How much do your employees really know about the state of your business?

I recently read a comment on one of those online restaurant review sites, posted by a customer who obviously had never run a restaurant. He had a couple of negative things to say about the place, but one which struck me was his complaint that one of the imported beers on offer was being sold for 30% more than at the grocery store down the street! He had half a mind to go and buy his beer there!

Over the years I have encountered a number of customers who keep a running tally in their heads…….chicken breast: $4.50 / lb, potatoes: 89 cents / lb, wine: $6 bottle, etc…..hey! why are these jerks charging me $16 for this meal??. What they fail to see is the cost of rent, utilities, labor, insurance, inventory, taxes, investors, L & I fees, FICA, FUTA, percentage rent, etc etc etc. People either get it or they don’t and it is counter-productive to argue.

However, even more disturbing is the employee who sees how busy the restaurant is and mentally pictures all those dollars going straight into the owner’s pocket. Geeeeez, I’m getting minimum wage, and I have to tip out the bartender and the host, and this guy is walking out the door with thousands! It’s not faaaaair. Oh dear oh dear. This is the perfect recipe for an alienated employee to start thinking that she just might even out the scales with a little extracurricular theft.

The fact is that very few employees, especially those just starting out in the working world, understand that out of every dollar generated from sales, anywhere from just a penny to a dime (for very very good operators) goes home with the owner as ‘profit’. And of those profit dollars, the prudent operator sets money aside for future improvements, expansion, or just a rainy day.

Just for grins, all you operators out there, break a dollar into small coins and ask a group of employees to move the coins into different catagories, i.e. food cost, labor, rent. (Or even more striking, break a $100 bill into smaller bits, with coins, and let them see how little profit is left.) Use this as a way to encourage them work on ways to eliminate waste, cut hours, turn tables, or whatever you think has the potential of increasing profitability. Once they have grasped the basics, why not let them see a snapshot of your actual P & L to make it real and transparent?. Believe me, there will be many suprised faces and I would bet that your staff will make a better effort to eliminate waste and concentrate on sales!

Dorothy

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