Fresh Start for Building Profits
by Ron Yudd
As you and your team get ready to jump into the New Year and all the activities it will bring it's the perfect time to create and conduct your very own Points of Profit™ review.
Often times because of the nature of our industry we can get so caught up in the day-to-day operations and the daily problem solving that goes along with it that we don't take the time to step back and look at things objectively and analytically.
A Points of Profit™ review involves identifying all the key points along the path of your daily business cycle that can have a positive or negative impact on your profitability. It's a step-by-step process of rooting out problems, enhancing the things your team does well and identifying profit opportunities that may exist along the path.
The following are the five major areas that we use to frame our customized 200 Points of Profit Program™ that we conduct in restaurants, foodservice operations, private clubs and hotels worldwide. The goal in this brief article is to simply provide you with a working frame to develop your own Points of Profit™ review. You can then use this frame to periodically conduct your own check-up. Each time we perform this review for our clients we try to leave them with the key understanding that they should utilize this program to manage their operations in the future.
As you go through the following five major areas think about the team member or associate in your organization that you will assign responsibility and accountability. Another key is thinking of this as taking a physical walk through your operations. We like to recommend doing this with "childlike eyes", pretending that you are seeing it all for the very first time and you are filled with curiosities and questions. Walk the path or process from back door to guest table and then walk the path your guests follow from front door to guest table. Here are some of the points to "look" at with your "childlike" eyes as you walk your operation.
The Top Five Points of Profit ™
I. Yourself and Your Team
Always start with the most important asset in your business cycle---you and your people! People, much more than systems drive profits. The level of leadership within your organization is directly related to the level of profitability. Take a look at your own development as a leader and then what your plans are for your key people over the next year.
- Levels of Leadership in Each Profit Center-Plan for Developing Key Players
- Self Examination-Managing the Team vs. Coaching the Team
- Content of and How We Orient New Staff and/or Temporary Seasonal Staff
- Core Staff Development-Less Staff Coupled with Higher Skill Inventory
- Levels of Accountability Along the Path-Personal Responsibility
- Growing vs. Dying-Time to Nurture vs. Time to Prune
II. Back of the House
After your people review-begin to investigate your systems. The heart of the house is where the cycle really starts. The daily business cycle starts with your purchasing decisions and follows the path from receiving, to storage to issue and then into production and service of the products. Think about the steps a product may take along this path. Literally walk it through the process. Notice the stops it makes along the way. Who is accountable for the product at each step, is it secure, if it's a food item is it safe (time and temperature) at each stop ?
One way to build your points of profit list in this area is to make a list of the stops along the way the products make and then begin to create a checklist of how you want them to be handled at each stop.
Look at this daily cycle for each one of your profit centers. Each profit center, no matter how small it may be, goes through some form of this cycle each business day. Here's a quick reference to frame your review:
- Purchasing-bidding process, prices, quantities, frequency of delivery
- Receiving-procedures and tools
- Storage-breaking things down, how quickly from receiving time
- Issuing into production-who, how much and when
- Production and Finishing-timing, security and accountability
III. Front of the House
Yes-this is about service but not just "service" alone. This process takes a look at how we are interacting with the guest/client/member/customer from all perspectives. It looks at how we disseminate menu and member information, answer the phones, respond to requests, handle demanding guests (you know exactly what I mean) and interact on all levels of our organization. It studies how we greet our guests whether it's at the front desk or tableside, behind the serving line and on and on. Several key areas to zero in on as you build your list:
- Service Standards-coupled with clear expectations for performance
- Service vs. Hospitality-Mechanical vs. Personable
- Serving Each Other-levels of interdepartmental and personal service
IV. Day to Day Operations
This area of review involves looking at the things that you do everyday. It's a review of some of the policies and procedures that may have been in effect for a long time and are taken for granted, abused or not even followed any more. Here's just a few to think about:
- Employee meal policy
- Employee uniform and sign-in sign out policy
- Review of first half hour of every shift and the last half hour of every shift
- Cash handling policy and procedures
- Reconciliation of products consumed vs. Products sold-Center of the plate items at a minimum should be monitored each and every shift.
- Security of all products along the path-food and non-food.
V. Opportunity Hunting
This area a lot of times can be the most fun because it involves stopping for a moment and looking at the opportunities that may exist within the operation. It really is hunting for areas that are crying out for new products and services or looking at others that simply may need a little enhancing or additional attention. This involves the review of sales mixes, guest comments, focus groups, surveys and seeing how industry trends may be directly applied in your operating circumstances. As you prepare for your "opportunity hunting trip" here are several areas of focus:
- Sales Building Plan-all profit centers-check average enhancers.
- Menu, product and service trends-Taking full advantage.
- Meeting the needs, wants and desires of the current market.
- Brainstorming our new signature items for each profit center.
As you map out your plans for 2005 think of this simple frame as a potential road map for you to follow as you create your own profitability check-up! It is humbly offered to help stimulate your thinking about the profit opportunities that may exist for you and your team in the New Year! Make it a happy, productive and profitable one!
Ron Yudd ©2004
You can contact Ron and subscribe his free industry newsletter by visiting his website at www.ronyudd.com
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