows you to see waste and assets which may not be obvious on the P&L. Long term expense patterns do not always show waste when comparing reports. This leaves the analyst wanting as the problem is obvious but the solution has yet to be found.
This can be dreary to some. It is about keeping money in the bank. If it becomes too mundane, use the buddy system and make a game of it.
Exterior - Landscaping frequency (especially during the winter) - Analyze what is ESSENTIAL vs. what is luxury. There is no such thing as “standard”.
Garbage frequency – There is a potential savings of hundreds of dollars a month with the right combination of size of container vs. frequency of pick up. In every case, the disposal company saved the day and made the best recommendations.
Shared utilities – There have been scenarios where the business next door had tapped into the water or electric (as a favor years before) but over time this was “forgotten”. Watch the meter.
The storage unit - eBay or craigslist is the game and the storage unit can be reduced in size or eliminated. There are smallwares, supplies and equipment along with paper goods in every storage unit which are being stored as “back-up”. In the poor storage environment, the supplies or equipment condition decays and when these items are needed, they are no longer useful. Sell these and get the cash.
The attic - The same is true for the attic but more so. The attic becomes the “mistake storage room” for when a manager over orders and quickly hides the error. The attic seems to get smaller as the inventory grows. Sell the excess or make a deal with the vendor to get credit.
Uniforms – If you have a high turnover rate in your restaurant, the profit & loss report will scream in pain every month. What the report does not tell you is the core issue of high employee turn. The human resources reports and management metrics will show the turnover rates. During a time of high turnover, managers may begin to anticipate bad hiring and poor retention and order uniforms to “stock-up”, regardless of the real need.
“Can I borrow a hat?” or “Can you loan me an apron?” are common requests and the solution for marginal managers is to stock up. Stop, set up a system to control this and understand how it impacts the bottom line.
Dish machines - Sounds crazy, doesn’t it? The dish machines are often times set to use much more chemicals than needed. Or a not so smart know-it-all employee decides to make their own adjustments, which triples the usage. At the end of the month the waste can impact the bottom line.
Dish machines – Again, the vendor makes a decision based on THEIR best interest by pre-selling chemicals, soaps, etc. which makes your restaurant a storage facility. Sure enough you don’t run out but working with a company which only ships once every 4 to 6 weeks requires extra cash out of your check book. This solution will first require a conversation with the vendor. If you could have $500 in your bank account instead of $500 of inventory back up, how does that change your business?
The Team - The P&L becomes a foreign object and is best left in the filing cabinet when working with the team. Waste with food and supplies runs rampant in even the best operation. The P&L is a tool which will show where to focus but it is the team who drive the results.
If there are 20 staff members and each can eliminate 25 cents of waste each hour by taking care to ensure controls are in place, the cumulative result can add up to hundreds of dollars a month.
.25 X 6 X 6 X 2 X 30 = 25 cents savings per hour by 6 employees working a six hour shift with two shifts over the course of 30 days. Over $500 a month.
Those who are experts with reports and numbers are left pulling their hair but those who can teach, motivate and inspire others to find the best ways save the quarters over and over are priceless.
You will be surprised at the response to: “What are the ways everyone might be able to save 25 cents an hour during each of their shifts?”
This could go on for pages and pages. When walking around with a clipboard and questioning EVERYTHING you see, you will find issues in the garbage cans, the rotation, the process of accepting deliveries, when invoices are paid, the broken paper towel dispensers in the restrooms… and on … and on.
You already have money for restaurant marketing but are wasting it on inventory, poor execution by the team, etc.
You also have more than enough to add the latest and greatest technology for shoppers, social media monitoring with Guest Pulse.
Grab the clipboard. It is budget time for the next year. Every operation I walk into is missing opportunity in this area. "I can't afford to do marketing" is very far from the truth.
