OUR "EXPENSE LOSS" REVIEW IS COPYRIGHT PROTECTED ASK TO LEARN ABOUT HOW OUR PROCESS WILL IMPROVE YOUR BUSINESS
WHAT YOU DO NOT KNOW ABOUT YOUR BUSINESS IS POTENTIALLY REDUCING YOUR PROFITS
Expense Loss is the variance between money that is currently unsystematically expensed on product, services, or equipment and the achievable amount of expense reduction that is possible or interpreted through a review and fiscally applied methods of spending behavior and forward thinking decisions.
Common unsystematic spending can occur in any business, and with useful information or training this encourages a more fiscally responsible method of performance and behavior that will improve your profits
If you are experiencing any concerns or difficulty in your hospitality operations it is time to call us; My name is Jim Lopolito, President of Lopolito Hospitality Consultants.
It is well documented that there is a high failure rate in hospitality food service with café’s, restaurants, and caterers struggling to stay in business with an elevation in country club closures also occurring. I have consumed years of observing patterns to uncover reasons for this dilemma and my methods to improve a business or reverse troubles has been well established in the years of services I have provided in this industry.
While there are an abundance of influences that can lead to difficulty or demise of a business, a specific cause that I observe continuously is with expenditure behavior management "EBM", which is the reason that I created and coined the term, “Expense Loss”.
Management is occupied with the revenue generation areas of a business because there is a firm belief that without growing revenue you cannot survive. While revenue growth is certainly a necessary path to be on, spending behaviors in hospitality that cause an equal or further amount of expenditures than incoming revenue (without the knowledge that this is occurring) is a common dilemma in the hospitality industry.
You can increase revenue but your expense grows concurrently or even excessively if you are not being responsible as you grow. Yes there are plateaus for some fixed expenses and upon attaining higher revenue the expectation for additional profits can be realized if you are managing your decisions effectively. However, my observations indicate that as additional revenue begins to achieve more profits the expense decisions develop into more of a luxury and ease of concern, and this always becomes problematic.
In order to correlate business closures to the unambiguous cause from Expense Loss I began to observe the relationship between managing expenditures in organizations and how they were accepted or treated against other practices or procedures used by management in the goal to achieve profits. This relationship examination uncovered ongoing efforts to build the business with an acceptance to expenditure procedures when the business seemed to be doing fine or the appearance that plenty of revenue was incoming to support profits was ongoing. Instead of using hard analysis information and continuous monitoring most go by gut feeling that business is good, so must be profits. When looking at common expense and loss related to; service delivery issues, guest dissatisfaction costs, insufficient recipe calculations, disproportionate menu prices, overburdening vendor prices, profit or loss associated with guest/member programs, profit or loss associated with coupons and percentage off programs, unmonitored repair and maintenance costs, and other concerns and then comparing this to expenditure management behaviors the comparison showed a disconnect by management for many or all of these issues up until profits were determined lacking. During this time I learned that while having consistency within an organization can foster stability and progress; I also noticed common behaviors among businesses that expected their level of profits to be based upon their achieved revenue, which is an afterthought. Few businesses seem to consider the effectiveness of fiscal responsibility beforehand, or the fact that you can earn higher profits without increasing revenue simply by paying more attention to money lost on expenditures now, and not after you realize that expected profits were not achieved. Attached to this is the ultimate action by owners and managers to cut expenses like payroll or quality of product to reduce costs quickly without regard to the repercussions of their decisions long term or alongside their guest’s enjoyment considerations.
To learn more about building your business, improving expenditure management behavior, or to learn if you are experiencing "Expense Loss" reach out to us at LHC.
Jim Lopolito, President
Request Our "Expense Loss Review" Our review includes a detailed written report that you will use to progress your business
Our proprietary ELR program reviews the operational aspects of your business that you want to learn more about. From this information, we build a report that offers the well-run areas along with the deficientareas of your business. We also look at cost center variances between money that is currently unsystematically expended on product, services, or equipment, and the expenses going forward upon our review and implementation of practical methods of spending behavior. EXAMPLE “Expense Loss Review” (Reviews Are Customized) 1: Ordering Department 2: Receiving Department 3: Counter/Register Procedures 4: Dining Room/FOH Procedures 5: Cleanliness and Sanitation 6: Obstacles Hindering Performance 7: Customer/Membership Reviews 8: Management Review 9: Yield Management 10: Facilities/Building Management 11: Inventory Management 12: Kitchen/BOH Procedures 13: Menu & Recipe Costs 14: Bar Operations and Costs 15: Invoicing and A/P & A/R Review 16: Golf/Pool Operations 17: Additional Review Items Found
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Restaurant Consultants and Country Club Consultants