When the Blue Cafe & Bakery first approached us they had no system in place for recording their income & expenditure. They knew how much their daily & weekly takings were but they did not know how much they were spending. They initially felt they were doing very well with takings of over £2,000 per week. Once we sat down with them and went through their operations with a fine tooth comb it was a very different story.


Their cash takings were over £2,000 alright but their physical sales were much more than this. They were giving away free cups of tea and coffee, sandwiches and lunches at random to friends and regular customers. The only thing being properly measured was the crisps because you could count the stock at the beginning and at the end of the day and anything missing had to have been sold. They were also throwing away a lot of unsold stock.


Their expenditure was equally random. Some purchases were made from the local supermarket and others at discount cash & carry. Bills were regularly paid late with either a fine imposed or interest added.

THE SOLUTION

With all the evidence we had gathered we put it to our clients that there needed to be a culture change in the way they did things. We asked them to monitor all the free items they were giving out. This amounted to between £750 and £1,000 per week. They soon stopped this as they realised it was not necessarily bringing in more business but instead diverting staff from paying customers. We calculated that they paid over £1,000 in fines and late payment interest in one year alone and could have saved over £500 by buying and storing stock in bulk from the cash & carry. Baking bread on the premises also produced a saving as did getting the milk and eggs delivered by the local milk man. We also set up an easy to follow system of recording purchases. That saved our client a lot of time and took the fear out of bookkeeping. Overall, their net gain per month from implementing these changes alone amounted to just over £1,500. Not to mention the new working style, which made everyone feel happy to come to work