Would you like to find a couple of thousand dollars that you are paying into your business that you can put in your pocket? I am sure the answer is, “yes”! Every 6 months, I make it a priority to look at many aspects of my business and see where I can save money. Every year, I have been able to find $10,000 plus of savings, just by checking a few things.
Here are some tips to help you find money in your business.
Credit card processor statement: This can be confusing as there are so many fees that are tied into a percentage and a transaction fee. I have found the best way to determine what you should be paying is to take the total fee and divide it by the monthly credit card sales. Then multiply this by 100 to get the percentage that you are charged. In the restaurant industry, the rate should not be more than 2.8%. The bowling side is usually lower. Now, many credit card processors hate to lose a customer and will drop your rate regardless of what you are getting charged to keep your business. Because we do a lot of credit card transactions, I was able to save over $300 a month in fees.
Phone bill: The phone companies are constantly dropping their prices, but they are not going to call to tell you this. It is up to you to call and see what promotions they are running. I would look at the package that includes long distance, as you should not pay per minute charges for long distance if you use long distance. Many phone companies are starting to run unlimited packages. I was able to save $25 a month just by calling and seeing if they have new promotions. In addition, you can sometimes package your Internet with your phone. Internet companies are like phone companies. They all want your business and they have lots of flexibility with price.
Compare pricing: This is a huge tip. Pull all your invoices from prior months and compare pricing from month to month. See if prices on items changed, especially your fountain drink company. Every year, I sign a contract and the company keeps changing the price from month to month. I have been able to get $2200 twice in the past year for over charges. In addition, your food provider is known for quoting a low price to get your business, then raising the price incrementally each month. I have seen some items increase over 40% in a 6 month period.
Check all recurring payments: This includes your uniform rental company that provides you with towels, your garbage pickup and anything else that you are paying each month. Make sure the prices are correct and have not been slowly increased without your knowledge.
Modify loans: Check your loans to see if you can make any modifications. Many banks will change the rates for a fee. You are usually better off changing the rates and paying the fee in bad economic times. I will usually float the rate on a variable until I see signs that the economy is making a turnaround. This alone can save you thousands a month, depending on how much your loan is and the rate you are paying.
Analyze and optimize your food costs: Proper food costing enables you to have complete control on how much you spend on food. During a set period of time, such as a few weeks or a month, you should analyze against the restaurant industry’s average food costs. Remember to include beverages in the analysis. Create a detailed report of all the food purchases that were made during this time period. Compare this to your food inventory costs. This will allow you to make adjustments for inventory and food costs, which will reduce costs to you and help you make more profitable decisions. Generally, food costs plus labor and overhead costs should account for 2/3 of a restaurant’s expenses. The rest should be what you generate in profits.
Energy audit: Contact your electric company and ask for an energy audit. They will generally do this for free. They will help you find where you can make adjustments to save money on your bill each month. Many times, they will even give you some freebies, such as light bulbs, etc.
Buy in bulk: Buying items, that don’t spoil, in bulk can save money. Join mailing lists of multiple office supply stores as they also send you lots of discounts.
These are just a few tips to get you started looking for the “hidden” money in your business. You would be amazed at how much you can save by paying attention to what you are being charged for and by simply making a few minor changes in your monthly routine.
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