Managing traffic and sales: How to keep your overhead out of the red
By Giorgio TavernitiFeatures Business and Operations Finance annex giorgio's corner
The flow of traffic and sales is difficult to predict in any industry but especially tricky in the food industry. It’s possible to make general predictions by reviewing numbers from previous months and years, but it’s also true that you may experience lower sales than you’re used to for no apparent reason.
The economy and society’s disposable income fluctuates and this is potentially frustrating for independents because we really can’t know how busy we will be, how much staff we will need or if our product will go to waste. Despite all these factors, the bills still keep coming like clockwork and in this unstable economic time it is easy to wind up in the red.
Although we can’t predict our sales, we definitely should be proactive about how many payables are going out. Let’s explore how tactics like staff cross-training, preparing items in house, sourcing your own products and revising business hours may help keep your business in check.
It is important to always have staff present and ready to serve clients. However, what happens when you have more staff than you do patrons? The ever-changing cycle of busy and non-busy periods makes scheduling properly a difficult task. A great way to ensure your staff work to their fullest potential is to provide cross-training. Not only does cross-training allow your staff to try on different roles, but it can also decrease your payroll, especially on a slow day. Slow days happen and having extra staff there simply because they know how to perform only one role is a waste of their potential and your dollars. All staff, when possible, should be cross-trained to know other roles and be capable of performing those roles with confidence. This will allow them to learn new skills and ensure you are not overstaffed.
There are many suppliers, wholesalers and buyers that provide varying grades of product. You may have a regular supplier or a buyer who sources everything for you. A great tip that shouldn’t be ignored is to explore sourcing certain products yourself. This can be time-consuming; however, it also can be cost-efficient for small businesses by saving you unnecessary extra fees, lowering product wastage from overbuying and allowing you to analyze the different products available.
Every business needs to have inventory on hand and in ample supply. We can guesstimate how much we will need of each item but sometimes we underbuy or overbuy. An easy fix to this guessing game is to convert items you usually buy to house-made versions. A perfect example of this is desserts. I love dessert and I always wanted to have a great variety; however, over the years I’ve noticed a steady decline in the demand for desserts and seen much of my product go to waste. I condensed my dessert menu to the most popular items and also started to make my own in-house desserts. Yes, making your own in-house anything can be time consuming. However, doing it yourself also can reduce wastage and keep you in control. You can replenish as you need to without minimum orders, extra-large quantities and delivery schedules. This will eliminate waste and allow you to keep your costs balanced rather than in that red zone.
Every business owner should know the peak traffic times of any day, month or year. This knowledge allows you to be fully prepared with ingredients, product and staff. It’s important to frequently review and analyze your sales and traffic. A small business has the best advantage in this category as we can set and change our business hours according to our clients and traffic flow. I have always been closed Mondays (my only day of rest) and generally a day of little to no traffic. However, I also have noticed a steady decline in my lunch traffic on Tuesdays and Wednesdays. I recently reviewed my figures and decided it would be beneficial to my business and longevity to remain closed for lunch on those slow days. This allowed me to have extra time to incorporate the tactics I mentioned above and the freedom to offer the highly requested late-night delivery on the other days that were in higher demand.
Decisions made to alter anything in your business must be made after gathering as much information as possible. When executed correctly – and this includes advising your patrons of big changes via word of mouth or social media – they will ensure you stay out of the red zone for every economic wave.
Giorgio Taverniti owns Frank’s Pizza House in Toronto, which has been in his family since 1990. A graduate of George Brown College’s culinary management and Italian culinary programs, Giorgio helped found a popular pizza-making workshop at the college and ran it for three years.
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