Punch director: Squeezing everything to find an extra profit

My past columns have focused on how to grow your top-line sales, whether it’s targeting and attracting the customers you want or making sure your marketing is talking to these people.

Now, let’s assume you have managed to do the hard work and get all of these people into your pub on a regular basis and they keep returning. How do you make sure you are converting the sales into profit? And how do you make sure you convert as much profit as you can from every pound they spend?

In terms of costs, there are many that make a big impact on your business, but most of these are fixed costs. So, other than checking you are getting a good deal once a year, the variable costs are the ones you should focus on.

I am sure most of you have a regular stocktake — if you don’t, in my view, it’s a false economy — but what do you do with the results? How much do you analyse the results? And do you share the information with your employees and discuss where they can help improve the bottom line? Do you just look at the GP% and if it’s around your target, accept it as being OK?

If I asked you what your ‘yield’ was on your last wet stocktake, would you know the answer? A good yield is one place that you can make that extra 1% on your stocktake. This translates into extra profit for no outlay — for a pub taking £10,000 a week, it can mean an additional £5,000 a year. Most managed pub companies incentivise staff for exceeding 100% yield on draft products — think about doing this.

Wastage is another place to look to improve yields and GP%, this starts with a clean and tidy cellar. If your cellar is untidy and poorly laid out, how do you expect your team to rotate your beer efficiently? Imagine if there was one or two pints left in each cask or keg, then multiply that by the number you use each week, another way to help improve yields.

What about wastage at the tap — do your team appreciate the cost of a full drip tray and the cost of a fobbing tap? A good way of staying on top of this is to have a wastage book, so you (and your team) know how much this costs the business each month.

If you are having monthly stocktakes, you will be doing a great deal to spot issues and help yields, but what about the 30 days in between — are you doing line checks on the key products? Packaged products are the easiest to do, but it is also possible on draft products as well.

You should be doing weekly line checks to keep track of losses. Also, if your employees know you are on top of things, they are more likely to tell you when things go wrong.