Focus on Profitability

By | December 21, 2014

In one particular show, two teams were pitted against each other however the number of people in each team differs. In order to judge the winner, the two teams needed to run a restaurant for twenty four hours and the winner will be judge according the team that accumulated the highest profit.

The only employees that remained unchanged are the chefs.

One team is handicapped because they have lesser team members.

In the restaurant set up, there are a few categories like the food section, the souvenir section and many more.

So the contest began.

In the end, the team that has achieved the highest profitability was the team with lesser members.

How ironic.

The leader of the winning team described their strategy was to focus on key sections that are more profitable than the rest.

They not only deployed more personnel to the section that sell beverages however they ensured that the ones deployed there had a likeable personality who could get the customers to continue to buy more drinks after they finished the initial glass of wine or alcohol.

They position the least productive member to the souvenir counter as that section have very low margin and most people who go to the restaurant are more interested in food and not souvenir. By ensuring the least productive team member has a role that might not change the possible outcome of the competition, it allowed the member to feel belonged as part of the overall challenge. Instead of sidelining that person, he still felt that he had a pivotal role to play in the team.

There are always bound to be superstars in any team.

Delegating the right type of responsibilities to the right person is pivotal to maintaining a cohesive unit that will drive towards a common goal.

The likeable personality in the team members of beverages section charmed the customers as they continued to purchase drinks after drinks even though they have finished the food on their respective tables.

In this case, they were able to drive an even higher profitability for each table.

In a restaurant business profitability for each table is crucial.

It is tough on profitability if a few customers of a restaurant who sat on one particular table only order the least expensive food and drinks yet they stay up chatting the whole night without ordering more.

Either the same customers at the table continue to order more food or drinks the whole time or the productivity of the table, measured in terms of different sets of customers who sit at that table will ensure that the total profitability of the night is at the expected level.

Therefore having the right kind of salesman who would know how to continue to get the customers on the same table to buy more drinks after they finished dinner is a crucial skill.

Having the right kind of people for the right type of job is one of the most important factors to ensure higher profitability.

Imagine, if the customers who had dinner at the restaurant decided to stop drinking more after that and spend more time at the souvenir outlet.

There might be enhanced sales at the souvenir counter however if the profitability for each transaction at the souvenir counter is minuscule compared to the profitability of the beverages section then the end result will definitely be reduced overall profitability.

Imagine again, if the likeable personality team members are placed at the souvenir section, you will probably get more sales at that section and more customers spending time at that section chit chatting as they are able to draw the customers to their section.

This will be a pure disaster as less people will be drinking away and more people will be glued at the souvenir section.

It is, after all, a question of strategy.

Therefore, strategy should be such that it positions the right people for the right kind of job and deploy the right people to the most important category that derives the highest profitability.

Focusing on profitability and not just sales is not longer an option but a necessity.

For a better tomorrow.






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