Small eatery, big room for improvement

By: [Christina]

One week has past since we began our journey with Joey’s business and the experience has been like a roller coaster ride ever since.

Our  observation

Joey’s business is a snack eatery located in the market of Jagna, a town center 10 minutes away from where we live. Dark, small and simple are the first impression during my first visit with my business partner Jake, but it became better when we started to talk to Joey, who surprised us with his business mind and ideas. With the culture of eating snack before each meal in Philippine, Joey’s snack shop seems to have a promising market. Expect for the normal snacks and drinks sold in every eatery in the market, one item called ‘Pancit Palabok’ can only be found in their shop,  giving them competitive over other snack eateries. 

                                                      Display cabinet and menu

When we asked Joey and his wife what is their biggest concern about their business, the answer was quite different from what we expected. ‘The space’, his wife replied very seriously. ‘You mean the space outside for the customer?’ I asked and began to think about the possibility to rearrange the seating area and adding more tables, ‘No! The space in the kitchen! It is so small and too much heat, it is uncomfortable for my wife and the assistants to work inside. I want them to be happy at work!’ Joey said and then led us into the kitchen, showing us the burning coal to maintain the temperature of Sikwate: a popular local hot chocolate drink. One alternative suggested by him is replacing cooking with coal with a slow cooker, which enables them to save more space as well as reduce the heat to a large extent. However, the cost of operating the new slow cooker makes them hesitate about this idea, and this lead us to ask questions about their production cost and revenue.

IMG_5774

Burning Coal in the tiny kitchen

It really surprised us when we found out they barely have any record for their business and have no idea on the production cost or how much of each item they can sale everyday. ‘We make enough money to pay our assistants and send our son to college’, Joey said with satisfaction and showed little worry in not knowing those information. However, it is obvious that the right business decision and suggestions are hard to make based on instinct, therefore, it is clear that measuring their business and building an easy but effective recording system should be our first step.

 

IMG_5778

Joey’s wife, busy with work

The next few days were spent at the market, we marked down every sale they made in one day and tried to figure out the production cost for each item and the fixed expense, with which they will be able know the profit margin. This turned out to be a challenging task as although knowing the production cost for each container, Joey and his wife have no idea how many dishes they can make from one container. With the help of Joey’s wife, we finally calculated the cost of most of their items and have a more accurate idea of how the business is doing.

Based on the data we have obtained, we were able to help Joey make up his mind on the slow cooker idea by comparing the estimated electricity cost and the current expense of running on coal. To build up an easy recording system, we bought several tally clickers for Joey’s wife, enabling her to count sales by clicking the clickers and she showed great interest in this idea.

Next step 

To give more motivation on recording their sales, we will show Joey and his wife insights from the data we already have in the coming week, such as the distribution of revenue and profit of each item and the eatery’s daily revenue and profit. Suggestions will also be given, for instance, a ‘best seller’ tag can be put on the menu to increase the sales of the items with larger profit. At the same time, we will monitor the effectiveness of the clickers and help Joey and his wife build up a simplified accounting system and understand their business better with the number of sales. With this system, we will also be able to see the outcome of our suggestions.

 

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s