Know your margins (and make sure all your staff do too)


Know your margins (and make sure all your staff do too)

Know your margins (and make sure all your staff do too)

Founding Director, Sally Whelan, discusses the positive impact of encouraging your whole team to take collective responsibility for your business.

Embedding an understanding of sales margins throughout any hospitality business is good practice. Overheads are at an all time high (from rate hikes to the plummeting post-Brexit pound’s impact on food imports to increasing labour costs). All of this puts enormous pressure on anyone running a business in the sector.

The number of businesses that fail every year is staggering – four in ten UK businesses don’t make it past the five year mark, and the ‘death rate’ of businesses in the UK is around 10%.

In this context, it’s imperative to ensure that every team member that can influence sales understands the impact their performance can have and grasps the important part they play in helping to deliver more profitable results.

How much detail you choose to share and when will depend on experience. Ideally, from the outset, some practical training on the menu, drinks and other merchandise including financial information should be compulsory – you do it for health and safety so why not do it for sales too? There should be a process in place to review this regularly with the entire team.

Information needs to be straightforward and simply presented. The challenge is to make sure the team use this knowledge effectively, re-framing upselling as something that can enhance the guest experience. It should become embedded into the culture of the business, so that a healthy approach to sales is second nature. From a customer perspective, there is little more irritating than feeling like you are being ‘sold’ to in an automated way, but where front of house staff can add value by suggesting alternative options, increasing choice and responding to individual guests’ needs, skilled and tailored selling is a way of demonstrating attentive, personalised service.

It goes without saying that careful menu development, consistency of dishes and having the discipline to routinely review the approach to sales is critical to ensure a healthy bottom line in any hospitality business. Getting front of house staff involved is a shortcut to invaluable feedback and incremental increases in sales. Whether it’s being encouraged to pass on guests’ comments to chefs, or checking in with customers after their food has been served, the whole team plays a part in ensuring margins are maintained.

There may, of course, also be resistance from management to be transparent about the figures. But I would argue that it’s essential and nobody can afford to keep staff in the dark in the high stakes world of hospitality.

Where the whole team takes collective responsibility for the profitability of the business they work within, it becomes a group effort: a target everyone is on board with. This has to be good news for the future health of the business.

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