5: Turning A Profit

Show Notes

1. Pareto’s Rule
   1. Vilfredo Pareto was a 19th-century economist and sociologist interested in land ownership and the social distribution of wealth.
   2. Pareto found a pattern: over 80% of the land in Italy was owned by less than 20% of the population.
   3. The Italian economy was highly concentrated among a relatively small group of individuals.
   4. In Pareto’s garden, 20% of the pea pods produced 80% of the peas.
   5. Identify your critical few and watch them like a hawk
2. If you spend more than 1% of your food cost on it you should be paying attention to it.
   1. Food sales are 100,000 1% = 1,000
   2. Food sales are 30,000 1% = 300
   3. Follow that rule of thumb or find your own guideline
   4. You’ll probably end up following 8 to 10 items.
   5. Zero in and start asking question.
      1. How the products are handled?
      2. Is there waste?
      3. Portioning – new prep guy or line cook?
      4. Yield – lazy prep?
      5. Spoilage – over ordering?
      6. Theft – make it hard to steal
      7. Make it easy for honest people to be honest
   6. Check the critical few daily
   7. Ask lots of questions
      1. Should I lock it up?
      2. Should I move it to a different location?
      3. Am I locking up the right things?
3. Stop looking at dollars and start looking at physical volume
   1. Calculate a theoretical usage by tallying item sales
      1. 300 single hamburgers
      2. 200 double hamburgers
      3. 500 patties sold
   2. Calculate actual usage
      1. 200 beginning inventory
      2. 500 purchases
      3. 100 ending inventory
      4. 600 patties used ???
   3. start asking questions
      1. Isolate the problem
      2. Resolve it and move on
   4. Toot your horn
      1. Nobody else will
      2. Over communicate
      3. Inspires confidence
4. Don’t become blind to your own mess
   1. Refresh & focus
   2. Make a custom check list wunderlist.com
      1. Scan trash cans
      2. Review prep lists
      3. Check security devices & systems
      4. Actually take inventory don’t just guesstimate orders
      5. Slow down and pay attention
      6. Be present and focused
      7. Breathe

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