Back to Basics: Stocktaking
For pubs and hotels it can now be the difference between success and failure, profit and loss. Indeed, there are many recent cases where it has rescued some very serious situations.
This is sophisticated stocktaking 21st-century-style.
Good stock control is vitally important. Without it, the cash that is tied up in stock probably the main asset of a licensed trade outlet becomes vulnerable, as it is neither locked up nor in the bank.
Getting a professional stocktaker¹s independent view of the business on a regular basis provides a valuable snapshot of a pub¹s profitability. Problem areas can be identified and rectified quickly, making for a much more efficient operation.
If attended to regularly usually monthly the maximum return on your investment can be achieved. That¹s always preferable to the accountant advising you that the business is not as profitable as you had hoped after a year or more of trading.
A professional stocktaker can advise you on all aspects of good control measures, including:
- Ensuring gross profits are maintained on every single product your surplus and deficit trading positions your total overall profitability eliminating over-stocking by confirming stockholding.
- Making marketing and promotions more effective. Build a complete picture of how the business is performing against current trends providing a comparison with similar previous periods to give a historical record of trading figures identifying losses not only through accurate counting but by reporting against actual till sales to highlight discrepancies between consumption and revenue received.
- In addition, a professionally trained stocktaker's reports are accepted as valid records for tax, accounting and VAT purposes.
Stocktaking should be viewed as an effective tool to help licensees compete in today's high-pressure trade.
And if a stocktake is completed regularly, a working relationship with the stocktaker will be built up and they will become an important part of your pub¹s management team.
Stephen Grantham is managing director of Stocktake UK and Stockcheck, the biggest independent stocktaking enterprise in the country. The two companies, which offer franchised stocktaking control systems to the leisure and hospitality sector, have a client bank of more than 3,000.
www.stocktake.co.uk
www.stockcheck.co.uk
CASE STUDY: The V Bar, Skegness
A pub that once took just £1,000 a week has been transformed into a business with a £750,000 annual turnover in less than two years and the owners of the V Bar in Skegness, Lincolnshire, reckon professional stocktaking has played a major role in the stunning turnaround.
Partners Neil Morgan and Carl Reece brought in Stocktake UK when they took over the venue in 2005 and spent £500,000 turning it into a plush pub-restaurant by day and a glitzy cabaret bar with showgirls and drag acts by night.
"Our stocktaker John Pollard and his wife Lesley are very much part of the team and we just couldn¹t imagine being without them now," says Neil. ³Right from the word go they started solving problems and sorting things out.
"We thought things weren¹t quite right shortly after we took over, but didn¹t know what it was. Then Lesley asked which member of the barstaff drank Bacardi and that pointed us in the right direction!
"There was also a time when we thought there was some fiddling going on," he continues. "But when John went through things he pretty soon realised the staff hadn¹t been filling in the waste book. As soon as they started recording it properly the problem went away.
"Lesley can tell exactly how many measures there are left in a bottle of Baileys just by looking at it, and stocktaking at this level has definitely contributed to our success. More than that, we trust them implicitly and they give us peace of mind."
CASE STUDY: The Plough, Grimsargh
Lancashire licensee Karen McGrath knows what it takes to run a good pub. And she also appreciates the need for a 'tight ship' mentality and just how much careful stocktaking can contribute to success.
"It is important that every product you sell works for you. Whether it be a fruit juice or a bottle of champagne, a sandwich or a fillet steak, every item has got to perform," says Karen who, along with husband Francis, a chef, took on the Plough at Grimsargh near Preston five years ago.
"Running a pub is a complex business. If you run the risk of losing money, through staff under-ringing the tills or deliveries not being properly checked in properly, for instance, you are on the road to ruin." The Plough is part of leased pub group Scottish and Newcastle Pub Enterprises and receives monthly checks from Stockcheck.
"Taking good care of stock is imperative and a regular stocktaking service really can be the difference between success and failure," Karen believes.
"We have had the same stocktaker for the past few years and he has a real passion for the role, always available and looking for ways to help.
"I know for a fact that stocktaking has saved us money. Not just because it gives us a regular update of our circumstances, but on all sorts of other aspects.
"For instance, because our stocktaker is dealing with other pubs he can advise us what we should be paying for many products and where to access the best deals.
"Although we are very hands-on here, you can never know everything all of the time. The instant service we get from Stockcheck means we can take action right there and then, before the problem gets out of control or starts to hurt us.² Karen and Francis have both worked in the licensed trade for years, but the Plough was their first business together.
"Perhaps it was only when we took the pub that we fully valued the need for professional stocktaking,² says Karen. ³Suddenly it was our money and our risk, and stocktaking has been a crucial part of our progress."
