How much could improve your costs and what are you doing to achieve it?

[bodegahwy]

A periodic discipline that I need to get back to… the pendulum of what I am paying attention to swings away from things that are running fine… and in time these things stray. Why? training, attention, intent, turnover, boredom… who knows?

I need my COGS sold to come down by at least 2 points.
I need labor to come down by $200 per pay period.
I need my utilities to come down by $40 per month.
I need my insurance costs (all kinds combined) to come down by $1000 per year.
I need to cut $8000 from marketing and then redeploy $6000 of that for a savings of $2000.
I need coupon “expense” to come down by 4 points.

Each one of those goals has different solutions. Each of them are things I have accomplished before.

Getting started:

1. Started buying boxes and other paper goods from a specialty supplier. Saving about 8 cents per box. Going to jump on training and measuring program with manager.
2. Clock in and clock out times… getting assistant managers to send crew home when rush is over. Correct scheduling for forecasted sales.
3. Ovens off until order. Off again in the afternoon. Thermostat for store set to “off” now that winter is over.
4. Shop the policies before renewal!
5. Drop yellow pages for good! Cut back direct mail. Spend more online.
6. Back to quality marketing and less aggressive offers.

 

[bennyspizza]

GREAT IDEA!!with the cost of cheese going down I have been slacking in this department too!!I dont agree with number. 3 assuming an interval/break between lunch and dinner(we close for an hour between 230 and 330)wont the ovens use more to bring it up to temperture than to sit closed and “idle”??of course we shut ours off overnight. good idea on dropping yellow pages,thats only 150 a year for us but better in my pocket than theirs!!

 

[GotRocks]

Great plans!
Here are some recent changes that I have made;
I am getting killed on beef prices right now, and theres not a darn thing I can do about it because I am already maxed out at what my local market will bear,
So, I went through all my pricing and compared it to my local competitors that are offering pizza, I raised my prices considerably even though I was already at a great cost ratio . our large pizza is 16", most everyone else has 14" as their largest. I need to figure out how to capitalize on that too.
and now is about time to take away some delivery customers from that place with the red & blue logo, but without their advertising budget, and their TV commercials airing all darn day, that may be tough

 

[aj453]

Bodegahwy- If you dont mind me asking. How much are you paying for boxes? Details of the box as well, personalized? flute etc

 

[johnmorrison]

Cutting back on labor has helped me the most. Take your 8000k marketing budget and put it in your pocket. Then see if your number stay the same,mine did !

 

[bodegahwy]

Bodegahwy- If you dont mind me asking. How much are you paying for boxes? Details of the box as well, personalized? flute etc

I will check price next time I am in the store. I just remember that when we compared prices the difference was $4 on a bundle of 50 16X16". Standard fluted pizza boxes. No printing. We put a full color box topper on every one.

 

[bodegahwy]

Take your 8000k marketing budget and put it in your pocket. Then see if your number stay the same,mine did !

I have been doing this a long time and I have been there and done that. Marketing is like a big ship, if you stop spending it takes time to slow down… and then it takes even more to ramp it up to full speed again. I could cut 100% of my marketing and I expect it would make no difference at all to my numbers next month but I think we probably agree that long term it would not be a good plan. How much you can cut and for how long is just a slippery slope and it takes quite a bit of time to see the results.

We let the spending get a bit on the high side so I can trim it back a couple of thousand but more than that, it is time to change it up. Every year or so I cut 20-30% out of my marketing spend and then spend that money in some other way either to reach a new audience or to adapt to the changing world of communication with customers. I will be spending less on the newspaper (still a good place to advertise here), less on direct mail and trying to figure out how to do more online.

 

[Home_Town_Pizza]

Great plans!
our large pizza is 16", most everyone else has 14" as their largest. I need to figure out how to capitalize on that too.

Wow. Our large is a 15". We have an XL at 18". When cheese prices were so high, I had to cut the 18" and people freaked out. I do believe I lost some weekly customers because of it. But I would have raised the prices so high that I know they wouldn’t be happy with that either. When cheese dropped, I brought it back. It’s still at a higher food cost than I’m comfortable with but the actual profit is good enough that I can make do. I basically make the same profit I do on a large, but I can sell to more customers. I’ve also seen via facebook that another place in another local town cut their 18" pizza from the menu and got some backlash for it too.