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Eliminate 7 Hidden FEC Costs in Less Than a Month

Posted by Sherry Howell on Jul 24, 2019 8:00:00 AM

Maintaining an efficient family entertainment center or amusement facility is a tough balancing act, but one area that needs constant focus is cost management.

Unfortunately, thousands of dollars may still be slipping through the cracks of your business thanks to hidden costs.

Read on to discover seven hidden costs that you should eliminate in your FEC – and how to create a more profitable business in less than a month.

1. Incomplete recipe tracking

Food and beverage costs have a significant impact on your facility’s profitability, but kitchen management often falls to the bottom of your operator’s to-do list.

How is your facility tracking food inventory? It’s essential to keep a firm grasp on your ingredients in order to know if costs are in a manageable place.

Your kitchen management system should track intake of food service items and ingredients. Then, these items should be tracked in recipes, so, as your kitchen turns out guest orders, you’ll always know down to the smallest measurement both the cost of creating that item and the current quantity on hand. This will ensure that you never run out of that vital ingredient – and reduce overall waste and costs associated with that item.   

For example, the cost of your pizza and its profit margin is based on a specific amount of dough, cheese, sauce and toppings. With a complete recipe tracking and kitchen management system, you will be able to see exactly where you are losing product, whether it’s due to training issues, spoilage or even theft.

2. Inaccurate portion control

Again in the realm of kitchen management, consider how your menu items are measured.

Items like french fries and chicken tenders vary by size and weight by as much as 50% per piece. If you price your chicken tenders by the piece instead of by weight, and price for six ounces of chicken but give out nine ounces, you’re not only losing profit margin, but you’re also creating inventory discrepancies and inconsistent guest experiences.

Food scales in the kitchen are a great way to reduce costs while ensuring an accurate product. Recipe cards with pictures and regular spot checks also help ensure that you have a handle on kitchen costs.

3. Haphazard inventory tracking

Inventory checks should be done routinely, and the process should have checks and balances implemented to guarantee thorough and honest counts.

Switch up who places orders versus receives inventory and conduct miscellaneous spot check counts on varied items weekly. It’s also a good idea to use blind inventory counts, forcing your team members to count the actual amount of product without knowing how much “should” be there. This will go a long way towards ensuring you don’t have ingredients making their way out the door without your knowledge. This will also help you control inventory more efficiently while also sending the message that you are serious about tracking and accuracy.   

4. Lacking cash control processes

Lackluster cash control practices introduce several hidden costs to your business.

From accidental shortages all the way to guest or team member theft, you could be losing big if your processes aren’t transparent, trained and enforced. Be sure that team members are clear on proper cash handling, what constitutes theft, how to document shift meals and more, and make sure that you have a culture built on clear policies and well-managed expectations.

5. Unbalanced scheduling

Labor is a well-known cost to your business, and how you schedule can make a big difference in achieving an appropriate labor percentage. For example, scheduling a balance of seasoned team members with newer staff helps manage payroll costs during a shift.

Also, consider how shift-swapping happens. Do you allow team members to swap shifts with anyone they choose without supervisor oversight? If so, you could be tipping the payroll (and guest service) scales unfavorably. A balanced shift maintains costs, provides a more consistent guest service experience and gives leadership and mentoring opportunities to experienced team members while supporting newer ones.

One easy way to make sure that you have the right staff mix on shift is to identify new team members in your scheduling software so you can easily see when you have the appropriate knowledge levels covered, and you can even make note of training or shift needs.

Check out this CenterEdge Pro Tip to make scheduling easier.

6. Time clock misuse

While it may seem minor, team member clock-ins and clock-outs can be a source of payroll inflation.

Whether full- or part-time, you could be paying extra dollars in payroll if team members are clocking in too early or out too late. In accordance with local labor laws, set your time clock to round up or down as appropriate and set parameters for clocking in early or late that require a manager to override.

It’s also a good idea to routinely spot-check your time clock adjustment reports. If you start to see certain team members consistently getting time clock adjustments from the same manager(s), there could be an underlying training or management issue worth addressing.

The most important piece, however, is to clearly communicate the time clock policies to team members to reduce confusion and the need to make constant adjustments. That doesn’t mean you should turn them into time clock watchers; instead, help them learn how to use their best judgment on different scenarios. For example, you would want them to help a guest who asks them a question, even if they’re on their way to clock out.

7. Lost sales opportunities

One of the biggest hidden costs is that of lost sales opportunities.

Do your team members upsell to the best of their ability with every guest during every shift? If not, you’re missing out on revenue.

For example, I visit the same local establishment for lunch at least once a week. Over the course of my six year customer lifetime, the business has tried to upsell me with a larger drink only once – but I said yes when they did ask! Since upselling is not a part of their regular selling process, they have missed out on hundreds of dollars from me alone - how much revenue have they missed out on from their entire customer base by now?

How much is your business missing out on if upselling isn’t part of your culture?

This situation also ties into your labor percentage. When you determine your percentage is too high, do you immediately look for ways to reduce your team? This is a common response, but you may be looking at your labor costs in the wrong way.

Amusement operations expert Alan Kumpf argues that the key to achieving the right labor percentage is often found in not cutting staff when sales are down, but rather making the staff on-shift more productive –  that is, focused on selling and upselling items in your facility while boosting guest experience.

What do you think could happen in your business if, during your slow times, your team members went out onto the floor and played games with guests, invited them to learn more about your attractions or talked to guests about new menu items or specials at your facility? 

If this idea is new to your FEC, review your current analytics. Take a few minutes to analyze your labor reports or CenterEdge Business Intelligence to review your labor percentages and top items sold. Then, consider ways to boost upselling:

  • Create a new package or promotion to showcase
  • Discuss a new upselling initiative during a shift huddle
  • Implement a team member sales contest
  • Conduct an upselling techniques training session.

If you do any one of these, you should see an immediate boost in sales. Do them for a month or more, and you’ll be well on your way to building a culture of upselling, improving the sales vs. labor percentage and, in the long run, enhancing the guest experience.   

Learn how CenterEdge Software can help you manage those hidden costs and run your business efficiently and profitably by contacting info@centeredgesoftware.com.

Topics: Reporting & Analytics, Employee Management, Facility Operations