It’s a good idea to use any quieter days in autumn to reflect on your pub’s operating performance. Investigating how your bottom line has been affected by losses is one of the best ways to approach this. Knowing how to right the wrongs you discover will be the key to moving forward into the festive season with a clean and profitable slate.
1. Cutting Your Losses
Most publicans have a deep awareness of the multitude of ways in which their business can lose money. It’s this that should drive them first and foremost to finding out exactly what they’re losing and where they’re losing it. Only then will they be able to get a firmer grip on preventing profit losses. Having frequent access to performance data holds the key to these learnings.
2. Tracking Your Progress
There are some KPIs in particular that publicans should be keeping track of.
- Shrinkage, the total revenue loss attributed to wastage, breakage and theft.
- Yield, a percentage statistic, which tells you how much potential revenue you have achieved from stock and conversely what has been lost.
- Sales Performance, ranks the performance of every menu item you sell and gross profit (GP%) – your revenue (exc. VAT) minus the cost of goods sold.
One way of receiving these regular business KPIs is to enlist the monthly services of a professional stocktaking company.
3. Controlling Your Variables
When analysing your stock control KPIs, understanding your food services’ profitability is just as important as your beverage performance. A good food offer has become a key part of most pub businesses, offering significant extra revenue opportunities. Even the smallest of pubs endeavour to provide some sort of dining experience and much like with beverages, tracking and controlling food stock can help you minimise unnecessary losses and help you achieve higher profits.
Food service has more variables making it difficult to control, and counting ingredients is, at its best, time consuming and at its worst, simply nonviable. Here are some measures you should have in place that help maintain control over your food stock and kitchen:
- Regular high value counts on all protein items and other expensive ingredients. This is a worthwhile time vs benefit arrangement.
- Surprise item counts to catch out staff who help themselves to a premium meal on your wallet.
- Understand your wastage levels per ingredient to encourage more accurate menu costings, thus ensuring you achieve your targeted GP%.
- Track dates and gain a deeper understanding of your sales, as this can help you rotate your stock, decreasing wastage.
To respond appropriately to fluctuating ingredient and supplier costs and help you set your prices at profitable levels, the analysis of food margins, benchmarking and menu costings are also key to keeping tighter control over the variables in your food offer.
4. Trusting the Evidence
Getting it right can truly do miracles for your pub. Recent stock control analysis for a pub company’s 40 sites proved that KPI data can help pub management drive impressive improvements in results. Over the course of two years an average increase of over 4% gross profit was achieved at each site. Investing in tracking and analysis of these KPIs is certainly worthwhile!
5. Raking Up the Mess
So, once you’ve managed to get an idea of the extent of your pub’s losses through KPI analysis, it’s time to pinpoint the areas in your business that need work. Certain problems can cause greater carnage than others. You’ve therefore got to make sure that you tackle the root causes of your losses in a timely and sequential manner.
Inside abuse in the form of staff theft for example can be incredibly damaging. If you suspect potential culprits in your business you need to act fast. Smaller but equally damaging problems can include things like write-offs, breakages or excessive stockholding, which may require a longer and more dedicated approach in the form of training and policy implementation.
6. Putting Things Right
Setting monthly targets and incentivising your staff to achieve them can be a great way to get through your to-do list! Pairing this with the KPI tracking mentioned before can help solidify these targets and help keep staff accountable and motivated to achieve them.
Our stocktaking, loss prevention and stock control services can help you implement a solution that’s right for your pub; giving you greater control over your F&B performance and helping you boost profitability. If you’d like to know how we can help you get more out of your stock control data then fill in the form on this page to request a call back.