UNIT- 1 COST AND SALES CONCEPT
When a company even starts manufacturing goods, it has to pay the price for the factors employed for the production. These factors include wages to workers employed, prices for the raw materials fuel and power used, rent for the building he hires, and interest on the money borrowed for doing,
It is a concept or an idea which lays emphasis on the sale of foods and services and not the underlying need or want, and it does not really matter whether the products are actually needed by the customer or not. The focus is on sales (profit) first and then on marketing. This is also called the selling concept where the sole aim is sales, and not whether the product is actually required.
For example- Life insurance policy
COST TO SALES RATIO:COST PERCENT
Selling Costs to Sales Ratio Calculation
By dividing the costs of selling to the total value of sales – and then multiplying the result by 100, you will get the ratio you were looking for. So, the formula should look like this: (Cost of selling / Total value of sales) x 100. Keeping it simple and basic is the right way to go.
Beverage Cost = Cost of alcohol sales / Total alcohol sales
The beverage sales and costs should be generated during a set accounting time period of at least two weeks or more typically, every 28 days, or monthly.
Cost percentages are useful because they allow you to compare the performance of an operation at separate times during the year or to compare two similar restaurants. They also allow you to make generalizations about types of restaurant operations.
Cost Percentage = Cost ÷ Total Sales
Food Cost Percentage = Cost Of Food ÷ Total Sales
Labour Cost Percentage = Cost Of Labour ÷ Total Sales
Overhead Cost Percentage = Cost Of Overhead ÷ Total Sales
UNIT-2 Control Process
Controlling is one of the most important functions of management. Its main objective is to ensure that an organization’s activities are advancing as planned. The control process that all managers have to implement consists of several steps. Each one of these is equally important and plays a big role in effective management.
1. Establishing goals and standards
The task of fixing goals and standards takes place while planning but it plays a big role in food & beverage control also.
2.Measuring actual performance against goals and standards
Once managers know what their goals are, they should next measure their actual performance and compare
3. Taking corrective action
In case there are discrepancies between actual performances and goals, managers need to take corrective actions immediately.
4. Following up on corrective action
Just taking corrective measures is not enough; managers must also take them to their logical conclusion. Even this step requires thorough evaluations and comparisons.
- Controlling as managers
- Inventory control
- Financial control
- Night Audit
Cost Benefit Ratio
It is a also called as BCR Benefit cost ratio.
A benefit-cost ratio (BCR) is a ratio used in a cost-benefit analysis to summarize the overall relationship between the relative costs and benefits of a proposed project. BCR can be expressed in monetary or qualitative terms. If a project has a BCR greater than 1.0, the project is expected to deliver a positive net present value to a firm and its investors.
UNIT-3 Control Cycle
The purchaser is responsible for purchasing a product. He studies the market, and analyzes and selects suppliers, wholesalers, and the contemporary market prices. He then liaisons with suppliers and wholesalers to get good material at fair price and purchases the required commodities by following appropriate purchase procedures.
Receiving the Product
The receiver receives the products from the suppliers. He checks the product for right quality and quantity. He deals with the delivery personnel from the supplier’s end and signs on the related receipts.
Storing and Issuing the Product
The store men carry out the task of storing received supply and issuing it to respective departments. They update the stock database, and manage old and new material in the stock. They also keep record of stock to the latest date.
UNIT-4 MENU ENGINEERING AND ANALYSIS
Menu engineering means balancing the high and low food cost items; it also includes strategically featuring or promoting items to help reach your targets.
A basic menu analysis determines how often each item on the menu is sold. This basic statistic can be used with cost percentages, menu prices, and sales values to make generalizations about the relative value of each menu item..
Another way of engineering the menu is by strategically arranging the items on the menu
These are all ways to attract the attention of the guests, and in most cases, you will find that it is these items that sell the best. If these items also have high contribution margins and/or low food costs, they will increase profitability. Featuring the items with the lowest margins and highest food costs will have the opposite effect, and likely mean that you will not be in business for very long.
There are also some psychological reasons that things will sell on a menu.. Using descriptions that entice the customer (e.g., “award-winning,” “house specialty”) will increase the sale of a particular item.
UNIT-5 CONTROLLING FOOD SALES
The Goals of Sales Control
1.Optimizing the number of sales
2. Maximizing profit
3. Controlling revenue
Optimizing the Number of Sales
Optimizing the number of sales means engaging in activities that will increase the number of customers to the desired level, as defined by the individual operator.
Operators can, adopt various merchandising techniques to influence the customer to select one drink (a drink with a greater contribution margin) rather than another.
In food and beverage operations, profit maximization is accomplished by:
1. Establishing prices that will maximize gross profit
2. Influencing customers’ selections
Revenue control consists of those activities established to ensure that each sale to a customer results in appropriate revenue to the operation. There are two basic approaches to recording and controlling food and beverage sales.
1. A manual system: Which is commonly used in small and in exclusive type catering units.
2. An automated system: Which is commonly used in units with several outlets, in units with a very high volume of business and in up-to-date companies with many units.
REVENUE CONTROL USING MANUAL MEANS
One of the simplest steps to take when attempting to establish sales control-procedures is to require that each item ordered and its selling price are recorded on a waiter’s sales check.Use numbered checks and control these tightly, recording all cancelled and missing checks.It is more common to find duplicate or triplicate checks being used as a better control method.They provide the kitchen, buffet, or bar with a written record of what has been ordered and issued.
The full manual control of a food and beverage operation would be costly, time consuming and data produced would frequently be far too late for meaningful management action to take place.
The day-today operational problems of a manual system are many and include such common problems as:
1. Poor handwriting by the waiting staff resulting in:
- Incorrect order given to the kitchen or dispense bar
- Wrong food being offered to the customer.
- Incorrect prices being charged to the customer.
- Poorly presented bill for the customer, etc.
2. Human error can produce such mistakes as:
- Incorrect prices charged to items on a bill
- Incorrect additions to a customer’s bill
- Incorrect service charge made
- Incorrect government tax (for example VAT) charge made.
3. The communication between departments such as the restaurant, dispense bar, kitchen and cashiers has to be done physically by the waiting staff going to the various departments. This is not only time consuming but inefficient.
4. Manual systems do not provide any quick management information data, any data produced at best being normally 24-28 hours old, as well as being costly to produce.
5. Manual systems have to be restricted to the bare essentials because of the high cost of labour that would be involved in providing detailed up-to-date information.
REVENUE CONTROL USING COMPUTERS
Pre-check machines are somewhat similar in appearance to a standard cash register and are designed to operate only when a sales check is inserted into the printing table to the side of the machine.
The machine is operated in the following way.
1. A waiter has his/ her own machine key.
2. A check is inserted into the printing table and the particular keys, depending on the order taken, are pressed giving an item and price record as well as recording the table number, the number of covers and the waiter’s reference number.
3. A duplicate is printed and issued by the machine which is then issued as the duplicate check to obtain food and/or beverages.
4. For each transaction a reference number is given on the sales check and the duplicate.
5. All data is recorded on a continuous audit tape that can be removed only by authorized persons at the end of the day when the machine is cleared and total sales taken and compared to actual cash received.
Pre-set Pre-checking System
This is an up-date on the basic pre-check machine. The keyboard is much larger than the previous machines, and has descriptive keys corresponding to all items on the menu which are pre-set to the current price of each item. A waiter pressing the key for, say one cheeseburger would not only have the item printed out but also the price. A control panel, kept under lock and key, would enable management to change the price of any item if required, very quickly. It is also possible to have a running count kept of each item recorded and at the end of a meal period by depressing each key in turn to get a print out giving a basic analysis of sales made.
Electronic Cash Registers (ECR’s)
These are very high speed machines which were developed mainly for operations such as super- markets and were further adapted for use in high volume catering operations. The particular advantages of these machines are that they will:
1. Price customers’ checks through preset or by price look-ups.
2. Print checks, including the printing of previously entered items.
3. Have an additional special key-so that the pre-set price can be changed during promotional periods such as a ‘happy hour’ in a bar.
4. Provide an analysis of sales made by type of product and if required by hour (or other similar period) of trading
5. Provide an analysis of sales by waiter per hour or per shift period.
6. Analyze sales by method of payment for example, cash, cheque, type of credit card, etc.
7. Complete automatic tax calculations and cover and service changes.
8. Provide some limited stock control.
9. Provide waiter check-in and checking out facilities.
10. Provide facilities for operator training to take place on the machine without disrupting any information already in the ECR.
Point-of-Sale Control Systems
At a basic level a point-of-sale control system is no more than a modern ECR with the additional feature of one or several printers at such locations as the kitchen (or sections of the kitchen) or dispense bar. Some systems replace the ECR with a ‘server terminal’ (also called ’waiter communication’ systems), which may be placed at several locations within a restaurant, and is a modification of an ECR in that the cash features are eliminated making the terminal relatively small and inconspicuous.
The objectives for having printers are:
1. To provide an instant and separate clear and printed order to kitchen or bar, of what is required and by and for whom.
2. To speed up the process of giving the order to the kitchen or bar.
3. To aid control, in that items can only be ordered when they have been entered into the ECR or terminal by an identifiable member of the waiting staff and printed.
4. To reduced the time taken by the waiter in walking to the kitchen or bar to place an order and, as frequently happens, to check if an order is ready for collection.
5. To afford more times, if required, for customer contact.
Printers are at times replaced by VDU screens. Server terminals are part of a computer-based point-of-sale system. These special terminals are linked to other server terminals in the restaurants and bars within one system and, if required to, also interface with other systems so that, for example, the transfer of restaurant and bar charges may be made via the front office computer system. The advantage of a computerized point-of-sale system is that it is capable of processing data as activities occur, which makes it possible to obtain up-to-the minute reports for management who can be better informed and able to take immediate and accurate corrective action if necessary.
This type of point-of-sale control system has been taken one step further with the introduction of hand-held terminals. Remanco’s electronic server pas (ESP), for example, is a palm-size unit which uses radio frequencies to communicate from the guest’s table direct to the kitchen and bar preparation areas. The use of such a terminal offers a number of advantages: food and beverage orders are delivered faster and more efficiently to preparation sites; waiters in turn can attend more tables; with a two-way communication service staff can be notified if an item is out of stock; all food and beverage items ordered are immediately charged to the guest’s bill, which is accurate and easy to read; finally, operations can reassess their labour utilization and efficiency, certain members of the service staff, for example, can take the simple order, while others can spend more time with customers to increase food and beverage sales.
The ESP is a completely noiseless terminal with orders being entered alphabetically, numerically or by using pre-set codes. When not being used and the unit is closed, its design resembles a conventional order pad, compact and light in weight that can easily be carried around by service staff. It is currently being utilized in a variety of situations, including restaurants.
UNIT – 6 BEVERAGE CONTROL
The primary goal of receiving control is to ensure that deliveries received conform exactly to orders placed. In practice, this means that beverage deliveries must be compared with beverage orders in regard to quantity, quality, and price. The standards established for receiving are quite simple.
1. The quantity of an item delivered must equal the quantity ordered.
2. The quality of an item delivered must the same as the quality ordered. For all spirits, wines, and beers, one would check to be certain that the brand delivered was the same as the brand ordered. For wines, verification may also require checking vintages or the bottling dates of wines that are best when young. For beers, it may require checking bottling or canning dates to ascertain freshness.
3. The price on the invoice for each item delivered should be the same as the price quoted or listed when the order was placed.
Establishing Standard Procedures
Standard procedures must always be established to ensure that standards will be met. The steps identified in the following list are generally considered those that make up a basic standard procedure for receiving beverages.
1. Maintain an up-to-date file of all beverage orders placed.
2. Remove the record of the order from the file when a delivery arrives and compare it with the invoice presented by the delivery driver to verify that quantities, qualities, and prices on the invoice conform to the order. the picture illustrates a typical beverage invoice.
3. Complete the following before the delivery driver leaves the premises.
a. Check brands, dates, or both, as appropriate, to verify that the quality of beverages delivered conforms to the invoice.
b. Count or weigh goods delivered to verify that the quantity received also conforms to the invoice.
4. Compare the invoice with the order to verify that goods received conform to the order placed.
5. Call to the attention of both management and the delivery driver:
a. Any broken or leaking containers
b. Any bottles with broken seals or missing labels
6. Note all discrepancies between delivered goods and the invoice on the invoice itself. Call any discrepancy between an order and the delivery to management’s attention immediately. Any such discrepancy may require a decision from management as to whether to accept delivery of the questionable items.
7. Sign the original invoice to acknowledge receipt of the goods, and return the signed copy to the driver. Retain the duplicate copy for internal record keeping.
8. Record the invoice on the beverage receiving report.
9. Notify the person responsible for storing beverages that a delivery has been received.
In many establishments, a form known as a beverage receiving report is filled out daily by the individual responsible for receiving beverages. A basic beverage receiving report is illustrated in the picture
|beverage receiving report
Storing control is established in beverage operations to achieve three important objectives:
1. To prevent pilferage
2. To ensure accessibility when needed
3. To preserve quality
To accomplish these objectives, standards must be established.
The following standards are critical to effective storing control:
1. To prevent pilferage, it is clearly necessary to make all beverage storage areas secure. To establish the proper degree of security, access to storage areas must be restricted to authorized individuals, and steps must be taken to guard against unauthorized use of beverages by those who are permitted access to the storage areas.
2. To ensure accessibility of products when needed, the storage facility must be organized so that each individual brand and product can be found quickly.
3. To maintain product quality, each item in the beverage inventory must be stored appropriately, under conditions that will maximize its shelf life. This requires taking into account such important elements as temperature, humidity, and the manner in which items are stored.
Establishing Standard Procedures
Standard procedures must always be established to ensure that standards will be met. The standard procedures required to achieve control over the storing of beverages normally include those discussed in the following paragraphs.
Procedures to Make Beverage Areas Secure
Because beverage products are prone to theft, it should be obvious that keeping them in a secure facility is an urgent requirement.
There are two ways to maintain the necessary degree of security. The first is to assign responsibility for the security of the stored items to one person alone. This responsibility can mean literally keeping watch over these items.
The second way to maintain security is to keep the beverage storage facility locked and to issue a single key to one person, who will be held accountable for all beverages in the inventory. The person with the key is required to open the lock and issue the needed beverages.
Some hotels and large restaurants take the additional precaution of installing closed-circuit television cameras to keep various facilities and their entrances under observation, such as the doors to beverage storage areas. A security guard in a remote area is responsible for monitoring traffic into and out of the area on a television screen.
Another means of monitoring is to install special locks that print on paper tape the times at which the doors on which they are installed are unlocked and relocked. The times printed on the tape inform management exactly when the door to a facility was unlocked and how long it remained so.
Procedures to Organize the Beverage Storage Facility
Ensuring accessibility means storing beverage products in an organized manner, so that each stored item is always kept in the same place and thus can be found quickly when needed. The physical arrangement of a storage area is important. Similar items should be kept close to one another. All gins, for example, should be kept in one area, rye whiskies in another, and scotch whiskies in a third. This kind of arrangement simplifies finding an item when needed. It is helpful, too, for a floor plan of the storage area to be affixed to the door of the facility so that authorized personnel can easily locate items.
Bin cards can be affixed to shelves and serve as shelf labels. When properly used, bin cards include essential information (type of beverage, brand name, and bottle size, for example). They may also include an identification number for beverages. Some establishments assign a code number from a master list to each item in the beverage inventory and record that code number on the bin card.
bin card picture
|beverage code numbers
In many establishments, indelible ink is used to stamp this code number on each bottle received. This technique serves several purposes. In the case of wines, the names of which can be difficult to pronounce and spell, code numbers eliminate the problems faced by customers ordering wines and employees seeking to fill the orders. In many instances, wine lists are printed with bin numbers. This can lead to an increase in wine sales, which can be highly profitable. Stamping code numbers on bottles of alcoholic beverages also provides an added measure of control: The stamped number on a bottle identifies that bottle as the property of the hotel or restaurant. This makes it impossible for an employee to claim that such a bottle is personal property if one is found in his or her possession. In addition, empty bottles can be checked for numbers before they are replaced by full bottles, thus ensuring that no one is bringing empty bottles into the establishment and using them to obtain full bottles from the establishment’s inventory.
The use of bin cards also enables a wine steward to maintain a perpetual inventory record of quantities on hand. By using this card carefully to record the number of units received as they are placed on the shelves, as well as the number of units issued as they are given out, the wine steward has a way of determining the balance on hand without counting bottles. In addition, the wine steward who carefully maintains such records has a way of determining that bottles are missing so that this can be brought to management’s attention immediately.
Procedures to Maximize Shelf Life of Stored Beverages
Procedures for maximizing the shelf life of stored beverages may be divided into two categories:
1. Those dealing with temperature, humidity, and light in the storage facilities
2. Those dealing with the manner in which bottles and other containers are handled and shelved
Temperature, Humidity, and Light in Storage Facilities. For every beverage product, there is a temperature range appropriate for storage that will tend to preserve quality and shelf life. For some, the range is extremely broad; for others, it is very limited. Spirits, for example, can be stored indefinitely at normal room temperatures without harming product quality. If necessary, they can be stored well above or well below room temperatures for considerable periods. As long as the storage temperature does not become extreme, they will not suffer loss of quality. In contrast, carefully controlled storage temperatures are critical for maintaining the quality of beers and wines. The problem of maintaining product quality for these items is complicated by the fact that various wines and beers require different treatments, depending on how they were made and the containers in which they are purchased.
It is normally advisable to learn from the maker,brewer, or distributor of each specific brand the temperature range recommended for the proper storage of the product.
Shelving and Handling Bottles and Other Containers. Spirits can be stored upright on horizontal shelves for unlimited periods. In contrast, wines and other corked beverages cannot safely be stored in an upright position. If they are to be kept for any length of time, they must be stored on their sides, parallel to the floor.
There are special racks designed to store wines in the proper position. In this horizontal position, the beverage in the bottle is kept in constant contact with the cork, helping to keep the cork moist and thus keeping the bottle tightly sealed.
Issuing control is established in hotel and restaurant beverage operations to achieve two important objectives:
1. To ensure the timely release of beverages from inventory in the needed quantities
2. To prevent the misuse of alcoholic beverages between release from inventory and delivery to the bar
To achieve these objectives, managers must establish two essential standards for issuing beverages:
1. Issue quantities must be carefully set.
2. Beverages must be issued only to authorized persons.
“Authorized persons” means those who have been assigned responsibility for the security of the issued beverages and will be held accountable for their disposition.
Establishing Standard Procedures
To ensure that the essential issuing standards identified previously will be met, it is necessary to establish appropriate standard procedures for issuing beverages:
1. Establishing par stocks for bars
2. Setting up a requisition system
Establishing Par Stocks for Bars
As used in bar operations, the meaning of the term par stock is somewhat different from the definition used in wine cellar or liquor storeroom operations. In storeroom operations, par stock means the maximum quantity that may be on hand at any one time; it is a limit that the quantity on hand should never exceed. In bar operations, on the other hand, par stock is the precise quantity, stated in numbers of bottles or other containers, that must be on hand at all times for each beverage at the bar. For example, the stock of gin at a bar should be listed by brand name with bottle size and an exact number of bottles that should be at the bar at all times. One particular brand of gin, stocked in 750 ml bottles, may have a par stock of five bottles at a certain bar. This implies that someone can check the stock at any time and expect to find five bottles of that particular brand on hand. Not all would necessarily be full, but at least the number of bottles would be under control.
Essentially, there are three kinds of bars:
1. Front bars, where bartenders serve the public face-to-face
2. Service bars, where customers’ orders are given to the bartender by the waitstaff, who serve the drinks to the customers
3. Special-purpose bars, usually set up for particular events, such as a banquet.
Par stocks vary greatly from one establishment to another. In every case, however, the par stock for any particular beverage should be related to quantities used and should be changed from time to time as customer demand changes. Drinks may go in and out of fashion for seasonal as well as for other reasons, and par stocks at the bar should be adjusted to meet customer demand without being overstocked. In addition, since storage space at a bar is limited, the quantity of any item should be limited to the amount necessary to meet no more than two to three days’ demand.
Setting Up a Requisition System
A requisition system is a highly structured method for controlling issues. In beverage control, a key element in the system is the bar requisition form, on which both the names of beverages and the quantities of each issued are recorded. No bottles should ever be issued without a written requisition signed by an authorized person, often the head bartender. A simple requisition form is illustrated in Figure 14.5. In the majority of beverage operations, one type of requisition form is normally sufficient for maintaining the desired degree of control over issues. In more complex beverage operations, such as those found in many hotels, several kinds of requisitions may be required for specialized bars.
The requisition form is filled out by either a head bartender or another authorized person who determines the quantities needed at the bar to replenish the par stock. For a special-purpose bar, the quantities are those established as the par stock for the specific occasion. The signed and dated requisition is given to a wine steward or beverage storeroom clerk—jobs and titles vary from one operation to another. This individual is responsible for obtaining the listed items and quantities from inventory shelves and issuing them to the person authorized to receive them—normally the person who has signed the requisition. In some establishments, the worker who receives the beverages is required to sign the requisition to acknowledge receipt of all listed items.
Later, after the beverages have been issued, the unit value of each beverage is entered on the requisition, and these individual values are extended. This means that each unit value is multiplied by the number of units issued to determine the total value of the quantity issued. A total value is obtained for all the beverages listed on the requisition by adding the total values of the individual items.
The majority of establishments take the further precaution of requiring that each requisition from a front bar or a service bar be accompanied by empty bottles from that bar, to ensure that the units issued are actually replacing quantities the bartender has used. When this system is used, a par stock can be maintained at the bar. For example, suppose that the par stock of a particular brand of scotch is five bottles. When one bottle is emptied, the bartender puts it aside. At the end of the night, the bartender lists it on a requisition form along with all other bottles emptied in the course of the evening. This form is left for the morning bartender, who takes all empty bottles and the requisition on which they are listed to the wine steward. The wine steward checks each bottle against the requisition and then sends full bottles of those items— including that particular scotch—to the bar before the beginning of business. This brings the stock of the bar—including the scotch—back up to par. Such a system ensures a constant supply of beverages at the bar. Occasional comparisons of numbers of bottlesat the bar with the par stock list can ensure that items are not missing from the bar. This affords an additional measure of control.
Establishments that operate more than one bar must prepare separate requisitions for each, so the various bars may be controlled separately. For example, special banquet requisitions are often used that make provision for all bottles issued, whether consumed or returned.
|banquet bar requisition
many establishments maintain additional control over full-bottle sales by requiring that a full-bottle sales slip be filled out each time a bottle of wine is removed from the bar for service at a table.
|full bottle sales slip
BEVERAGE PRODUCTION CONTROL
Objectives of Beverage Production Control
Control over beverage production is established to achieve two primary objectives:
1. To ensure that all drinks are prepared according to management’s specifications
2. To guard against excessive costs that can develop in the production process
Specifications for drink production must take into account both the tastes of expected customers and management’s desire to prepare drinks of appropriate quality and size. After all, customers who order drinks commonly have preconceived ideas of how the drinks will taste.
Establishing Standards and Standard Procedures for Production
Standards must be established for the quantities of ingredients used in drink preparation, as well as for the proportions of ingredients in a drink. In addition, drink sizes must be standardized.
When standards are set for ingredients, proportions, and drink sizes, customers can have some reasonable assurance that a drink will meet expectations each time it is ordered. Once these standards have been established and procedures have been developed for training employees to follow them, they can be adhered to even in the face of a high rate of employee turnover.
By establishing and maintaining these standards, managers also establish a means for controlling costs.
Establishing Quantity Standards and Standard Procedures
The quantities used by the bartender must be controlled. To do so, one must determine in advance the specific quantities to be used for the production
of drinks and then provide the bartender with a means of measuring those quantities.
Devices for Measuring Standard Quantities
There are four measuring devices commonly used by bartenders:
In some establishments, bartenders are provided with small glasses, called shot glasses, that are used for measuring. There are two kinds of shot glasses:
A jigger is a double-ended stainless steel measuring device, each end of which resembles a shot glass. The two measuring devices that make up the jigger are of different sizes—one may hold 1 ounce and the other 11/2 ounces. Many believe the jigger is necessary for the accurate measuring that ensures perfect cocktails.It can be used for measuring straight shots as well, but is more useful for preparing cocktails that call for varying quantities of ingredients. For measuring the ingredients required for these complex drinks, shot glasses are inappropriate. Some cocktails call for such varied measures as 1 ounce of one ingredient and 11/2 ounces of a second. To measure exact quantities of each ingredient, it is necessary to use the jigger.
A pourer is a device, fitted on top of a bottle, that measures the quantity poured from the bottle, limiting that quantity to a predetermined amount. This is another way to control the quantity of liquor used in preparing drinks. A number of different types of pourers are available, but all operate on the principle of controlling the quantity poured each time a bottle is used. In an
establishment where 1 ounce is the standard measure, all bottles can be fitted with devices that dispense just 1 ounce. Each time the bartender tips the bottle to pour, exactly 1 ounce is dispensed. The psychological effect, if any, of these pouring devices is widely disputed. Some think that the customer is given the illusion of the bartender pouring freely; others argue that customers may feel a certain resentment toward an establishment that neither trusts the bartender nor permits an extra drop to be dispensed to a customer. Still others believe that pourers are useful at service bars, which customers never see, but should not be used at front bars, where customers watch bartenders mixing drinks.
THE AUTOMATED DISPENSER
Many companies have developed and successfully marketed various automated devices for dispensing predetermined measures of liquor. These range from comparatively simple systems for controlling only the pouring brands to
elaborate electronic control systems that not only control ounces but also mix drinks at the push of a button. These systems, costing many thousands of dollars, are usually linked to cash registers in such a way that each sale is recorded on a guest check as the drink is prepared. In addition, meters record the quantities used, and this makes accurate inventory control possible. Many believe that these
systems are best used in settings where bartenders have little or no direct supervision. Others think that such systems should be used in service bars but never at front bars, except in cases where repeat customers are rare, as in an airport bar.
Another means of measuring quantity is to allow bartenders to free pour. This is a method by which bartenders pour without using any device to measure quantity other than their own judgment or eyesight. In some cases, bartenders are taught to count silently to measure the duration of the act of pouring, which is clearly related
to the quantity dispensed. More often than not, however, managers are relying on the experienced bartender to use that experience to gauge the quantities poured. Free pouring is very common.
It is usually defended on the grounds that bartenders can prepare drinks at a faster rate by free pouring than they can with any of the measuring devices available.
In addition to controlling the quantity of liquor used in preparing each drink, it is desirable to control the overall size of the drinks. Standardizing the glassware used for service makes this comparatively simple. It is the manager’s responsibility to establish the standard portion size for each type of drink and to provide bartenders with appropriate glassware.
Establishing Quality Standards and Standard Procedures
It should be clear that to control costs, one must establish control over the ingredients that go into each drink, as well as over the proportions of the ingredients to one another. In other words, standard drink recipes must be established so that bar personnel will know the exact quantity of each ingredient to use in order to produce any given drink.
Generally speaking, bartenders prepare and serve two kinds of drinks that require liquor: straight shots with mixers, such as the gin and tonic, and mixed drinks or cocktails, many of which involve a number of ingredients that must be combined in a specific way for the drink to be right.
With mixed drinks and cocktails, establishing control over ingredients, proportions, and cost while providing drinks that are consistently the same is somewhat more complex. There are normally two or more recipes for making any given cocktail, and the resulting cocktails are often quite different from one another. For example, the two recipes that follow for a cocktail known as a Manhattan have been taken from two different drink mixing guides.
21/2 oz. blended rye whiskey
3/4 oz. sweet vermouth
Dash of bitters
11/2 oz. blended rye whiskey
3/4 oz. sweet vermouth
Dash of bitters
Although mixing the listed ingredients in the prescribed manner will produce a Manhattan cocktail in either case, there are substantial differences between two. In cocktail #1, the ratio of whiskey to vermouth is more than 3 to 1; in #2, it is 2 to 1. In addition, recipe #1 produces a drink that is 1 ounce larger than that produced by recipe #2. Finally, recipe #1 costs more to make because it contains 1 additional ounce of blended rye whiskey.
Establishing Standard Portion Costs
The cost of straight drinks, served with or without mixers, can be determined by first dividing the standard portion size in ounces into the number of ounces in the bottle to find the number of standard drinks contained in each bottle. This number is then divided into the cost of the bottle to find the standard cost of the drink.
With the introduction of the metric system for beverage packaging, it has become necessary to convert the metric contents of bottles into their ounce equivalents. A conversion table is presented in Figure 15.4.
For example, the standard portion size for the pouring brand of scotch in the Broadway Bar is 1.5 ounces. The bar uses 750 ml bottles of scotch. Figure 15.4 indicates that a 750 ml bottle contains 25.4 ounces. Dividing the 1.5 ounce standard drink into the 25.4 ounces in the 750 ml bottle, one determines that each bottle contains 16.9 drinks, rounded to the nearest tenth.
________ =16.9 drinks
Because there is a small amount of spillage and evaporation in all bar operations, this can be safely adjusted to an average of 16.5 drinks per bottle. If the purchase price of the bottle is $13.85, then the standard cost of each of the 16.5 drinks it contains can be determined by dividing the bottle cost, $13.85, by the number of drinks it contains, 16.5.
________ =$.839, or $.84 rounded to the nearest cent
This bar would normally offer a number of call brands of scotch as well, and the same technique would be used to determine the standard cost of one standard drink of each call brand. For a premium scotch costing $18.15 per 750 ml. bottle, the standard cost of each drink is somewhat higher.
________ = $1.10
An alternative procedure for finding the standard cost per drink requires that one divide the cost of the bottle by the number of ounces it contains to find the cost per ounce and then multiply the ounce cost by the standard drink size. For example, if the pouring brand of gin costs $16.90 per liter, the equivalent of 33.8 ounces, each ounce would cost $.50.
________ = $.50
This ounce cost, multiplied by the standard 1.5 ounce drink size for gin in the Broadway Bar, yields a standard cost for the standard measure of $.75, as indicated in the following equation: 1.5 ounce standard size $.50 per ounce $.75 per drink Some who use this method prefer to subtract 1 ounce from the true number of ounces contained in a bottle to allow for evaporation and spillage. Using this approach, one would treat a 750 ml bottle as 24.4 ounces, and a 1 liter bottle as 32.8 ounces.
Mixed Drinks and Cocktails
It is particularly important to determine the standard costs of cocktails and other mixed drinks. These drinks, typically prepared from standard recipes, normally have several ingredients and may require two or more alcoholic beverages. Consequently, mixed drinks are usually more expensive to make than straight drinks. Knowledge of the cost per drink is important for making intelligent pricing decisions.
To simplify the task of determining standard costs of cocktails and other mixed drinks and maintaining records of the calculations, many bar managers obtain supplies of recipe details and cost forms.
Establishing Standard Sales Prices
It is absolutely essential in any bar operation that the sales price be standardized for each drink sold, for straight drinks as well as for cocktails and other mixed drinks. When sales prices are standardized, customers can be properly charged for the drinks they order and the prices will not vary from day to day. The possibilities for customer satisfaction are increased: The customer who has been charged $3.50 for a particular drink on Tuesday has reasonable assurance that an identical charge will be made for the same drink on Wednesday. In some places, a list of standardized drink prices can be found posted on a sign over the bar. In others, they may be printed in the menu. These signs and menus eliminate many possible arguments over drink prices.
Perhaps the most important purpose behind the standardization of sales prices is to maintain a planned cost-to-sales ratio for each drink.
It is the responsibility of the Director of Food and Beverage and the Executive Chef to maintain adherence to established turnover and inventory level goals.
- To establish a standard for food inventory levels.
- To provide guidelines for controlling capital invested in food inventories.
- To detail the methods for calculating and determining turnover
STANDARD INVENTORY CONTROL AVERAGE
2.8 times per accounting period, or an equivalent of ten days inventory on hand. This is a total average turnover figure for the entire food inventory.
HOW TO CALCULATE INVENTORY CONTROL
Food Inventory Turnover Ratio = Consumption / Average Inventory
Consumption = Beginning Inventory + Purchases – Ending
Average Inventory = [Beginning Inventory + Ending Inventory] / 2
BEVERAGE SALES CONTROL
The Objectives of Beverage Sales Control
1. Optimizing the number of sales
2. Maximizing profit
3. Controlling revenue
Optimizing the number of sales
Possible reasons for a customer to decide to patronize bars and restaurants that serve alcoholic beverages:
2. Conducting business
4. Seeking entertainment
5. Killing time
Understanding the real reason of patronizing a bar by a customer can optimize sale.
Beverage operators can,adopt various merchandising techniques to influence the customer to select one drink (a drink with a greater contribution margin) rather than another.
In beverage operations, profit maximization is accomplished by:
1. Establishing drink prices that will maximize gross profit
2. Influencing customers’ selections
Establishing Drink Prices
Unlike food sales prices, drink prices are not primarily determined by the costs of ingredients and labor. Beverage ingredient costs and labor costs per dollar sale are both significantly lower than those for food, so they are not as important in establishing sales prices.
This is not to say that labor costs can or should be wholly ignored; in fact, many operators tend to charge more for drinks that require more labor to produce. However, the ingredient and labor costs associated with a particular drink tend to be similar from one operation to another. Other considerations are of greater importance in establishing drink prices. These include overhead costs (occupancy,
insurance, licenses, and entertainment, to name a few) and significant market considerations.
Establishments that offer live entertainment must either charge drink prices that are high enough to cover these costs or cover the cost of entertainment in some other way. There are also market considerations that must be taken into account before setting sales prices for drinks. Chief among these is the clientele targeted.
Many operators rely heavily on regular customers—those who patronize an establishment frequently, often because they live or work close by. Such customers tend to be concerned with the prices charged, and operators serving this kind of clientele are usually careful to charge prices their customers consider reasonable and to avoid price increases unless absolutely necessary.
Other market considerations that a beverage operator must take into account in establishing drink prices include average income in the area served, prices charged by the competition, special advantages offered by a specific location (such as the top floor of the city’s tallest building), and even a manager’s desire to maintain exclusivity through pricing, among others.
No discussion of drink prices can be concluded without a consideration of pricing differences between call brands and pouring brands. Call brands, selected by the customer, are normally considered to be of higher quality. They are typically of higher cost. It is therefore logical that they are given higher sales prices. Pouring brands, selected by the bar operator for the customer who expresses
no preference, are commonly of somewhat lower quality, less costly, and are therefore given lower sales prices. In general, the contribution margins of drinks made with pouring brands are likely to be lower than those of drinks made with call brands. Although it is to the operator’s advantage for customers to request
specific call brands, most customers do not.
Influencing Customer Selections
As with food products, contribution margins for beverage products vary greatly from one drink to another. For the bar operator, it is obviously desirable to sell more drinks with high contribution margins and fewer drinks with low contribution margins. If a customer is having difficulty deciding which of two drinks to order, it is clearly to the bar operator’s advantage for the customer to select the one
with the higher contribution margin. In fact, under these circumstances, a bar operator may want the employees to help the customer make a decision in favor of the drink with the higher contribution margin.
Some bar operators attempt to maximize profits by featuring and promoting selected drinks, often drinks specially created for the purpose. These drinks may be given enticing names, be served in unusual ways (in hollowed fruits or with exotic garnishes, for example), or be made from unusual combinations of ingredients.
These special drinks are normally sold for higher-than-average prices, and they normally have higher-than-average contribution margins.
Another technique for influencing customer selections is to produce a carefully designed beverage menu that includes pictures (color photographs or artists’ drawings) of the drinks that management would prefer to sell, along with appropriate descriptive language to entice customers. Customers’ orders would not necessarily be restricted to the listed drinks, but the drink menu would
include only those drinks management prefers to sell.
Revenue control consists of those activities established to ensure that each sale to a customer results in appropriate revenue to the operation. In beverage operations, the opportunities for revenue control are often somewhat limited. In general, effective control procedures in business are likely to depend on division of work among several employees, but the possibilities for dividing work in this way do not exist in most bars. In many, one employee—the bartender— is responsible for virtually all of the work: taking orders from customers, filling those orders, recording the sales, and collecting cash or obtaining signatures on charge vouchers. This dependence on one individual tends to minimize the possibilities for instituting and maintaining control. In addition, it often sets the stage for the development of a number of control problems.
A common means for determining whether control problems exist in a particular establishment is to assess the work practices of the bartender. Most of those in the following list are considered unacceptable in most well-managed bars because the owners or managers are aware of the kinds of control problems that are likely to develop.
1. Working with the cash drawer open. This practice makes it possible for dishonest employees to make sales transactions without recording the sales in the register. This is a serious problem if the bartender is held responsible at the end of the shift for only those sales recorded on the register tape.
2. Underringing sales, either as “No Sale” or as an amount less than the actual sale. Doing so enables an employee to steal the difference between the cash in the register drawer and the sales recorded on the tape.
3. Overcharging customers, but ringing correct amounts in the register. This too provides a dishonest employee with a source of cash equal to the difference between the amounts collected and amounts recorded in the register.
4. Undercharging customers. This may be done to accommodate a bartender’s personal friends or to increase tips.
It may be done in various ways, such as by using call brands but charging for pouring brands, or by overpouring.
5. Overpouring. Giving customers more than they pay for, often through failure to measure, typically results in unfavorable cost-to-sales ratios and in reduced profits from operation.
6. Underpouring. This technique is sometimes adopted by bartenders who selectively overpour. If they overpour for some customers (those who tip well, for example), they may be able to avoid being detected by underpouring for
others. One may offset the other. Moreover, the bartender who keeps track of the extent of underpouring may later use the reserved amounts to prepare drinks. These drinks may then be given to friends or sold to customers, with the sales revenue going to the bartender rather than to the bar.
7. Diluting bottle contents. This practice involves pouring out some of a bottle’s contents to reserve for later use and replacing it with an equal amount of water. The liquor poured out and reserved is typically used later to make drinks that are sold to customers. However, the revenue for those drinks goes directly to the bartender’s pocket rather than to bar revenue.
8. Bringing one’s own bottle into the bar. This practice enables a bartender to become a “silent partner” in the bar operation. The bartender can prepare drinks using his or her own liquor and take the sales revenue without his or her
performance being detected through changes in the figures used to monitor bar operations.
9. Charging for drinks not served. By charging a customer or a group of customers for drinks that were never served, a bartender can then serve equivalent drinks to other customers and steal the sales revenue.
10. Drinking on the job. In addition to the unprofessional appearance and performance this practice is likely to cause, an employee who is drinking is more likely to make mistakes in pouring, mixing, and recording sales than one who does not drink on the job.
Guest Checks and Control
Bars Without Guest Checks
Many bars, especially small,owner-bartenders require each customer to pay for each drink as it is served; others serve customers more than one drink without requiring payment and somehow remember what each customer has consumed. Cash is collected after each customer has finished his or her last drink.
Bars Using Guest Checks
A standard procedure is established that requires that all drink orders be recorded on numbered checks.
Guest checks are used in a variety of ways. Two
of the most common are:
1. Pre-check systems
2. Automated systems
A pre-check system incorporates at least one register that enables bartenders to record sales as drinks are served and to accumulate the sales to any one customer on one check.
An automated bar is both an electronic sales terminal and a computerized dispensing device for beverages. The dispensing device is controlled by the sales terminal. Bottles are inverted, with flexible tubing connecting the bottles to the dispensing device.
UNIT-7 LABOUR CONTROL
Labour Cost includes the expenses incurred in maintaining the restaurant staff. It also consists of the taxes incurred on the payrolls of the employees.
Establishing Performance Requirements:
- They are the observable behaviors and actions which explain how job is to be done, plus the results that are expected for satisfactory job performance.
- They tell the employee what a good job looks like.
- The purpose of performance standards is to communicate expectations
- Restaurant SOP should include step-by-step instructions for:
- Equipment handling and maintenance
- Safety measures
- Food preparation and handling
- Menu creation
- Guests service standards
- Food presentation
- Food storage
- Health and hygiene regulations
- Take-out and delivery standards
- Front-of-the-house greeting and seating
- Order taking and service
- Billing and final settlement
- Guests complaint management
Every restaurant is different and the number of staff you’ll need will vary depending on your service, location and the type of restaurant you have. Nevertheless there are some general statistics that can often come in useful.
A self-service restaurant: Demands on staff are lower for a self-service restaurant as food isn’t being cooked to order and plates aren’t being delivered to tables. Typical numbers might be 1 server, per shift, for every 12 tables and 4 back of house staff for every 50 customers across the same time period.
Seated but casual dining: Customers expect more in the way of service if they’re not helping themselves and you’ll need more staff per customers to make sure that you keep up with the logistics of orders and clearing. One server for 5 – 6 tables per shift and 4 back of house staff per 50 tables is a balance that can work quite well.
Fine dining: When you’re offering fine dining then you need to be far more attentive with more servers out front and more staff in the kitchen. One server for every 3-4 tables per shift and 6-7 back of house staff per 50 customers can be a good ratio.
Remember that in addition to the staff who make the service work you may also need cleaners, a sommelier, a maître d’hotel, a cashier and various different types of chef depending on your establishment. The more high-end the offering, the more people you need to employ to make the whole experience feel effortlessly enjoyable for the customer.
A job description summarizes the essential responsibilities, activities, qualifications and skills for a role. .
A job description should include important organisation details — company mission, culture and any benefits it provides to employees. It may also specify to whom the position reports and salary range.
An effective job description will provide enough detail for candidates to determine if they’re qualified for the position.
Many hospitality workers start in entry-level positions and work their way up into higher level jobs. When a company takes the time to train people, it is easier to recognize the talent that can be developed for higher management positions.
Training for the hospitality industry is diverse. Basic skills include communication and ways to interact with the hotel guests. It also involves teamwork training and diversity training, because the staff is perceived as one unit by guests. Learning to work together with people from different backgrounds is essential since staff never know what the background of any specific guest will be. Yet the guest experience needs to be the same for everyone.
Monitoring employees in the workplace is an important part of a manager’s day-to-day schedule.
It’s completely inefficient to assign work and assume it will get done exactly as you expect it to without ever checking in with your employees.
The final step in the control process is determining the need for corrective action. Managers can choose among three courses of action.