Tips and Things
A Cost Control Program Must Be Part Of Your Business Culture
THE PREVENTION AND DETECTION of fraud and theft are just ancillary benefits of a cost-control program, a premise that is not always clear to independent operators. Over the years I have implemented cost controls at several independent restaurants. Once completed, they would tell me that they now understood the true purpose and value of cost controls. A few independent owners felt that their physical presence and the hiring of family members eliminated the need for cost controls. Once they progressed beyond the singular idea that cost controls are to keep people from stealing and understood that the primary purpose was to provide feedback on day-to-day operations and decisions, they appreciated the real purpose and value.
Why donít all restaurant operators have cost-control programs? The answer is that they are not aware of the waste that is taking place around them. It is not very complicated, as it is all basic management. You have to be able to identify value, and you have to know your costs and detect where they are excessive. Cost control encompasses all areas from the back door to the front door; from purchasing to paying your bills; from recording each transaction to depositing the sales receipts in the bank. Cost control is also more than just computing percentages and ratios; it involves making decisions after the information has been compiled and interpreted.
Cost control is used to monitor the efficiency of individuals and departments; to inform management of what expenses are being incurred and what incomes are being received; and whether they are within standards or budgets. In essence, cost controls are for knowing where the business is headed, not for discovering where it has been. That enforces the preventative and proactive purposes of cost controls.
Keep away from people who try to belittle your ambitions. Small people always do that, but the really great make you feel that you, too, can become great.
MARK TWAIN (1835Ė1910)
Humorist and writer
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A Bit of Wisdom
Your purchasing strategy is an integral component of the overall business plan because it directly impacts profit margins, cash management, asset turnover, and return on investment. Efficient purchasing permits costs to be lowered without corresponding decrease in quality or portion sizes. Cost stability means menu prices remain stable and more competitive than those of operators who "ride the market" weekly.
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