Insights - Published by Ron Santibanez   

June 1, 2012


In This Issue:

Cost Controls Must Be Preventative, Not Corrective

A Bit of Wisdom

Panic Hiring

 Tips and Things

 Cost Controls Must Be Preventative, Not Corrective

A key aspect of cost control is the prevention of the cost excess in the first place rather than having to take corrective action after the lost has been discovered. Another way of putting it is that the goal is to maximize profits, not to minimize loses. Think about it. Who would want to have as a goal the task of minimizing losses? Unfortunately, a number of restaurant operator turn to cost controls when losses are occurring and the damage has already been done.

Cost controls are not just for operators who need to reduce their costs. They're needed in those successful high-volume operations where volume can hide a multitude of sins. A significant opportunity exists to maximize profits when the business volume is there. A business may be lulled into that it's doing fine because a profit is being shown. However, that business will never know how much additional profit could have been made if excess costs were controlled.

You must put your cost control program onto effect the first day you open your doors...although it actually begins when you start incurring expenses for the planning and development of the concept. Converting to a cost control program when the business has been losing money often comes too late to turn things around. Remember; Cost controls in and of themselves are not a guaranteed formula for financial success.You must have the entire package in place to be successful today.

We have all read that businesses that pay attention to quality also seem to do other things right, and costs generally fall in line. But the opposite is also true. Those businesses whose costs are excessive and out of line presumably are not doing the other things necessary to make their business successful. When food and service quality is suspect, sales volume likely will suffer as well.

I recall something one of my professors said in a principles of management class many years ago about "putting out fires." If management spends too much time trying to put out the same fire over and over....a synonym for what is called "crisis management"...it most likely has not addressed the cause of those problems and is simply reacting to the symptoms. Such is the case with management always correcting costs after it has exceeded standards.

Think of your cost control problem as a casualty insurance policy for your business........Fire Protection.


For those of you who would like to grow your own herbs and vegetables for your restaurant but don't have the room, a new product is now available. It is called the Tower Garden. This would be a terrific addition to your patio dining area. It is a unique product, it is attractive, and it is sure to become a conversation piece. You can use it to grow a multitude of vegetables, flowers, fruits, and herbs. The cost is minimal, and it pays for itself in a matter of months.   

Click here for more information on this amazing product and to order. It's great for the home as well.

A Bit of Wisdom 

 "The will to win is not nearly as important as the will to prepare to win."

What Is Your Experience With Yelp?

Check out this article regarding Yelp. I know many of my clients have had mixed reactions when it comes to Yelp. Feel free to send me your thoughts. ron@RestaurantExperts.com




Additional "Tips and Things" are now available on "Ron's Blog."

You may access the Blog directly or you can access it from our web site. www.RestaurantExperts.com

I will be posting my thoughts twice weekly. Already posted is the complete 15 Keys featured in the last few issues of "Ron's Tip Jar."


Follow me on Twitter @ronsantibanez. I post frequent tips and suggestions to Improve Your Profitability.

 Our Web Site Has Evolved

Our very talented web designer, Cynthia MacDonald of Athensguy.com has completed the changes to our web site. Included is a slide show that shows the evolution of the development process. The slide show features one of our Start-Up projects (Before & After). We are also showcasing our Coaching/Mentor program. This program is designed for Managers, Chefs, Owners, and Operators. You may also access"Ron's Blog" from our web site.

You can also view our past newsletters on the site as well. 

Screens at the Table? 



 Panic Hiring

 Many managers schedule more staff than is necessary because they're afraid of being short-handed. If the anticipated increase in business doesn't materialize, and everyone who has been scheduled shows up, productivity declines. The only conceivable reason for scheduling an additional employee is that certain work must be done, and that person can do the job. While many restaurant operators are feeling the effects of the short supply of quality applicants, the scheduling of employees within their payroll budget is sometimes contrary to their ability to sustain service quality.

The cost of employing a worker is far greater than his or her total net pay, regardless of whether the worker is salaried or hourly. Labor cost can be defined as any cost incurred as a result of employing someone. You can estimate that an employee's total remuneration, deferred or otherwise, is at least double his or her earnings before taxes. Additional costs of employing someone may include insurance, paid vacations, profit sharing, uniforms, meals, training costs, discounts, etc.

You must resist the temptation to "panic hire." Panic hiring occurs when you've been working short-handed for several weeks, and the applicant pool doesn't posses the qualifications you require. However, you haven't had a day off in three weeks, and you're fearful that other employees who have been working overtime are thinking about quilting themselves. So, in desperation you hire the "best" of the applicants you've interviewed and hope for the "best." Sound familiar? But by doing that you are essentially creating more problems

Be prepared. Don't let this happen to you. Maintain a list of potential candidates and make recruiting part of your daily routine.



Please visit our web site http://www.RestaurantExperts.com  You can view additional tips and techniques that are regularly posted on our Profit Line Facebook page.


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 We encourage you to contact us if there are specific subjects you would like to see addressed in "Insights" or "Ron's Tip Jar".

"Insights" is a newsletter discussing issues that affect your restaurants profitability delivered by Ron Santibanez. You may also view past issues of "Insights" and "Ron's Tip Jar" by clicking here.

Contact us at ron@RestaurantExperts.com

For information regarding our start-up and profit improvement services, call us at 866-903-5875. You may also reach me by email at ron@RestaurantExperts.com


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