2.2 Record keeping and bookkeeping
Many, if not most, small-business owners detest the numerous chores that keep popping up at the record keeping end of their business. They consider record keeping and bookkeeping unnecessary headaches and procrastinate as long as possible, except when it comes to depositing the checks. The longer administrative chores are postponed, the more difficult they become to do, not only because of the sheer volume of the work but because you forget the useful little details you didn’t record when they were still fresh in your memory.
The best way to approach office chores is to do them daily, keeping up-to-date on every record keeping system you use. There will be some extremely busy periods in your business when you simply cannot get into the office. Fine. Postpone the office stuff, but only until the next opportunity comes for a free hour or two. Don’t let your mind tell you there is no free time. Much of the office work approached this way can be, if not exactly fun, at least tolerable. Adding up your books every month can definitely be fun, provided your cash flow is a healthy, positive one. Whether you prefer the traditional low-tech tools of bookkeeping or newer accounting software programs, you have to add your own numbers to know how your business is doing.
Without good records you face many potential problems. You don’t know how much you owe your staff. You’ll have to rely on their record keeping — a very poor practice. You don’t know how much to charge clients. You forget a scheduled event because it wasn’t written on your calendar! You don’t know how your business is doing, what your actual expenses and your total receipts are, and what your gross and net profits (or losses) are. Your business is doomed under these conditions, no matter how good your food is.
Your other choice is to hire someone to do all the office chores. But remember, if someone else is doing your bookkeeping, you will still have to hand your records to him or her, and the bookkeeping won’t be any better than your record keeping.
2.3 Staff management
In a survey of a large number of US catering companies in the late 1990s, an overwhelming majority of the respondents indicated labor issues are their largest concern, including hiring chefs and kitchen personnel, service staff (both full and part time), and sales staff. Over the years such concerns became more acute and caterers (like other business owners) constantly complain about finding competent and reliable help even if they are willing to pay good money. Should you be able to find good staff, appreciate them, nurture the relationships, and count your blessings.
If you are basically a one-person operation, with on-call staff only, your staff and production-control problems will be minimal. If your business is a little larger and you employ part-time or even full-time staff, and perhaps a sales representative and marketing person as well, your ability to deal with your staff becomes important.
2.3a Good serving staff
One ingredient of a successfully executed event — besides your excellent food, good planning, and timing — is the gracious and superb service your staff provides. How your people present themselves, how they interact with the guests, how much they are interested in serving the food and not just receiving their weekly checks, is what the client perceives as service. Good food with mediocre service will not bring you repeat clients. Good food with poor service gives rise to complaints.
There are two common problems with serving staff. One is accepting that being a server puts them in a subservient position. This is often a problem with better-educated staff from middle-class backgrounds who take catering jobs to earn extra income. They resent being treated like servants. A second problem occurs with serving staff being overly friendly with the guests, talking with them and treating them as equals, even engaging them in lengthy discussions while the food is getting cool on the serving trays they are supposed to be passing around.
When hiring your staff, make it clear to them that you are in a service business and their role is to serve the invited guests, not just to dispense food as a host or hostess would. (See Chapter 7 for further discussion on staffing.)
Determine how to give good service. Choosing and motivating your staff are two essential parts of this. These two items also apply to your kitchen staff. In the kitchen you are dealing with a staff whose duties include work that is often monotonous and unpleasant, such as cleaning a small mountain of shrimp. Rotating your staff from monotonous to creative work is helpful. Doing the routine work in teams is also a good way of easing the burden.
Your relationship with your sales and marketing staff will probably also be reflected in their performance, unless you are lucky enough to find someone who works well without supervision.
2.3b Combating employee theft
Theft is a serious problem in virtually all food service facilities; the bigger the institution, the bigger the problem. The main problem is the staff stealing your raw ingredients. This is not easy to deal with. If the amounts taken are relatively small and the food value low, poorly paid staff may hardly consider it dishonest to take a package of butter or half a dozen chocolate chip cookies. The issue is more serious if half a dozen pieces of filet mignon disappear regularly. Even $20 worth of food taken from your kitchen by the staff can have an impact on your profit margin if it happens routinely.
To make matters worse, in a small business you don’t purchase many extra supplies. If you need 23 steaks for a dinner, you may buy a few extra in case the guest count increases at the last minute or as insurance against one steak being ruined beyond repair, or being dropped in the dog dish in front of the client. Six steaks taken from the refrigerator can spell disaster.
Theft is usually not much of a problem in a small business with a small staff. You know each other well and your relationship is cordial. Once your business and your staff grow and you hire minimum-wage dishwashers and extra food prep staff, theft could become a real problem, particularly if you are frequently absent from the kitchen.
Larger restaurant, hotel, and institutional kitchens deal with the problem by daily and weekly inventory control. This does discourage theft since the staff know about the strict control. If they are taking the butter, it will be limited to one pound instead of four. The disappearance of a package of butter is hardly noticeable when a lot of food is being prepared; four packages missing will be noticed. Large kitchens put someone in charge of logging everything coming into the kitchen in raw form and keeping track of each item and quantity being used. (This serves as more than theft prevention; it is also the system for ordering and restocking.)
In your much smaller business, the idea of inventory control is still valid. You have to know what you have in your freezer and refrigerator, on your shelves, and in the bins. You don’t need to itemize every last article, but at least keep track of the major items (e.g., how many chicken breasts, how many cans of caviar). Do your best to make your staff understand that you know every spoonful of vanilla in the vanilla bottle and every cup of flour in the flour bin.
Another way to make the staff less likely to take food behind your back is generously sharing the delicious extra food after a successful party.
2.4 Financing and budgeting
Records compiled by the Small Business Administration indicate that a significant number of small businesses fail because of undercapitalization. What a waste! Would-be entrepreneurs start their undertakings full of enthusiasm, hope, diligence, skill, and a willingness to put in 80-hour work weeks — but without enough money. All their resources are put into the business — the money from a second mortgage on the house, a spouse moonlighting for extra funds — just to end up losing it all.
No amount of work and enthusiasm compensates for undercapitalization. You must have sufficient financial backing to start a business, to pay monthly fixed expenses even in negative cash flow months, and to have a cushion for unexpected expenses, which can be large if you need