Speaking to a nightclub owner recently who turns over $100,000+ per week in his busy city centre premises I learned that his weekly variance/stock loss is less than $200 at cost.
I know of other businesses taking in $6000 per week that have the same losses. So how does the nightclub owner do it? Its actually quite simple: He systemises his business and has implemented basic procedures to control stock from receipt to eventual sale:
1. Staff are assigned to a specific bar each shift and cannot work in other bars without management direction. This makes the staff members accountable for any stock losses/cash shortages.
2. Each bar (7 in total) is inventoried separately at the end of each night. This takes ten minutes per bar and identifies losses on the spot.
3. The owner has instructed vendors to separate stock deliveries according to the bar they are destined for within the club. This allows for seven individual inventories and isolation of potential problems swiftly.
4. Bottles transferred between bars are recorded on transfer dockets and used as part of the inventory.
5. Staff identified as working in bars with continuing losses are warned, warned again and then dismissed. (there are never more than three staff per bar)
So, the next time you look at your inventory results and wonder how to get them right or if there is indeed any light of the tunnel, remember that if an operation with that kind of turnover can get it right, so can you.
Its just a matter of systemising ALL aspects of your purchasing/sales function:
It can be the difference between a profit margin of 65% instead of 60%. Wouldn’t that be a nice Christmas present?