Volume ???

Joined Dec 29, 2009
Hi Everyone,

I am new to the forum but decided to dive right in. A quick background on my business and experience. I am 29 years old and have been groomed into taking over and running my parents business. We started as a very small mom and pop shop and have grown to about 900k in catering revenues (we are down to 820k this year) and also own a restaurant that produces about 430k annually. We bought the restaurant 3 years ago and have maintained a growth rate of 33 % annually since we took it over in Aug. 2006. Since taking over the restaurant our catering numbers have stalled from 872k in 07 to 888k in 08 and now 820k in 09. None of this seems any issue but we are losing a ton of money as my folks had projected us to be at 940k by now and that has not happened. We are now too heavy on expenses and realize we lack volume. Unfortunately the company has accrued debt in the leap for growth and purchase of the restaurant so cutting overhead is not an option at this point. We have already cut as much as we can find. All of this debt was taken on during the market boom and the timing was horrible so hear I am looking for my business :).

So here are the two parts I wanted some feedback on. We are really diving into our numbers and analyzing how we do things so I wanted to bounce this off anyone willing to respond:

1. We currently operate on product cost being 30 percent of the total we charge to the client for a meal. So for example a meal costing us $3.00 in food product would be charged at $10.00. We then also charge an additional 15 percent operations fee to most clients to account for transport, delivery and incidentals. This formula seems to be keeping us competitive but what are you thoughts on that? Is this too low? Raising prices in this economy is very scary to me but I would like to get some outside opinions.

2. After pulling the numbers today it appears we have about 200 active clients. Of those 200. 10 of them account for about 60 percent of our annual revenues. Now I know about the 80/20 rule but this seems like way too many eggs in a few baskets. I have a finance degree and knowing how markets change and move this fact scares me greatly. So, with that being said, how does a one man sales team get the most bang for his buck and time in order to grow in volume? Where is a good fishing ground in this day and age? What are some of the low hanging fruit to produce revenue growth quickly? What are some of the home run contracts you all have found that may take awhile longer. I am trying to mount a balanced attack of quick pickups and larger contracts.

Any input would be greatly appreciated.....

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