Do You Suffer From One of These "Little" Problems that Keep Restaurant Owners Poor?

• Have you ever been busy in your restaurant, served something to a customer quickly meaning to add it to the bill later, but only remembered after they have left?
• Have you ever found staff stealing stock, or giving it away to their friends without charging?
• Have you ever had a customer steal from your shop or restaurant, or try and leave without paying?
• Have you ever had staff steal money, to take payment from a customer and put it in their own pocket instead of giving it to you?
• Have you ever had a customer send back an order because it was taken down incorrectly, or the kitchen staff could not read the scratchings on the order pad?
• Has a customer ever left your business without spending all they money they were willing to spend, because they ran out of time and your service was too slow?
• Have your staff ever missed an opportunity to increase the value of a sale?
• Has one of your customers ever bought from one of your competitors, because you missed an opportunity to give them a compelling reason to return to your business. Something as simple as a coupon on their receipt or some other promotion that would cost you nothing?

But Do These Little Problems Really Matter?

Some retailers don't think so. Yes, they know they have the little problems, but think that since their gross margin is around 30%, then the cost of a lost stock item can be made up with just 2 or 3 sales. Not so fast!

Out of your gross margin, you also have to cover other expenses such as rent, electricity, advertising, accountant's fees, legal fees, staff wages, taxes, cleaning, interest, repairs and maintenance. The list goes on. After everything else, you need to achieve a worthwhile return on the capital invested as well as the time you invest in running the business. Gross margin means little. The important thing is the net profit remaining after all other expenses.

Around the world, retail is recognised as a type of business that features high turnover (sales) and low net profit margins. For example, the Australian Tax Office rates retail as having second lowest net profit margin of all Industry types at only 4.5% average for all types of retail.

Data derived from Statistics Canada shown in the nearby graph, shows lower overall figures as well as the volatility of net profit margins depending on seasonal and other factors.

What Is Your Real Net Margin, And What Does It Mean?

The formula for calculating your Net Margin is shown to the right. In other words, if your net profit after tax is $50,000 for the last 12 months, and your total sales over the same period is $2,000,000 then your Net Margin is only 2.5%. Your markup might be 20 or 30% or even higher, but in retail the net margins after all expenses are often quite small.

What is your net margin?

If your net margin is currently 2%,

• to generate $1 in net income, you need to generate $50 is sales.
• and you lose one unit of stock, then you need to sell around 50 units to make up the difference.

Very Small Operational Differences Result in Huge Differences to Your Net Profit

For most retailers and restaurant owners, increasing the net margin by as little as one or two percent can boost the net profit for the year by as much as 50%.

Similarly, a decline in your net margin of as little as one or two percent could wipe out your entire profits for the year.

Worried? You should be.

And it gets worse. Because statistically, for every such problem you know about, there are many more instances that you don't know about.

• Do you know how many times customers are served items which are unbilled in your restaurant?
• Do you know how often staff steal stock from you?
• Do you know how much theft by customers occurs in your shop?
• Do you know how often your staff steal money, or take payment from a customer and put it in their own pocket?
• Do you know how many orders are sent back because they were taken incorrectly? Or do the staff just consume the dish themselves and say nothing?

Each instance where stock or money is lost is just a little problem. But combined together, these little problems keep retailers and restaurant owners poor.

And dealing with the problem is difficult, because you don't know for sure where the problem lies. In many cases the retailer might think they know where they are losing money, but in fact they are losing more somewhere else that they didn't know about. Until you know where the problem is, there is no way to deal with effectively.

The SELLmatix War on Low Retail Profits.

SELLmatix provides a three pronged attack against stock shrinkage and theft that evens the odds in your favour:-

• It prevents many of the errors that cost you money from occurring.
• It shows you where potential problems may be occurring, and makes it easy to control the things that matter. This means you can concentrate your effort where it counts, instead of wasting valuable time for no gain.
• It provides highly detailed information that lets you zero in precisely on the problem areas that are costing you money.

For example, with SELLmatix, orders are entered into the system, either at the POS terminal, or on Pocket PC's carried by waiters. The orders are automatically printed at the correct food and drink preparation areas. Food in the kitchen, drinks at the bar, coffee at the coffee machine, desserts at the dessert trolley. As a result:-

• time is saved because the waiters don't need to take orders to the preparation areas. Less staff do the same job.
• Nothing is left off the customer's bill. The system adds it automatically.
• No more mistakes on orders because of bad handwriting. Orders are printed clearly on the printers, and this reduces the number of orders sent back and the amount of wastage.
• When the customer pays, the payment needs to match the amount on the bill. It becomes far more difficult and complicated for a waiter to keep all or part of the customer payment themselves.
• Every time an operator does something that could possibly be used to cheat the business, it is logged, and activity totals are shown on the Z-Read. That way you can spot trends.
• At the end of each day or shift, the system shows you exactly how much money should be in the cash drawer, to the cent. If there is a variance when you do the physical cash count, you know immediately if there is a problem.

There will always be occasional situations where an operator needs to open the cash drawer without finalising the sale. But if an operator is trying to cheat the system, then they will have to do this more often. Every time they open the cash drawer without finalising the sale, it is recorded by the system, and the total number of times is shown on the Z-Read. If there is a change in the usage pattern, you can see it on the Z-Read, and investigate in detail.

There will always be cases where a customer cancels an order. But if it happens too often, then it might be that a dishonest operator is "cancelling" orders after the customer has paid, but before the payment is processed. Every time an order is cancelled, details are records by the system in great detail. And the total number of instances are shown on the Z-Read and you are alerted to the problem so that you can check the audit trail in detail.

Price Changes, Voids, Discounts or any possibly risky activity is recorded and logged by the system, and you can see at a glance if something unusual is happening. That means you don't need to wast time chasing shadows.

And when you do want to investigate something in detail, each action is recorded in the audit trail, with up to 54 separate pieces of information about each event logged.

At Last, a Practical Way to Control Stock

Almost any Point of Sale system provides a way to implement stock control. But it is so difficult that few retailers succeed. With other systems:-

• You need to close while the stock is counted. If you try and trade while counting stock, there is no way to tell whether sales occurred before the count is made or after. So you are forced to close for stocktaking.
• Entering stock receipts is complicated, so that job gets left until later. And sometimes forgotten. Some systems won't even let you sell an item if the system thinks it is out of stock. So you receive a delivery, and before you have a chance to enter the stock received, a customer has taken an item from the box and is standing at the POS terminal trying to buy. But the system won't let you until you enter the stock received. So many retailers turn off stock control because it is too impractical.
• You have no easy way of recording items taken for the owner's use, or broken and these add up. And because stock counting is so complicated, it is done rarely. Maybe every 6 months, maybe every 12 months. And by the time the stock count is done, you have big stock differences, and no way to tell where the discrepancy occurred. If you don't know the cause of the discrepancy, you don't know if there is a real problem, and you don't know what to do to fix it. So all your extra work has no benefit.

SELLmatix makes stock control practical.

• Recording stock deliveries is as easy and as quick as selling items. It isn't time consuming or complicated as it is on other systems. Plus, SELLmatix will allow the stock on hand to go negative, so sales are never delayed or restricted because a stock delivery has not been entered. And when it is entered, the stock balance automatically corrects.
• In most cases, you can count the stock while trading, through the POS terminal. You enter the stocktake quantities for each item similar to the way you sell multiple quantities of an item. With the same number of keystrokes. The stocktake figures are recorded in sequence with sales and so the system knows whether a sale occurs before the count or after.

  The only thing you need to be careful of, is whether a customer has taken an item from the shelves before the stock was counted, and still has it in their shopping basket when the count is entered into the POS terminal. In most cases that is fairly easy. In other words:-

  • You don't need to close in order to count the stock.
  • You don't need to pay extra wages and salaries for staff to perform the stock count. Existing staff can count stock during quiet periods when few customers are in the shop.
  • You can implement stock control gradually, one department at a time instead of trying to do everything at once. That make the task manageable.
  • You can check stock over short intervals. Each day if you want, until the correct procedures are implemented and the problems causing stock loss are resolved.

    If you count the stock once in 6 months, there is no way you can identify where a loss may have occurred. But if you count the stock for a single department once per day, you will be able to identify where the loss occurred. Once that problem is fixed, you gradually increase the intervals between stock counts for that department, and extend stock control to other departments.

• You can record "sales" of items to owner or staff accounts, along with known breakage, and these can be recorded in separate operating "divisions" so they are not mixed in with your normal sales and tax totals. That way, you measure how much stock is being used by owners, staff and breakage instead of guessing about the cause.

You can only fix a problem when you know the cause. SELLmatix lets you know what is happening and in most cases, it provides this information with no more work than you are currently doing now. Other systems impose much more cost and work, and after all that effort, the information is often not useful.

With SELLmatix, you don't just save money. You make more money.

In a restaurant or bar, there are only 3 ways to increase sales.

• Sell more to each customer.
• Sell to more customers.
• Get your customers to return more often.

SELLmatix helps you with all three.

Some waiters upsell customers more effectively than others. When their glass gets low, they ask if the customer wants another. They suggest complimentary dishes to go with what the customer has ordered. And they can make the dessert sound so tempting that the customer says "why not?".

With SELLmatix PocketPos, waiters who are effective at upselling take the orders using the Pocket PC terminals. These valuable staff don't have to wast time delivering the orders or clearing the tables. That is handled by the other waiters who are less effective at upselling.

Many times a customer is willing to buy more, but they have limited time, and so orders they would otherwise make are missed. In those cases, customers are leaving your establishment with you money still in their pocket.

With faster order processing using SELLmatix, these sales opportunities are no longer missed. If you were able to sell just one more drink to each table seated in your restaurant, how much difference would that make to your bottom line over the space of a year?

Do you have customers waiting, or who are turned away because you have no tables available? With SELLmatix, the time taken to serve customers is reduced. Faster service means turning your tables more quickly. How much difference would it make if you could serve more settings per table for each meal?

With a faster, more efficient and more pleasurable dining experience, your customers will want to return more often. And when your customers are deciding where to go, SELLmatix helps swing the decision in your favour with coupons printed on the bottom of their receipts from their last visit. It is remarkable how often the decision about where to spend the evening is determined by a coupon offering something that costs you nothing.

With SELLmatix, you can print special offers at the bottom of the receipts that entice customers back at times where your traffic is slow.

With SELLmatix Remote Control You Are Always in Your Restaurant.

Does service in your establishment drop off when you are not there? Do takings fall off, and then magically increase when you return?

With SELLmatix Remote Control and a normal broadband internet connection, you can see what is in the 'till, check the number of orders being served and what has been sold. You can run reports just as if you were in the restaurant. And you can do it from home, from your office, from your hotel room. In fact anywhere you have internet access. And you can do it securely with the high quality, industrial grade data encryption built in to SELLmatix. And by adding low cost Webcams, you can see and hear what is happening as well. With SELLmatix Remote Control, no matter where you are, you are always in your restaurant.

How Much More Do You Want to Lose?

If you had SELLmatix installed and running in your restaurant one year ago, how much extra money would be in your pocket now?

Every day that you open your business without the benefits that SELLmatix provides, it costs you money.

Why lose more? Call Ing. Francisco Gonzalez now on 314 506 3577 to discuss arrangements for installing SELLmatix in your restaurant.

Together we can solve these small problems that are keeping you poor.