Date: February 26th, 2008

Greetings! This is my first Inside Info Club document to you for 2008. What a year this will be! Let it be a successful one for all of you.


HOW TO OPERATE DURING A SERIOUS RECESSION
By Lloyd M. Gordon, President
GEC Consultants, Inc.
Skokie, Illinois


Every year after the leaves fall and frigid winds begin to blow in the evenings, and frost covers the ground every morning, we know the Winter Season is heading our way. Even though Winter snows are beautiful and the air seems to smell pure and fresh, we know that snow, sleet and frigid temperatures can play havoc with the business of serving meals to our customers.

This year 2008 brought an additional negative dimension to our worries about the weather and that was the troubled economic times with the housing market in disarray, the dollar dropping in value everyday, unemployment up in many areas, investment money is hard to come by and the consumer confidence level is at a fifteen year low.

We experienced other slow downs of the economy in 2001-2002 after the 911 attack but the economy quickly recovered.

Now we have entered in to another period of economic softness that could really presage a serious recession. Everyone in government knows its here but we really haven’t a clue as to what Congress plans to do. How should we plan to operate in these times?

You must start with the premise that you want to survive by producing the largest profits possible during this winter of recession. Period!

In order to make a profit you must have income greater than expense. If sales are slipping, you must cut costs appropriately, attempt to re-stimulate sales, or do both.

Start cutting costs by reviewing your menu. Feature menu items that are low food cost and that are popular. Revise your presentation to feature and draw attention to those items you want to sell because they are good food cost items. Tighten up on receiving, control portioning. and evaluate plate waste. See if you are giving customers things on their plates they aren’t eating. You can save by eliminating these from the plate presentation.

Check purchasing methods. how you order. how you determine restock amounts. who you order from. what each vendor charges. and examine how things are stored so things don"t spoil. Reduce your inventory and put the money saved into your Safety Fund.

Tighten your personal supervision of production and evaluate how things are prepared. You can strengthen efficiency by tight production scheduling and controls so that fewer people can produce more and better food. This may require buying some labor saving equipment. (Remember your Safety Fund.)

Evaluate how you schedule labor hours. Examine the hours you are open. How many of these hours generate negative cash flow? How many are non-productive (hours when nothing is produced) and how many hours are both non-productive and negative cash flow? Can any these be eliminated?

Now look at the hours when you are not open but may be losing potential income by being closed. What are your competitors doing? After close examination. are there certain days and parts of days that you"re not open when you should be?

If you suspect that some of these hours could effect sales and positive cash flow. you can determine this by using sales management strategy. This strategy is creating a plan of how to maintain or generate sales in a "down" market?

If you are interested in my method for developing a sales strategy, email a reply to me and I will respond with my strategy for sales improvement during a recession period.
Thank you,

Lloyd M. Gordon


Best wishes for a prosperous business year,

Lloyd M.. Gordon
GEC Consultants, Inc.



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