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Saving Big Dollars in a "small-dollar" Budget Line Item of Your Hotel or Restaurant Chain
publication date: Apr 2, 2021
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author/source: Steve Pierce
As a savvy chain restaurant or hotel operator, you are constantly looking for cost reductions that can be made to increase your profit margins. Because food costs typically represent 38-42 percent of your costs, that is where you will often expend most of your energy when evaluating cost reductions. But are you missing some of the operational cost reductions that can help improve your bottom line?
Saving Big Dollars in a "small-dollar" Budget Line Item of Your Hotel or Restaurant Chain
Take a look at your chemical sanitation program. Industry average shows that you are probably spending over 1.0 percent of your Total Annual Revenue on your sanitation program, but that is about 0.55 percent too high! In a more perfect world, where chemical waste is eliminated (through staff training and elimination of volume-pushing chemical providers), you should be spending in the range of 0.45 percent on your chemical budget. (See my earlier article on how to accomplish this: http://www.foodservice.com/articles/food-safety/food-sanitation-chemicals-a-better-business-model/ So how can a 0.55 percentage reduction add up to serious money back in your pocket? Consider the following examples: Chain "A": 15 locations averaging $650,000 total revenue annually = $9.75 M Industry average chemical sanitation expenditures (1%) = $97,500 Waste reduction chemical sanitation program (0.45%) = $43,475 Waste Reduction Program Savings = $54,025 Chain "B": 100 locations averaging $800,000 total revenue annually = $80 M Industry average chemical sanitation expenditures (1%) = $800,000 Waste reduction chemical sanitation program (0.45%) = $360,000 Waste Reduction Program Savings = $440,000 So next time you are digging deep for cost reductions, take a look at what you are spending on your sanitation chemical program - you might find Big Bucks to put back in your pocket through a simple "small" waste reduction strategy. Now that's Sustainable business! For more information, go to www.prosaninc.com or contact Steve at spierce@prosaninc.com Read more: http://www.foodservice.com/articles/business-financial/saving-big-dollars-in-a-small-cost-category-of-your-restaurant-chain/#ixzz1mxrLbqCt |
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