Profit Tip of the Week from Restaurantowner.com

This article was emailed to me today from one of the many email lists I am a part of.... Now, normally this stuff is trash, but I really like this article and I find it to be a good Profit Tip.

From RestaurantOwner.com.....

How Wrong Assumptions Hurt Your Restaurant

Most of your employees are clueless about what it costs to operate
your restaurant. In fact, most of them will "assume" you're making a
killing unless you've made an effort to enlighten them about basic
restaurant economics.

When I work with operators, I always bring this point to light by
asking three or four employees, individually, one at a time, how
well much money they think the restaurant is making. I take a
dollar bill out of my pocket and ask, "Out of every dollar in sales
that comes in this place, how much do you think the owner gets to
keep?" Typical answers range from 30 to 60 cents. The lowest I ever
recall hearing was 25 cents.

When employees think your restaurant is a high margin, extremely
lucrative business, it can affect their attitudes, behavior and
work habits. Employees that assume the boss is pocketing 50 cents
out of every dollar in sales (when in reality it's probably less
than a nickel), may find it easier to rationalize carelessness,
waste and even theft.

It's important to show your employee "where the money goes." Call a
meeting and give each employee 100 pennies. Explain to them it
represents a dollar of sales that comes into your restaurant and
you're going to show them where this money goes to pay all of your
costs and expenses.

Out of the 100 pennies each of them has, ask them give you back
their portion of expenses you pay each month. For example, you
might start out asking for 30 pennies from everyone for food, 32
pennies for payroll, 5 for payroll taxes, 4 for the utility bill, 6
for the rent and so on until there are four or five pennies or
whatever approximates your net income % remaining. Explain that
this is how much out of every dollar you get to keep.

At minimum, your employees will now know that your restaurant is
not the "cash cow" they had probably imagined and they might
understand better why you make such a big deal out of portion
control, counting products, scheduling and other cost control
activities.

Let your employees know, in terms they can relate to, that this is
a "low margin" business. Educate them and let them know what's
going on in your restaurant and they will usually do the right
thing.

The problem is that when you don't educate or withhold information,
people make assumptions and as you can expect, those assumptions
are usually wrong.