I know first hand the value of increasing your gross profits as a former operator working with successful brands such as Living Rooms, Mosquito, Deep Pan Pizza, Via Vita, Chiquito and Bass Taverns – and why your EPOS solution and procedures are essential to drive your margins upwards.
Just as critical as the actual EPOS hardware and software, the standard procedures you embed around your EPOS system ensure every single transaction within the business is accurately recorded and explained. And how you combine cash control and reconciliation, stock control, detailed sales reports and EPOS database management gives you the intelligence and data to drive serious growth.
As anyone who has ever worked in the hospitality sector knows, there are no quick fixes or magic formulas when it comes to implementing new procedures and changing business practices.
Rather than ‘one giant step for mankind’, it’s all about taking lots of short steps to establish the true facts before you can decide if your margins are going to give you the profits you need to grow your business.
Here I’ll run through the 10 essential steps you need to take to increase your gross profits using EPOS.
Step 1: Define your ‘base‘ stock result
This is your starting point. Once you’ve determined your ‘base’ stock result you have a figure to measure your performance and improvement.
Step 2: Categorise your key sales areas
Now breakdown down the relevant key sales categories of your business. In most instances for bars and restaurants that’s going to be liquor and food.
Coffee sales are an increasingly important for pubs, bars and restaurants and often this sales channel deserves its own category.
Step 3: Configure the EPOS system
Next configure your EPOS system so you can access all the information you need to give you an accurate stock result taking into account what’s been sold, what’s left; what’s wastage.
Step 4: Set up a supplier database
Once you’ve configured the EPOS solution, your next step is to enter all the suppliers into the system.
This is a really easy task – the hardest or most time consuming aspect is sourcing accurate supplier information.
Normally the information is simply sourced from supplier invoices and includes cost price and details about each supplier.
Step 5: Add ‘recipes’ to the mix
Once supplier details and the products have been uploaded, the next step is to define and input all the different ways you retail your products.
For example, how many ways do you sell Stella lager to your customers ? Although draught Stella is delivered in a keg, we retail it in a wide variety of different measures from a pint, a half, a jug, a shandy, a splash of lemonade or a drop of blackcurrent juice. This comprehensive breakdown must include everything without exception.
With coffee it is more involved. You should include every item and product you use to make and present a ‘coffee’. This includes the coffee beans for each cup, milk, sugar, sprinkling chocolate, a ‘complimentary’ biscuit and any other sundries such as paper napkins.
Step 6: See actual costs
Once everything is inputted into the EPOS system you can see what it costs you to offer your menu to your customers. This will produce a true cost – a positive or negative WOW factor depending upon whether you’re discovering it’s costing you MORE or LESS than you imagined!
Step 7: Report a true picture
With all the relevant information in the system and sales data constantly being added to and updated, you can run reports to show what you have sold and the stock used to make those sales.
A forensic examination of a sales report normally highlights any major errors or ‘issues’ – and gives you the information to work out the reasons why this is happening.
To maintain a real tight grip on you business, I recommend running regular reports on a daily basis to spot and rectify small mistakes before they snowball into major collateral damage.
Step 8: Deal with variances
Reports invariably highlight variances in stock – and give you the opportunity to find the cause and the cure for any variances in stock levels.
You can do this because you have meaningful and accurate information to review how your business is performing.
Step 9: Always be consistent
Having established the procedures, it’s important to get in the habit of running and analysing reports.
Seeing your GP percentage improving is all the encouragement you need to continue to put your business under the microscope.
Stage 10: Roll out across the business
As I said earlier in this piece, boosting your GP is a gradual process and cannot be rushed.
Normally I would recommend starting with liquor and coffee sales before moving on to food and the need to establish portion and recipe control within your business.
Want to boost your GP?
If you have any questions or want to discuss how we can do the same for you don’t hesitate to get in touch. I can be reached on 0800 655 6264 or by e-mail.