Tuesday, December 6, 2011

Guest Article: NOW SAY “YES” - Jon Wool, President/Owner, Finesse Cuisine

In my last post here, I declared that we should say “No” to opportunities that will compromise our company’s vision, integrity, or profitability. This post inspired a big positive response from industry friends, but several asked how to best qualify when to say “Yes.”  It’s a great question!

There are many qualitative reasons to say “Yes” to an opportunity, but sound business decisions are always supported by accurate Pro formas and Profit and Loss statements. This holds true for everyone, including the creative thinker, the rainmaker (euphemism for the independent, fast-charging, commission-hungry, and client-pleasing sales person), and anyone inclined to impetuously sidestep standard cost accounting.  I confess: I was guilty of this approach for the better part of my career.

Such behavior is rarely intentional; it is simply a reflection of the uninformed or undisciplined mind. In managing Finesse Cuisine and working with consulting clients, I have found that one solution is to create a compensation plan that in part rewards everyone for achieving specific financial goals. An even more effective approach, however, is to educate your staff to understand events in financial terms and concepts.

Periodic companywide evaluations of real event P&L’s will help you decide when to say “No” and when to say “Yes.” Even hourly employees should get into the act. You may be surprised by the great suggestions your porter, dishwasher, or driver offer on ways to economize.  And they will feel great when they see how they add essential value to the company’s well being. When evaluating event Pro formas and P&L’s becomes an everyday exercise, everyone is empowered to justify activities and pricing to clients, managers, and colleagues alike. The added benefit is that your Accounting Department will be better able to forecast cash flow.

Just as professional athletes, artists, and musicians still practice basic fundamentals, you will find it helpful to regularly run through the following topics with your management: 

  • What is a business?
  • What is a Pro forma?
  • What is a Profit & Loss Statement?
  • How do Expenses impact Contribution Margin?
  • What is the difference between Event Contribution Margin and Net Profit?
  • How can a P&L shape decision making?
  • What are your Company Fixed Costs?

Just like a basketball player practicing free throws or a jazz pianist running through scales, having these conversations reinforces the fundamentals of your company’s business.

It is the job of all managers to control and understand how costs affect them directly and why the P&L is essential. Armed with financial understanding, you can evaluate each opportunity’s value and potential risks.  Knowing all the right information helps you know when to discard the “Just Say No” rule and when to feel confident offering a wholehearted “Yes!”

Monday, December 5, 2011

Plan For The Slower Months with Demonstration Maketing

What can we do to make cold calling “warmer”? How can cold calling bring in more dollars? How can we give a salesperson a reason to do cold calling? One answer to these questions is to offer group tastings to your marketplace. The mission is to invite potential customers to a location to taste your food and see the power of your presentations.
Decide on a geographical area you wish to draw prospects from. It could be a suburb, a building, a city, an industrial park, etc.
Find a location close to that area that will let you use their facility to hold a sampling open house for people in the area. You probably need a location that will hold 100, people including your buffet set-ups. Carpet stores, automobile dealers, theater lobbies etc. all work well. Most of these places will let you use their place free since you are helping them become acquainted with the area’s buyers also.

“Hi, my name is Bob Smith and I’m the owner of ABC Catering. We’re looking for a place to set-up catering buffets and serve about 200 people some samples of our food. Would you consider letting us use your showroom to invite these business people to come on our invitation? In this way, these people will also be introduced to your location and your products.”
Pick a date for your sampling open house. Wednesday just might be the best day for it, but other days can work just as well. Your invitation will tell potential clients to come between the hours of 11:30 a.m. and 2 p.m.
Now it’s time to go out and canvas, email or call prospects in the area selected!
Here’s gist of the marketing message that you place or say in an email blast, letter, postcard, phone call or in person:

“ABC Catering wishes to introduce our catering to those who haven’t used us so we can build our business. We want to invite some people from your company to come to our free food tasting next Wednesday at the USA Carpet Showroom. Each company may have up to five people attend.”
At the open house, offer samples of your entire product line from simple box lunches to whatever. In some cases, you should have some buffets just for show. Be sure to demonstrate your Wow! factors of presentation. This system of marketing cold calling has helped many caterers increase their business dramatically. It gets everyone in the company involved in an exciting promotion.