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Synergy Stocktaking Aidan Mc Donnell
Synergy Stocktaking Aidan Mc Donnell
Synergy Stocktaking Aidan Mc Donnell
Synergy Stocktaking Aidan Mc Donnell
Synergy Stocktaking Aidan Mc Donnell
Synergy Stocktaking Aidan Mc Donnell
Synergy Stocktaking Aidan Mc Donnell
Synergy Stocktaking Aidan Mc Donnell
Synergy Stocktaking Aidan Mc Donnell
Synergy Stocktaking Aidan Mc Donnell
Synergy Stocktaking Aidan Mc Donnell
Synergy Stocktaking Aidan Mc Donnell
Synergy Stocktaking Aidan Mc Donnell
Synergy Stocktaking Aidan Mc Donnell
Synergy Stocktaking Aidan Mc Donnell
Synergy Stocktaking Aidan Mc Donnell
Synergy Stocktaking Aidan Mc Donnell
Synergy Stocktaking Aidan Mc Donnell
Synergy Stocktaking Aidan Mc Donnell
Synergy Stocktaking Aidan Mc Donnell
Synergy Stocktaking Aidan Mc Donnell
Synergy Stocktaking Aidan Mc Donnell
Synergy Stocktaking Aidan Mc Donnell
Synergy Stocktaking Aidan Mc Donnell
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Synergy Stocktaking Aidan Mc Donnell

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Synergy Stocktaking Aidan Mc Donnell Presentation at the Hospitality Expo 2012. Dublin RDS

Synergy Stocktaking Aidan Mc Donnell Presentation at the Hospitality Expo 2012. Dublin RDS

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  • About Synergy Established when Types of customers How many franchisees There can be an impression that the only way to increase gross profits is by growing sales. I intend, in this brief presentation to highlight a number of ways through which your business can generate a higher profit without relying solely upon growing sales. Based on our experience in advising businesses in the hospitality and restaurant sector I am going to suggest 5 proven ways to grow gross profitability in drink and one proven method for food.
  • In reverse order of importance
  • We have seen first hand that if you cut out staff drinks and reduce complementary drinks, even though it might be small, it adds up to a lot in a year. Methods for this are to Stop all together, Only have staff drinks on a Saturday night, replace staff drinks with Staff price drinks on the till. Implementing any of the options 1 – 3 will increase your gross profit
  • The most important thing about waste is to know exactly how much in retail your waste is, then know this as a percentage of your sales, then set a new target and work as a team to reduce the waste.
  • Line Cleaning is literally money down the drain for at least 4 in every 5 pubs that do not drain the lines and sell the beer before the lines are cleaned.
  • 1. Opportunity to increase your gross profit through change in sales mix 2. Customer perception of Value for money at your premises However if simple rules about Promotions are not followed we have seen where it has had a dramatic negative effect on the Gross Profit and the rules are: Only have 3 to 4 promotion drinks maximum covering 1 in Draught, 1 in Bottle beers, 1 Spirit (with a mineral) and 1 Cocktail or Shooter. Analyze the Gross profit on each promotion to know how it will impact on your gross profit. Eg if your GP% on draught is 60% and you are doing a promo on a bottle of miller for €3 bought for 80c will give a GP% of 67%. The idea that if Pint drinkers switch to the bottle beer special for perceived value then your overall gross profit goes up.
  • Analyze the GP on each promotion to know how it will impact on your overall GP
  • Even though retail price can make also make a dramatic effect on your gross profit, I feel it is one of the subject that the publican has their pulse on. I do have on view on whether to reduce prices or not and is not to reduce your prices but to do a few promotions and focus on the quality of the experience of the customer. On Cost prices, outside of draught I have seen cost prices come down significantly in the last couple of years. If you take draught out of the equation there are only less than 200 products in each pub, of which there are only about 30 very good sellers. Find out what your best sellers are, learn the cost prices off by heart and then start hunting for better prices.
  • If was tough to pick between cost prices and Shrinkage or Pilfering for the number one spot, but in the last 3 years we have seen stock losses or shrinkage double, not just by staff who during the good times got over committed financially or staff who’s hours have been reduced but also by outside people who have become more and more desperate for alcohol or goods. There is only one true way to identify shrinkage and that is through stocktaking. If you have no stocktaking then I compare this to driving a Sports-Car at speed blindfolded. A poor or antiquated stocktaker is not much better than no stocktaker only they are costing you money. Preferably you should be using a high quality stocktaker with professional equipment and software for the quality of the stocktaker dictates the quality of the information you get, the quality of the information combined with advice determines the quality of the actions you take, the quality of the actions you take determine how much you increased your profit by. So if you are not getting quality reports in the first place then your Gross Profit is going nowhere.
  • If was tough to pick between cost prices and Shrinkage or Pilfering for the number one spot, but in the last 3 years we have seen stock losses or shrinkage double, not just by staff who during the good times got over committed financially or staff who’s hours have been reduced but also by outside people who have become more and more desperate for alcohol or goods. There is only one true way to identify shrinkage and that is through stocktaking. If you have no stocktaking then I compare this to driving a Ferrari at speed blindfolded. A poor or antiquated stocktaker in my opinion is not much better than no stocktaker only they are costing you money. Preferably you should be using a high quality stocktaker with professional equipment and software for the quality of the stocktaker dictates the quality of the information you get, the quality of the information combined with advice determines the quality of the actions you take, the quality of the actions you take determine how much you increased your profit by. So if you are not getting quality reports in the first place then your Gross Profit is going nowhere.
  • Four of the greatest challenges for anyone who has or is serving food in their premises is to Current Actual GP are you getting? What percentage GP should you be getting? What is the maximum percentage GP you can possibly get? If you are not getting your desired percentage GP, why?
  • Here we show a real situation where the Gp% was ambling along at about 60%
  • Here we have the top 25 selling products in descending order by value. We can see exactly what our best sellers are and with the aid of a bit of menu analysis on these items we can very powerfully determine what our potential gross profit should be and more importantly how each menu item is impacting it.
  • We can see that the most common Joint of the Day is beef and it is coming in at €14.50 per Kg and each portion is 200grams giving a cost of €2.90. With the addition of a few vegetables and garnish then the gross profit of this dish is only 53.43%
  • We see that the which accounts for 66% of the sales. the top 25 best sellers should account for over 80% of the Sales. This can be caused by too big of a menu or a lack of a signature dishes.
  • Thank you very much for your kind attention; you have been a fantastic audience. Now would anyone like to pose any questions you might have.
  • Transcript

    1. Create a higher Profit with less Sales Aidan McDonnell Director , Synergy Stocktaking www.synergystocktaking.ie
    2. 5 proven ways to grow gross profit in drink sales <ul><ul><li>Staff & Complimentary Drinks </li></ul></ul><ul><ul><li>- Add up to 0.5% Gross Profit (GP) </li></ul></ul><ul><ul><li>Waste and Line Cleaning </li></ul></ul><ul><ul><li>- Add up to 1% GP </li></ul></ul><ul><ul><li>3. Making promotions work for you/creating an effective sales mix </li></ul></ul><ul><ul><li>- Add up to 2% GP </li></ul></ul><ul><ul><li>4. Focus on Cost Prices (and Retail prices) </li></ul></ul><ul><ul><li>- Add up to 5% GP </li></ul></ul><ul><ul><li>5. Controlling Shrinkage and/or Pilferage </li></ul></ul><ul><ul><li>- Add up to 6% GP </li></ul></ul>
    3. 1. Controlling Staff & Complimentary Drinks <ul><li>Reduce staff drinks to 1 night per week </li></ul><ul><ul><ul><li> or </li></ul></ul></ul><ul><li>Introduce staff prices on drinks </li></ul><ul><ul><ul><li> or </li></ul></ul></ul><ul><li>Eliminate staff drinks altogether </li></ul><ul><li>4. Make sure that complimentary drinks only add value to your business </li></ul>
    4. 2. Controlling waste and Line Cleaning Turnover for 1 week = €10,000 40 pints x €4.00 = €160 Waste as a % of turnover = 1.6% Target for waste = 0.6% ______________________________________ Extra €2000 Profit Per Year or Extra 0.5% to your Gross profit Example 1: Waste General
    5. Example 2: Controlling for Waste from Line Cleaning 4 Pints/Line x €1.50 cost x 20 lines x 12 months = 4 out of every 5 pubs are not draining their lines before line cleaning € 1,440 pure profit
    6. 3. Increase profit through Sales Mix Opportunity to increase your gross profit through change in sales mix GP% on Draught is 60% Promotion - Bottle of Miller for €3 Cost of Bottle of Miller 80c GP% on Promotion Bottle 67% Higher consumption of ‘promotion’ drinks
    7. Suggestions for making Promotions work for your business Maximum of 3 - 4 Promotion Drinks Examples € 3 Bottle Beer 67% GP € 3 Shot of Sour Apple 70% GP € 5 Vodka & Coke 72% GP € 5 Mojito (Ready Mix) 70% GP
    8. 4. Focus on Cost Prices
    9. 5. Controlling Shrinkage and Pilferage <ul><li>Careless Waste & Leaks </li></ul><ul><li>Customer and Supplier Fraud </li></ul><ul><li>Employee/Staff Fraud </li></ul>
    10. Identifying Shrinkage and Pilferage <ul><li>Luck </li></ul><ul><li>Stocktaking </li></ul>Choices <ul><li>No Stocktaking </li></ul><ul><li>Sub-standard Stocktaking </li></ul><ul><li>Professional Stocktaking </li></ul>- Quality of the Information you receive - Determines the quality of the Actions you take - Which determines the quantity to the profits you make
    11. What could a 1% increase in GP be worth to your Bottom Line 0.00%   % Boost/Decline € 93,600 9.00% Net Profit % & € € 530,400 51.00% Net costs @ € 416,000 40.00% Cost of Sales @ € 624,000 ► 60% Gross Profit @ € 1,040,000 ► Annual Turnover Turnover & Net Profit
    12. What could a 10% increase in Sales be worth to your Bottom Line 10.00% ▲ 0.00%   % Boost/Decline € 102,960 9.00% € 93,600 9.00% Net Profit % & € € 583,440 51.00% € 530,400 51.00% Net costs @ € 457,600 40.00% € 416,000 40.00% Cost of Sales @ € 686,400 ► 60% € 624,000 ► 60% Gross Profit @ € 1,144,000 ▲ 10% € 1,040,000 ► Annual Turnover Increase in Net Profit with 10% increase in Sales Turnover & Net Profit
    13. A 1% increase in GP is worth an 10% increase in Sales 11.11% ▲▲ 10.00% ▲ 0.00%   % Boost/Decline € 104,000 10.00% € 102,960 9.00% € 93,600 9.00% Net Profit % & € € 530,400 51.00% € 583,440 51.00% € 530,400 51.00% Net costs @ € 405,600 39.00% € 457,600 40.00% € 416,000 40.00% Cost of Sales @ € 634,400 ▲ 61% € 686,400 ► 60% € 624,000 ► 60% Gross Profit @ € 1,040,000 ► € 1,144,000 ▲ 10% € 1,040,000 ► Annual Turnover Increase in Net Profit with just a 1% increase on the GP Increase in Net Profit with 10% increase in Sales Turnover & Net Profit
    14. The mystery of Profit in Food <ul><li>Actual Current GP%! </li></ul><ul><li>GP% you should be getting! </li></ul><ul><li>Maximum GP%! </li></ul><ul><li>Not getting your desired GP%, why? </li></ul>
    15. Know your current GP%
    16. Know what is Selling
    17. Dish Menu Analysis
    18. Menu Analysis
    19. Dish Menu Analysis
    20. Complete Menu Analysis
    21. The Complete Picture
    22. Results
    23. Create a higher Profit with less Sales Synergy Stocktaking Stand A4 www.synergystocktaking.ie
    24. Roast of the Day <ul><li>Limit Roast Beef to only 1 to 2 Days per week </li></ul><ul><li>Use Lamb, Turkey or Ham as cheaper alternative </li></ul><ul><li>Buy a cheaper cut or at a better price </li></ul><ul><li>Increase price if roast beef is on the menu </li></ul><ul><li>Put the highest profit menu items at the top of the menu with Roast Beef at the bottom. </li></ul><ul><li>Portion control (Smaller plates) </li></ul>

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