synergy stocktaking aidan mc donnell

Create a higher Profit

with less Sales

Aidan McDonnellDirector, Synergy

Stocktaking

www.synergystocktaking.ie

5 proven ways to grow gross profit in drink sales

1. Staff & Complimentary Drinks - Add up to 0.5% Gross Profit (GP)

2. Waste and Line Cleaning - Add up to 1% GP

3. Making promotions work for you/creating an effective sales mix- Add up to 2% GP

4. Focus on Cost Prices (and Retail prices)- Add up to 5% GP

5. Controlling Shrinkage and/or Pilferage - Add up to 6% GP

1. Controlling Staff & Complimentary Drinks1. Reduce staff drinks to 1 night per

week

or

2. Introduce staff prices on drinks

or

3. Eliminate staff drinks altogether

4. Make sure that complimentary drinks only add value to your business

2. Controlling waste and Line Cleaning

Turnover for 1 week = €10,000

40 pints x €4.00 = €160

Waste as a % of turnover = 1.6%

Target for waste = 0.6%______________________________________

Extra €2000 Profit Per Yearor

Extra 0.5% to your Gross profit

Example 1: Waste General

Example 2: Controlling for Waste from Line Cleaning

4 Pints/Line x €1.50 cost x 20 lines x 12 months =

4 out of every 5 pubs are not draining their lines before line cleaning

€1,440 pure profit

3. Increase profit through Sales MixOpportunity to increase your gross profit

through change in sales mix

GP% on Draught is 60% Promotion - Bottle of Miller for €3 Cost of Bottle of Miller 80c GP% on Promotion Bottle 67%

Higher consumption

of ‘promotion’

drinks

Suggestions for making Promotions work for your business

Maximum of 3 - 4 Promotion DrinksExamples

€3 Bottle Beer 67% GP

€3 Shot of Sour Apple 70% GP

€5 Vodka & Coke 72% GP

€5 Mojito (Ready Mix) 70% GP

4. Focus on Cost Prices

5. Controlling Shrinkage and Pilferage

(a) Careless Waste & Leaks

(b) Customer and Supplier Fraud

(c) Employee/Staff Fraud

Identifying Shrinkage and Pilferage

1. Luck

2. Stocktaking

Choices

(a) No Stocktaking

(b) Sub-standard Stocktaking

(c) Professional Stocktaking

- Quality of the Information you receive

- Determines the quality of the Actions you take

- Which determines the quantity to the profits you make

What could a 1% increase in GP be worth to your Bottom Line

Turnover & Net Profit

Annual Turnover ► €1,040,000

Gross Profit @ ► 60% €624,000

Cost of Sales @ 40.00% €416,000

Net costs @ 51.00% €530,400

Net Profit % & € 9.00% €93,600

% Boost/Decline 0.00%

What could a 10% increase in Sales be worth to your Bottom Line

Turnover & Net ProfitIncrease in Net Profitwith 10% increase in

Sales

Annual Turnover ► €1,040,000 ▲ 10% €1,144,000

Gross Profit @ ► 60% €624,000 ► 60% €686,400

Cost of Sales @ 40.00% €416,000 40.00% €457,600

Net costs @ 51.00% €530,400 51.00% €583,440

Net Profit % & € 9.00% €93,600 9.00% €102,960

% Boost/Decline 0.00% ▲ 10.00%

A 1% increase in GP is worth an 10% increase in Sales

Turnover & Net ProfitIncrease in Net Profitwith 10% increase in

Sales

Increase in Net Profitwith just a 1% increase

on the GP

Annual Turnover ► €1,040,000 ▲ 10% €1,144,000 ► €1,040,000

Gross Profit @ ► 60% €624,000 ► 60% €686,400 ▲ 61% €634,400

Cost of Sales @ 40.00% €416,000 40.00% €457,600 39.00% €405,600

Net costs @ 51.00% €530,400 51.00% €583,440 51.00% €530,400

Net Profit % & € 9.00% €93,600 9.00% €102,960 10.00% €104,000

% Boost/Decline 0.00% ▲ 10.00% ▲▲ 11.11%

The mystery of Profit in Food

(a) Actual Current GP%!

(b) GP% you should be getting!

(c) Maximum GP%!

(d) Not getting your desired GP%, why?

Know your current GP%

Know what is Selling

Dish Menu Analysis

Menu Analysis

Dish Menu Analysis

Complete Menu Analysis

The Complete Picture

Results

Create a higher Profit

with less Sales

Synergy Stocktaking

Stand A4www.synergystocktaking.ie