Increase Your Profits

Everyone we’ve spoken to likes the idea of increased profit, but it’s one thing to say it, quite another to achieve it.

‘I’ve been running this cafe for years and thought I knew everything!’  Jayden told Clinton at Baldry + Sanford. ‘The stark reality is that I could make about as much working for wages – and I’d be free of the responsibility and headaches and 24/7 responsibility that I feel. If I could make a better profit, then it would make it all more worthwhile, because I do actually love what we’re doing.’

To his surprise, Jayden discovered that a few small changes in key areas of his café business could bring him a significant increase in his profit. ‘In fact,’ said Clinton, ‘if you change just four factors by 1% each, you can lift your profit by a massive 45%!’ He explained how.

Increase your sales

‘People clearly like your café, the menu you offer, the ambience, your pleasant and well-trained staff,’ Clinton told him.  ‘Let’s see how we could increase your weekly sales volume.’  Over a coffee they came up with several possibilities…

•  Up-sell existing orders. This includes adding a few attractive products to the range, and having some of these strategically placed near the till, such as premium-style mints, including sugar-free varieties. Try some special-offer combos at quieter times – they might well take the before 10am muffin in addition to their coffee fix. (Jayden was determined however not to inflict a mindless ‘would-you-like-fries-with-that’ patter on his customers.)
• Introduce a loyalty scheme. Jayden had resisted coffee cards in the past, but he knew that many competing cafes offered them, and every week a number of customers asked if they were on offer.
• Attract new customers. A two-for-one coffee voucher could be distributed to nearby homes and businesses.  A special fun kids’ menu might attract mid-morning Mums, though be wary of scaring away business customer.

'If by taking some of these steps you can increase your sales volume by just 1%, you’ve made the first step towards your 45% profit increase,’ said Clinton.  ‘Now to the next step.’

Increase your price

‘Hey Jayden, you reckon your café fare is pretty good and your price is pretty competitive too, judging by what the competition are charging. So, when did you last review prices? A small increase would have negligible impact on your customers, and there are several ways you can approach this,’ Clinton told him. ‘You could:

• Increase prices by a fixed percentage across the board.
• Raise prices on a selected range of items. This is a better way to go for a café – raising the price of a cappuccino from $3.50 to $3.54 has problems! But how about increasing cake slice prices from $4 to $4.30, and paninis from $7 to $7.40? For the average customer these changes will be insignificant.
• Repackage the components of your combos in such a way as to increase your prices.

You’re half-way to your 45% profit leap!’ Clinton told Jayden. Let’s take a look at the money you are spending.

Buy better

‘If you can knock 1% off the cost of your purchases you’re going to increase your profitability,’ Clinton from Baldry + Sanford told Jayden.

There’s several ways to do this.

• Some suppliers are willing to offer you a prompt payment discount – it helps their cash flow too!
• Review the quantities you order – for some items you’ll get a better price by bulking up your order. For items with a long shelf-life, provided you’ve got the storage space it’s got to make sense.
• At the same time, if you are carrying too much stock you may end up with unnecessary wastage. What are the ideal stock levels for the different items you need to buy?

And now to our 4th step in getting that 45% profit increase:

Trim your overheads

‘When did you last take a good hard look at your expenditure?’ Clinton asked Jayden. ‘Why bother going to all the effort to buy smarter/sell smarter if the money you are gaining is sneaking out the backdoor with careless overheads? I strongly recommend that you review every category of expenditure.

Some specific questions to ask:

• Do we still need that?
• Is there a more efficient way of obtaining that service? i.e. could we contract it out?
• Could we change staff hours to maximize their effectiveness, aligning them better with recognised demand?

+ 1 + 1 - 1 - 1 = 45  Profit Improvement Calculator

At Baldry + Sanford we’re pretty excited about our profit improvement calculator – so are the scores of clients who have used it. The simple calculator shows you how these four small changes of 1% can dramatically increase your profit by 45%. Look at this example:

Profit Improvement Calculator

For other valuable services that will get your business where it needs to go, click the link below:

OUR SERVICES

Free consultation!
 
We’d love to sit down over a coffee (Jayden has told us where to get the best coffee beans….) and discuss with you how we can help you increase your profits.
 
Call Clinton or Email US for a free initial consultation.

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