Archive for February, 2015

There’s Gold in Catering, But You Have to Mine It!

Tuesday, February 24th, 2015

Catering is the most lucrative food and beverage activity for a private club.  This is so because of the economies of scale in serving a known number of guests a specific menu at a set time.  Club operators with the appropriate facilities fully recognize the value of catered functions as a means to boost revenues and net profit.  Savvy club members recognize that a robust catering operation subsidizes their club’s operation, relieving ever escalating cost pressures, rising dues, and periodic assessments.

Despite the many benefits of catered functions, how many managers put the necessary effort into this greatest of opportunities?  With a little bit of effort you can mine the vein of catering gold for your club.  Here are some common sense ways to exploit catering to your club’s benefit:

  • If your facilities and the opportunity are sufficient to justify the cost, hire a dedicated catering manager to sell and service catered events.
  • Establish a catering contract and policies to cover all aspects of the catering operation to include space utilization, minimums, guarantees, room charges, special service fees, room set ups, equipment rental fees, etc.
  • In conjunction with your chef, design attractive catering menus, pricing, and a catering sales packet.
  • Develop a catering marketing plan to focus action and accountability on attracting business.
  • View your catering space the same way a hotel views a room night or an airline views a seat on a flight – as the most perishable product you have.  If not used on a given day or evening, the revenue opportunity is lost forever!
  • Benchmark your catering operation in detail.  At a minimum track your space utilization rates and average revenue per function for each catering venue in your club.  Break down your benchmarks into times with similar demand or usage such as weekday (Tues, Wed, Thurs) versus weekend (Fri, Sat, Sun).  Track the utilization of your most lucrative venues such as your main ballroom for high end functions such as weddings and holiday parties.  Compare year to year benchmarks to track progress or spot weaknesses.  Use previous year benchmarks to set sales targets for future periods.
  • Aggressively court your membership to hold or sponsor functions for their businesses, trade associations, or as a venue for the special occasions of families and friends.
  • Ensure your staff recognizes the importance of catering to the success of the club and that the many “touch points” in planning and execution are seamless, efficient, and with “over the top” service.
  • Ensure follow up to all events to guarantee complete satisfaction and continual process improvement.

Bank robber Willie Sutton said he targeted banks because “that’s where the money is.”   Club managers need to target their catering operation for maximum use and efficiency for the same reason.  While I may be mixing metaphors, don’t neglect the catering gold for a lack of effort to fully “mine” the potential.

Thanks and have a great day!

Ed Rehkopf

This weekly blog comments on and discusses the hospitality industry and its challenges. From time to time, we will feature guest bloggers – those managers and industry experts who have something of interest to say to all of us. We also welcome feedback and comment upon the blog, hoping that it will become a useful sounding board for what’s on the minds of hardworking hospitality managers throughout the country and around the world.

Hospitality Resources International – Management Resources for Hospitality Operators!

What I Expect from My Catering Director

Monday, February 16th, 2015

As every club manager knows, catering is the most lucrative part of a club’s food and beverage service since it adds revenue volume, economies of scale, and certainty to a very uncertain and volatile business.  Lucky is the club that has the appropriate facilities and venues, as well as a board that recognizes the contribution and necessity of a robust catering business to the club’s bottom line.  But having the facilities and strong backing of the board is only the first step in a successful catering operation.

Having a disciplined and detail-oriented Catering Director to oversee the operation is the single most important contributor to success in catering.  Not only must the club find and hire such a professional, but the General Manager must clearly spell out his or her expectations for the Catering Director.  Here are my requirements:

Conduct a market analysis of the club membership and the areas around the club to determine potential demand for catering and meeting services.  This analysis should consider any rules or restrictions the club has on accepting outside business, as well as identify and analyze in depth any competition the club will have for these services.  This analysis should be reviewed and updated annually.

Prepare an Annual Catering Sales Marketing Plan and budget.  This plan should identify potential target markets and how to best reach them, specific programs or campaigns to market club catering and meeting services, monthly sales goals, and measures and reports to track efforts to meet the plan.

Prepare appropriate collateral materials to support the catering marketing effort.  These should include a proper presentation folder and brochure with lots of professional photographs of your club and venues; sample menus and price lists, room diagrams, planning checklist, planning worksheet, sample room set-ups, sample contract, and all club policies relating to catering.  These materials tend to be quite expensive, but they are important selling tools in your catering business.  There are other low or no-cost options available as you can see here.

Organize the planning and execution of the catering department to include the one-time development of the following:

  • Room diagrams for all venues to include dimensions, capacities with various set-ups, and occupancy limits; location of electrical outlets, lighting and sound controls, telephone jacks, HVAC controls; availability of wi-fi; availability of window shades and lighting controls to darken rooms; and a list of available audio/visual and computer equipment.  Diagrams should be prepared for each venue with various set-ups to show prospective clients and as a guide to help club staff set up rooms for specific events.
  • Menus and pricing for different meals and types of events, including sit-down banquets; receptions with buffets, serving or carving stations, or passed trays; continental breakfasts; and meeting breaks.  Experience has shown that a limited number of “packages” aid in the selling process and reduce the time investment in custom menu planning.  This is not to say that the club won’t do custom planning, but anything that limits the up-front investment of planning time makes the operation more efficient.
  • Menus and pricing for different alcoholic beverage arrangements such as open bars, cash bars, beer and wine service, cordial service, champagne service.
  • All catering policies to include hosting policy, deposits, minimums, guarantee counts, cancellations and postponements, service charges, client decorations, entertainment, corkage and plating fees, client supplied food, donations, rentals, methods and timing of payments, fire safety, etc. must be determined, formalized, and printed up to provide to prospective clients.
  • A catering contract that includes all the policies and notes who, if anyone, is allowed to modify the contract at the event.  This is useful protection for the club when, in the flush of a great celebration, the client’s daughter tells the staff that she wants to keep the open bar going for another hour.
  • Written policies and procedures for all the various meal, alcoholic beverages, and meeting set-ups.  This is used to train the banquet staff to a common standard for set-ups, preparation, execution, breakdown, and cleanup for events.  This is a major one-time effort, but it will save the club hours in efficiency of operations, while providing consistent quality service to all clients.
  • Training material for catering staff covering all aspect of catering preparation, set-up, and service.
  • Agreements with rental and special services firms for tents, limousines, valet parking, audio-visual, telecommunications, computers, party favors, and decorations.

Access membership demographics for celebratory dates such as anniversaries and birthdays to be used to “sell” private functions and parties to club members.  It is also important to “mine” the data of members’ business ownership as these companies will be prime target markets for business meetings and events.

Benchmark usage of all venues to determine utilization rates with the aim of establishing policies and pricing strategies to maximize use and revenues of key dates and times for prime function space.

Benchmark activities by type such as banquets (plated and seated), receptions (buffets, serving stations, passed trays), and coffee breaks.  Track number of events, number of attendees, revenues, average revenue per event by type of event.  This information can be used to budget, establish future period goals, and help establish policies and pricing to maximize revenues by type of event.

Prepare a Weekly Catering Sales Report for the general manager to include catering event and revenues for the week, key benchmarks, prospecting efforts, call reports, and 60-day rolling forecast of upcoming events.

Conduct after-event calls and surveys of catering clients to determine level of satisfaction with event and service.  The focus of such surveys is to capture future business while improving any areas of dissatisfaction.

Like any other product or service, the club’s catering function must stand head and shoulders above its competition and continually strive to improve its quality, service, and standing in the community.  Such dedication to quality and continual process improvement will ensure the club the success of its catering operation.

Thanks and have a great day!

Ed Rehkopf

This weekly blog comments on and discusses the hospitality industry and its challenges. From time to time, we will feature guest bloggers – those managers and industry experts who have something of interest to say to all of us. We also welcome feedback and comment upon the blog, hoping that it will become a useful sounding board for what’s on the minds of hardworking hospitality managers throughout the country and around the world.

Hospitality Resources International – Management Resources for Hospitality Operators!

 

Can This Be a Risk-Reward for Club Managers?

Monday, February 9th, 2015

Risk-Reward is a commonly heard term when discussion a golfer’s choice of shots in a competitive match.  In taking a significant risk of failure, the golfer can go for the green and, if successful with a challenging shot, reap the reward of a better score.  In the financial world “risk-reward” is used to describe the potential for greater gain by taking a riskier position.

The underlying connotation is often a gutsy decision based on the elevated risk of failure.  Such a gamble may be appreciated, even applauded, when the stakes – whether winning the match or scoring big in the commodities market – are personal, that is, the downside impacts only the person taking the risk.

In the club management profession, though, the actions of the manager impact the welfare and investment of the club’s members, so decisions affecting the club’s performance and solvency should be made with care and full consideration of all risks involved.  Certainly this is what conscientious managers do every day while diligently managing the operation, meeting the budget, ensuring the club continues as a going concern, and planning strategically for the club’s future.

As every club manager knows, such strategic planning requires careful evaluation of the strengths and weaknesses of the club, as well as seeking those opportunities that offer greater success and security while recognizing and avoiding potential threats to the organization’s viability.

While there may be some sizeable external threats to a club such as competition from a new club with more extensive and up-to-date amenities or the closing of a large employer in the community resulting in the loss of members, there are far more significant threats within the club’s operations – the unappreciated and often ignored potential for legal action as a result of unaddressed liability issues.

Such issues usually arise from one of two causes:

1.   Managers and supervisors, intentionally but more often inadvertently, violating federal, state, or local laws and ordinances relating to the workplace.

2.   Lawsuits by members, applicants for membership, current or former employees, vendors, visitors to the property, community members, or club neighbors for almost any complaint imaginable, but most often related to club operations, ill-advised operational or board-mandated policies, or alleged negligence on the part of the club or its employees.

In the first instance, the underlying problem is often poorly-trained managers or supervisors who are unfamiliar with the detail and nuance of a wide variety of regulatory requirements such as the Fair Labor Standards Act, the Occupational Safety and Health Act, Equal Employment Opportunity/Discrimination, and others.  See Legal and Liability Issues for more information.

While it is in every manager’s best interest to be familiar with the basics of such regulation, it is the absolute responsibility of the club to properly train their management and supervisor employees in the full scope of their duties.  This can accomplished by a combination of establishing and making available detailed club standards, policies, and procedures covering all areas of concern (for an example see Club Personnel Standards, Policies and Procedures) and by providing sufficient indoctrination and ongoing refresher training and reminders of these important requirements (for examples see Managers Handbook and On the Go Training).  Doing anything less is a form of management malpractice and, given the potential for significant fines and penalties, as well as the damage to the club’s reputation, is a risk that must not be ignored.

In the second case of lawsuits arising from a broad range of issues, the burden is again on management to be familiar with existing case law that has created a fairly broad picture of the legal risks of operating a private club and a clear indication of actions and safeguards to put in place to avoid such suits.  See Book Review – Club Litigation Book – Keeping Clubs Out of Court for a comprehensive review of club litigation and steps to take to avoid lawsuits.

Managers must understand that while lawsuits are relatively infrequent occurrences, they most frequently spring from loosely-operated establishments that have not considered and planned for known or potential contingencies.  Finally, the cost of defending from litigation and the size of potential judgments can be an existential threat to the ongoing operation of the club.

Bottom Line:  Risk-Reward can be a gutsy play on the golf course, but ignoring the legal and liability risks to a club can have a devastating downside for which there is no reward.

Thanks and have a great day!

Ed Rehkopf

This weekly blog comments on and discusses the hospitality industry and its challenges. From time to time, we will feature guest bloggers – those managers and industry experts who have something of interest to say to all of us. We also welcome feedback and comment upon the blog, hoping that it will become a useful sounding board for what’s on the minds of hardworking hospitality managers throughout the country and around the world.

Hospitality Resources International – Management Resources for Hospitality Operators!

 

How to Attract and Retain Super Service Employees

Monday, February 2nd, 2015

By analyzing and considering the wants and needs of super service employees, it is possible to set up programs to attract and retain them.  In simplest terms it boils down to respect, status, meaningful work, and enhanced compensation.  In particular I would focus on the following:

  • Establishing consistent Service-Based Leadership at your club.  The underlying premise of Service-Based Leadership is leaders at all levels who recognize the essential task of serving all constituents, including employees.  Weak or self-serving managers will drive them away.
  • Implementing employee empowerment – a natural extension of Service-Based Leadership.  Empowered employees are enlisted as partners in the club’s effort to improve the operation and provide high levels of service.  Super service employees want and need this enhanced participation and contribution.
  • Improving communications with employees.  All employees, but especially the super service ones, want to know what is going on and how the operation and direction of the club affects them.
  • Mentoring employees.  Curious and intelligent, super service employees appreciate the time and effort made in giving them the big picture and a deeper understanding of the workings of the club.
  • Creating “master” server positions that recognize higher skill levels and greater knowledge.  The job descriptions for these positions must clearly lay out those distinguishing skills, characteristics, and duties that warrant more responsibility and higher compensation.
  • Creating a clear career path of knowledge, skill development, and certification which allows other employees to set their sights on the more highly regarded and compensated master level.
  • Assigning master level employees the task of teaching and training those who aspire to the higher level.  Such tasking serves the super service employees’ need for participation and contribution while improving the overall skill level of other employees.
  • Challenging super service employees to engage in creative project work such as taking a larger role in training, creating more effective training programs, formulating and executing member relationship management strategies, and establishing a “wow” factor program for members.
  • Recognizing and rewarding super service employees.  Ensuring they know they are appreciated.  This not only serves their needs, but demonstrates to other employees their value, thereby motivating others to follow their example.  Rewards should also be tangible, such as:  higher pay based on their higher levels of performance and contribution; incentive opportunities based on clearly defined benchmarks; preference in scheduling; and educational benefits to further enhance job skills, knowledge, and opportunity.
  • Providing benefits to all employees based on well-defined employment statuses, i.e., full time, part time, and seasonal or temporary.  At a minimum benefits should include holiday pay for designated holidays, vacation time, personal/sick time, health benefits, and retirement benefits.

As an industry we can no longer view employees as a disposable asset, which is what we do when we view ongoing turnover as a cost control measure.  Operating small, stand-alone hospitality organizations with multiple businesses, high levels of service, and lean management staffs covering long hours and weeks is too difficult a task to do without a stable, competent workforce.  When we view labor as a disposable, easily-replaceable commodity, we condemn ourselves to high levels of turnover with its attendant training costs, turmoil, and loss of organizational continuity.  High levels of turnover must be viewed as a critical organizational and leadership failure that is damaging in all ways to the club’s mission and operation.

Thanks and have a great day!

Ed Rehkopf

This weekly blog comments on and discusses the hospitality industry and its challenges. From time to time, we will feature guest bloggers – those managers and industry experts who have something of interest to say to all of us. We also welcome feedback and comment upon the blog, hoping that it will become a useful sounding board for what’s on the minds of hardworking hospitality managers throughout the country and around the world.

Hospitality Resources International – Management Resources for Hospitality Operators!