Pizza Today - August 2020 - 12

M I K E 'S M O N T H LY T I P

MIKE BAUSCH

Penny Wise, Pound Foolish
Think big picture to prosper

M

y grandpa would analyze the
price of a can of soup down to
the penny. He would then compare cans and shave off two cents between
brands. I think that's what comes from
being raised during The Depression. The
irony is he would then gamble at the horse
track every other weekend. He would blow
through whatever money he had saved, and
more, hoping his big ticket came in. I find
this often in our industry where pizzeria
operators are penny wise and pound foolish.
When it comes to promos or guarantees,
so many owners are hypervigilant never to
let any customer get the best of them and
abuse an offer. So hard-nosed that they will
suffer sales as a result.
If you offered a 100-percent satisfaction
guarantee, no matter what, you will have
one to five people out of a thousand that

take advantage of it. I realize that it's super
annoying. However, you'll also gain another
few hundred customers that will way outweigh the food cost and agita from those
few bad apples. The thought of getting
taken advantage of will prevent some owners from seeing the big picture and making
more profit. Maybe it's ego or fear, but it
costs money being angry at a few overly
advantageous customers.
The same idea of saving pennies on
soup applies to purchasing from your
vendors. When you're looking to shave
pennies on items you barely use while not
paying attention to the market price of flour
or cheese, you don't take the big picture into
account. Don't just price check last month's
cost vs. today's invoice. Evaluate these costs
according to the market trends and be ag-

gressive on that, not on the price of capers.
Lock in deals on the items that determine
your macro food costs. Don't get lost in the
weeds on your purchasing digging for pennies. I realize the devil is in the details, but
the money is on your floor, be hypervigilant
there with your customer's experience. It's
darn near impossible to save your way to
prosperity in this industry. Success comes
from revenue ... significant revenue, that's
the driver.
Find a vendor you trust and let them be
profitable with you as you grow your business. Don't kill yourself over calculations
and spreadsheets that don't move the needle.
Don't get me wrong. You need to be highly
aware of your prime cost and your sales. A
few pennies on breadcrumbs is not what's
going to be the differentiator between your
success or failure. If you applied four hours
of work and saved $15 as a result, you have
now valued your time at less than minimum
wage. If you created a new promotion in
that time and only earned ten new sales,
that could be a few hundred dollars in new
revenue.
When you buy cheap plates, cheap
chairs, and cheap tables because you
NEED to save money, you now become
a cheap restaurant. An investment in
these items in your restaurant translates into
more substantial sales and higher perceived
value. They pay for themselves, not in years,
but weeks. Make your restaurant the most
inviting and hospitable place imaginable
with a comfortable and inviting atmosphere
and ambiance. This is an investment, one
with a dependable ROI. Better ambiance
leads to more customers and a higher check
average. This is factual restaurant science
based on research. The caveat is, if you go
for dive ambiance, then embrace the dive.
Cafeteria-style fluorescent lighting with
folding chairs is not a dive ambiance. It's
just cheap.
Look for big picture items and stop wasting your time on pennies weekly when you
could be churning thousands daily. ■

MIKE BAUSCH is the owner of Andolini's Pizzeria in Tulsa, Oklahoma. Instagram: @andopizza

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