BEVINCO, an independent profit control and revenue enhancement service for the hospitality industry, is announcing its partnership with TheBarBlogger.com. The new alliance will foster growth and enhance information sharing throughout the hospitality community.

Barry Chandler, aka The Bar Blogger, is known for his bar and nightclub management Web sites that provide online resources for bar operators. For example, Chandler’s Web site Manageyourbar.com offers helpful tips from opening a bar to managing a kitchen.

“We are thrilled to announce this partnership, because it will allow bar owners to manage their establishments more effectively and improve the bar industry as a whole,” said Barry Driedger, president and CEO of BEVINCO. “BEVINCO has 300 franchisees and over 1000 employees in bars on a weekly basis. We can provide great insight to TheBarBlogger.com as to what is happening on the streets.”

Through the partnership, all BEVINCO clients will have access to reduced prices to hundreds of downloadable resources, articles and Webinars. In addition, visitors to TheBarBlogger.com will receive exclusive video tutorials and advice from BEVINCO on controlling inventory costs and stock management.

Industry studies have shown that approximately 50 percent of new restaurant ventures fail and independent BEVINCO studies indicate that this situation exists largely because the industry rarely employs standard management and control processes that are viewed as critical in any other industry. The BEVINCO system provides a means for restaurant owners to identify these gaps and implement control strategies which can help to ensure business success.

I hosted an event online yesterday for 50 Irish and UK hospitality businesses where I spoke for two hours on the subject of inventory control or stocktaking as it is referred to in Europe.

The unfortunate truth about stocktaking is that for many bars/restaurants they are either reluctantly undertaking a physical inventory every so often or they are doing nothing at all and to be quite honest, neither is good enough.

In this day and age, when the economic difficulties of doing business are as plain as day, it should be obvious to business owners that in order to Manage, they have to Measure. There are no two ways about it.

Do you think a bank could stay in business long if they didn’t count their cash at the end of the day? (sadly many banks have gone to the wall for other business sins….)

Do you think that a dry cleaning business would last if they kept losing customer’s clothes? I don’t think so.

I argue that by this measure, there is no reason why a bar or  a restaurant shouldn’t be keeping daily tabs on their stock and cash.

One bar owner recently shared with me his surprise that his bottom line normally improved for the few weeks after he was presented with inventory results. Unfortunately he was only presented with results twice a year.  Something wrong with this picture?

If you make cost control and physical inventories into scheduled tasks that happen a few times a year, don’t expect miracles. But by adopting a black and white mentality whereby there are consistent standards and measures in place, you may be just as surprised as our bar owner, except you’ll be surprised at what you’ll find all year long!

I’m travelling between Columbus Ohio and San Antonio Texas today on my way to my quarterly mastermind meeting (more about that later). Walking through the maze of gates and terminals in Chicago airport, I was reminded how the larger chain restaurants and cafes can teach smaller owner run establishments a lot about portion control and cost control.

As a restaurant chain grows and more outlets are added, the risk of group failure is multiplied by every additional outlet that opens. Restaurant chains therefore have to have a solid system of cost and portion control in place before they scale up so that they don’t take their weaknesses with them to each additional opening.

As I was walking past Auntie Annes, a bagel chain, I noticed that one of the workers behind the counter was busy rolling the dough for the bagels. Once she had the dough rolled, she laid the length of roll on the counter over a pre-printed image of a pretzel, allowing her to make sure the size of her dough matched the size painted on the preparation area. This way, every bagel prepared by every worker remains the same size and head office is able to calculate their costs for this item very accurately. If every worker had his own ideas for the size of a bagel, cost control would go out the window and consistency would be eliminated.

If you’re not applying the same mentality to your serving sizes and portions, then now would be a good time to do so. Here some simple ways to start controlling your portion sizes today:

1. When serving soup, instead of filling the bowl to the top every time, use a serving ladle that holds exactly one portion of soup that you have already worked out the cost on, ensuring consistency each time.

2. When serving mashed potatoes or vegetable with lunch or dinner, set a standard number of scoops to be used. For example, two scoops of mashed potato leveled off and using the same size scoop every time.

3. When serving cocktails, check to make sure that your customers are actually finishing their drinks. Maybe your glassware is too big and too generous. Maybe your glasses are larger than your competitors and don’t need to be. Being generous is great, as long as it doesn’t cost you more to be generous every time.

4. Check the garbage! While you might not have to go through the garbage by hand every night, you do need to pay attention to what is coming back on the plates from your customers. Look for trends where certain dishes are never finished. Are you giving out too many boxes for your meals for your customers to take home when you could just be reducing the size of the portions?

I once read the results of a survey that said 20% of bar owners said they had been the victim of theft in some form or another. It went on to say that the other 80% were either lying or not aware of just how widespread theft and fraud in this industry is.

In an average week, I work with 5 or 6 Hospitality Business owners in identifying stock and cash losses and implementing simple effective procedures to Identify when theft is occurring, Eliminate the losses once identified, and Implement a procedure to prevent it from happening again. It never fails to amaze me as to the level of complacency that exists and the potential that exists for significant losses.

Follow these steps and you’ll reduce the risks in your business:

1. Standardise your Systems

Sounds complicated but this simply means that every critical action in your business needs a standard system and method. Take your Cash Reconciliation of your Tills at the end of the night. If you don’t follow a certain system, you won’t get your reports, your tills won’t be zeroed for the next shift and you won’t know if cash takings are down. The same applies to every other action in the running of your business. Document your House Standards and train each staff member so that everyone completes a task the same way. Once staff members have been trained, a standard is in place and it will become easier to monitor staff performance.

2. Perform Physical Inventories

Hire an external stock auditor to undertake regular inventories and to report the variance results directly to you, product by product. Only by knowing exactly which products are missing can you take action to prevent the theft. A ship taking in water needs to know where the hole is before it can plug it. Think of your business the same way and you’ll fix the problems in a timely manner. I know one owner who used an external auditor to assist with the first few months of inventories, they tightened the stock losses to a satisfactory level and now the owner performs his own spot checks in the bar on random occasions. The staff see him counting and know he is serious about control procedures. What they don’t see, is him throwing away his count sheet without even looking at it…..his accountant gives him a profit report once a week, he sees he is on target based on stock sold so he uses this exercise to keep the staff on their toes.

3. Undertake Surprise Cash Counts

If you do have an opportunistic staff member working for you, (s)he will be looking for routines in the business to take advantage of. Similarly to dropping your cash to the bank at random times to foil thieves, you should do the same within your business. Most bars wait until the end of the night to balance their cash and most staff know this. If a staff member has been taking cash from customers without entering anything into the till, then they will normally wait until the end of the night to remove their “takings”. Remove this opportunity by taking a reading from the till at random times during the day and counting the cash. If you have too much in the drawer, the chances are you have stumbled upon the aforementioned scheme.

4. Remove Managers Keys and change Passwords

If you leave Managers Keys in the till during service, you are allowing staff to perform refunds, void transactions, print readings of cash takings, program prices and so on. Obviously you don’t want this to be going on so only provide a Manager’s Key to trusted members of management and keep a record of who is in possession of these keys. Certain tills, do not require keys, but a password to undertake the above functions. Change the password every few months or whenever you think there is a problem in the bar. Never write it down or disclose to the bar staff. This is another variable you can remove from your business to bring you closer to a business that gives you answers rather than raises questions.

5. Manage your Back Door

How many times have you seen a member of your staff signing a delivery docket from a supplier without checking the delivered quantity? This is another area which needs standardisation in your business. All orders to suppliers should be on a Purchase Order. This should be matched to a delivery docket and both checked that they correspond. Any variances should be noted and countersigned by the supplier or driver and both dockets sent to accounts payable for comparison with the monthly statement from the supplier. I have just been working with a business that was losing a Case of Coke a week from the delivery area to another supplier who would deliver at the same time and when he dropped the vegetables off, he would take the case of coke with him as he left because nobody had stored the soft drinks away as they were delivered. A case of coke a week is worth an average of €50 a week at retail which is over €2500 a year if not spotted!

Start with these steps and you will begin to have a more measurable and manageable business. It starts with you and must be continuously enforced by you to ensure success.