I will be delivering a brand new seminar called “MegaTrends: 7 Ways Our Business Will Change in 2006” at the NRA Show on Sunday May 21st at NOON. Learn the latest trends and best practices in hiring, service, training, technology, food and leadership. Be there early, our seminars are always standing-room-only!!! 

Saving Pennies to Grow
Dollars Makes Sense 
By Jim Sullivan CEO Sullivision.com

In an industry whose average pre-tax profit is less than five cents, we’d all be wise to recall the insightful words of Sony founder Akito Morita who once remarked that “while making more money is important, it is critical to remember that losing less money is just as important, too.” Every year I present dozens of live seminars for operator and supplier conferences around the globe. One of the most popular topics is how to shave costs without sacrificing speed, quality, accuracy and service. Here’s the top ten most popular cost-control tips:

1. Reward and recognize “waste-watchers.” 
   Remember that all money is not created equal; $100 in sales is $100…less taxes and expenses. $100 in savings is $100. If a team member contributes an idea that saves you $100, why not reward them with a $20 “commission”? Make it a habit to recognize and compliment your crew members who stick to the proper specs, portions and recipes. If you see it, say it.
   
2. Invest in cone cups for team member drinks. 
   Every day foodservice managers witness a frustrating sight: dozens of abandoned half-filled glasses or cups of flat soda cluttering their kitchen and drive-through counters from their crew. Solution? Invest in a cone cup dispenser for your crew. They cost less than your regular cups, the crew drinks less soda, and they can’t leave the cup lying around where it’s both unsightly and can get you in trouble with the health department.
   
3. Train your team daily. Sloppy portioning, improper bagging, and incorrect order-taking is the result of sloppy (or non-existent) training. Don’t blame the crew if they don’t know what to do because you decided to save labor dollars on crew education. If you think training is expensive, try ignorance!
   
4. Cook less more often. The fact is, food flavor does not rise proportionate to the amount of time it’s kept in a steam table or stored overnight in the walk-in cooler. Fresh tastes better and results in less waste.
   
5. Beware the irony of saving money and losing customers. One Wendy’s franchisee I know claims that shaving just one second off their drive-through window time directly results in another $11,000 in higher gross sales over a year. Impressive numbers, to be certain. But there’s a rookie mistake that even the most savvy QSR operators can make time and time again. Area Managers demand lower labor costs and unit managers respond by under-staffing, even at peak periods. Result: swamped team and long wait times for the drive-through or walk-in customer. Or worse, we put such a premium on speed alone (since drive-through traffic is exceeding 70% of volume in some QSR operations) that we sacrifice order accuracy. This is a classic case of a dollar chasing a dime. While long waits and inaccurate orders angers drive-through customers to no end, it ironically speeds up your drive-through service in the long run…because your customers don’t come back!  Staff for peak periods, train your team to repeat orders back to customers, and do double-handed exchanges of food, beverage, payment and change.
   
6. Make sure the night crew cleans properly. 
   What’s worse that trying to open your restaurant in the morning but first you have to finish what the night crew didn’t do? This hidden cost drives up labor dollars, customer service and even staff turnover.
   
7. Maximize tenure, minimize turnover. 
   Industry research indicates that the cost of recruiting, interviewing, training and hiring a new manager exceeds $20,000. Wow. If you sell a burger for $5 that means you have to sell 4,000 more of them to recoup the cost of losing one good manager and having to find her replacement. How many more of your products do you to have to sell each year just to cover the cost of crew member churn in an industry whose annual hourly turnover averages 134%?
   
8. Scrap boxes. Some operators will designate a specific brightly colored waste bin for all food that had to be discarded (and not sold) because it was prepared improperly or sub-standard. This “scrap box” is an effective way to visually demonstrate the collective waste and cost of mistakes per shift.
   
9. Check-in all deliveries accurately. Giving a delivery the cursory once-over because it’s time-consuming or inconvenient is just plain stupid. Remember FIFO (first in first out) and LILO (last in last out). The best kitchen managers are sticklers for this process. You should be too.
   
10. Show Them The Money (Poster)!
    The industry average profit on the dollar is less than a nickel, but most of your hourly staff thinks that you’re making a fortune. We found a great way to combat this perception is to create a poster for the kitchen and server crew that shows 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 18” 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!

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