We are in the business of pennies
I have talked about restaurant math before, but in this time of inflation, it is good to stress a few more points.
First off I can’t say enough how important it is to prioritize your time in the brewery so that you get the most from your limited amount of time. For example, even if you can only spare one hour per week, it’s better to spend that time on a sales promotion rather than a less expensive paper towel for your restroom, or, adjusting employee schedules in such a way that it could save a couple hours per day in labor rather than changing the breweries fluorescent lights to efficient LED. Not that the later is not important, you will just get a bigger bang for you buck in the labor savings.
That said, let’s DO talk about the little things. This gets back to the math thing again, and I will use the simple pencil as an example.
A mechanical pencil costs only .27 each. Man, that’s cheap. However most get thrown away after the lead runs out (even though there is more lead hidden under the eraser). A number 2 pencil costs .04 each (current Target prices). If you have a cheap pencil sharpener, one pencil could last a year. So big deal, it saves .23 cents. But if your net profit is 5%, then saving even .23 equates to $4.60 in sales. In other words, you would need to sell an extra $4.60 just to net the .23 to buy the mechanical pencil instead of the number two.
Something as simple as changing out a spoon for a spatula in the prep kitchen can be worth thousands. For example every night we change out all the inserts from our pizza and salad refrigeration tables. Taking the ingredients from one pan and putting it in another using a spoon will leave plenty behind. Using a spatula gets it all. I did an experiment using a chef spoon to pour and scrape out tomato sauce into a new pan. Then I went back and using a spatula, harvested another 4 ounces. That’s enough for a pizza. In other words, enough saved sauce for 365 pizzas per year. That is only one pan out of dozens of other ingredients like salad dressing, or pesto. It all adds up.
It’s a mind set. It’s not about number 2 pencils. Running a brewery is intense. There are so many details to think about with money coming in every day, and bills being paid and sent out. Watching the little things can make a huge difference over the span of a year.
It’s not being cheap, it’s being smart. You rightfully might say, “I don’t want to live my life where I have to think about every small purchase, and does it really matter in the larger scheme of things?”. My answer is it all matters. There are millions of pennies laying on the floor through out the year. Everyday they may not mean that much, but what if you counted the pennies at the end of the year and it was enough for you and your main brewer to drive or fly to Cleveland (or Austin, Albuquerque, Miami, etc.) for a weekend to just check out breweries to see what the competition’s doing and maybe steal a few good ideas to bring back home to your brewery? Plus wouldn't that be a lot more fun than that mechanical pencil?
After you have gone through your glorious grand opening party, your first Great American Beer Festival, your first holidays, your first and second anniversary, you will be simply running your brewery everyday. This is when you really have time to focus on even the smallest details in operating your brewery. When you are watching the business in this detail, you are operating the most successful business you can. The number 2 pencil becomes a badge of honor.