In a previous article, ‘The Quest for Growth and Success’, we focused on a few fundamentals that a small business should focus on to ensure that it at least stands a chance for success in this competitive market. We defined success and looked at a few critical areas that would need your attention. A quick reminder- Profitability, Integrity and Honesty, Community, Quality of Life and Teams.
Now, it is true that these components are all critical considerations in your basic business framework and that without attention to these, your business will probably not be successful. But let me remind you that these are some of the larger pillars that most startups dream about when they get going. Probably a good idea to investigate some of the smaller, yet vital components of your operations that will contribute to the larger pillars mentioned above.
The South African economy is extremely sensitive at present and with an extreme unemployment rate many entrepreneurs see the foodservice industry as one of the more attractive industries to embark upon. If you are one of the very few startups to be fortunate enough to get a contract to supply foodservice to a client, you need to ensure that you follow the ‘basics’. These basic elements will contribute to the overall success of your enterprise. You have won your contract, and all is set up to start providing the services that you and your team have promised to the client. The premises are ready, and you need to, at this very early-stage, focus on the operational methodology that will either make or break your success.
The diagram that I will share with you below, speaks to the Profitability component of your success. Off course, there are multiple factors that can also influence the profitability but controlling the foodservice process is critical.
- Contract Specifications- No foodservice service should be embarked upon without a well-documented contract that clearly defines the various specifications for the service. This is ultimately your rules of engagement.
- Menu Specifications– Margins in the foodservice industry is much smaller than most would believe and the competition in the market forces even the smaller role players to compete at extremely low margins. It is of absolute importance that you give attention to this aspect and ensure that your teams fully understand the implications of deviations.
- Menu Cycle– Your menu cycle needs to be well designed to ensure that you address the dietary needs of your customers while ensuring the profitability is in tacked.
- Production Schedule– To provide the foodservice according to the menu specifications and the menu cycle, your team now need to plan production of the various components of the menu cycle. Who will be preparing what part of the menu, in which area of the kitchen with specific equipment at specific times? The planning of your production schedule will ensure that each member of your team will know exactly what is expected of him/her at a specific time. They will also know what ingredients will be required and the quantities for the specific dish.
- Weekly Supplier Orders– You have completed your production planning and now need to get the goods to your stores. Orders will need to be placed from reputable suppliers that you have agreements with and that you know are not only reliable, but also provide the best quality at the best price. Too many small businesses fail in this area by rushing off to the nearest supermarket to purchase goods at extreme prices due to their own lack of planning. Make sure this is not the case with your enterprise. This is also an important part of your administrative controls but more about that later.
- Receiving of stocks– When receiving stock, it is important that your team ensures that the goods are exactly what was ordered, the quality, quantity, price, packaging, temperature, use by dates are all as prescribed when you ordered the goods. Immediately move the goods to the respective areas of holding after receiving.
- Issue stock according to Production Plan-Quantities will be issued in line with the Menus Specifications to ensure that you don’t under or over produce components of the menu. Ensuring that you follow the FIFO principle (First In First Out)
- Production-Your team knows exactly what they need to prepare, who should do what, by what time it should be ready and in what quantities. This planning was completed when you did your Production Scheduling.
- Service– When the production is completed the service of the day will start. Now delight your customers with that special meal that you planned and prepared as if it is the last meal, you will ever serve.
- Returns- When service is complete you will record what product is returned and the value of such.
- Waste recording– Determine which components of the returns will be waste (cannot be re-used safely).
- Customer Satisfaction– Through the customer feedback and their participation you will be able to determine the level of customer satisfaction. Always ensure that you pay particular attention to components that are perhaps not as popular as you may have thought initially and adjust menus where possible. Plate survey will assist here as well.
- Profitability – At this point you will be able to determine the profitability of the meal served. If you adhered to the correct procedures throughout the process, and the participation is in line, you should have a profit as predetermined when you did your costings.
I mentioned the Administrative process under the Weekly Supplier Orders’ section. Let us briefly look at this process flow to highlight important areas of control.
- Weekly Orders– When receiving the stock ordered from suppliers, your team will ensure that the goods are exactly as ordered and that the specifications per product is accurate.
- Capturing of invoices– You need to ensure that you record the invoices correctly. You will categorize the goods into ‘families’ for stock taking procedures.
- Weekly Stock take- Once per week, do your stock take. During this process you will determine what levels of stock you have in stores and the value of such. This enables you to order only what is necessary in the next weekly order cycle.
- Profit/Loss Calculation– Once you have done your stock evaluation, your daily income, your purchase costs, and your overhead costs, you are now able to determine the Profitability of the foodservice.
The Process Flow
This very basic process flow will have surprisingly positive results if you do it correctly. Those dreams of success unfortunately need to be supported by pure and simple hard work. If you and your teams do this with passion, you are sure to succeed in not only delighting your customers but also succeed in addressing the Profitability pilar of building a successful business. I mentioned that this article will speak to one of the many pillars of your success and remind you that it needs to be completed in conjunction with the other important elements also mentioned.
Soon we will be discussing the other elements that will assist you in your ‘Quest for Growth and Success’
