Canteen Concessions are a Reliable Cash Cow
If you are looking for a business with sure profits, then a canteen concession is perhaps the closest answer to your search. A canteen concession is a cafeteria that caters to the regular occupants of an establishment. Having a captive market means that sales can be reliably predicted as you have no competition inside the property.
However, lack of competition has made many canteen concession operators lax in their management. This creates dissatisfaction that may eventually be your opportunity to be the next canteen operator! Also, with the on-going construction boom, a lot of new canteens are going to be needed.
Still, a neophyte in the trade would be overwhelmed if you had to learn everything from scratch. Learn from the wisdom of veterans—pick up their best practices and avoid the pitfalls. There is no sense reinventing the wheel. Here are some of the steps a prospective canteen operator should take before opening a canteen concession:
1. Determine the type of canteen. There are basically three main types of canteens and each demands a different approach. The three kinds are school canteens, office canteens, and industrial or blue collar canteens. You must know the basic difference in service, facilities needed, menu, and pricing.
2. Study the canteen fact sheet. Before even making a bid proposal you must know what you are bound to offer. You may be required to operate the canteen twenty four hours even if some of the hours are unprofitable. Check the rental, number of seats and terms and conditions. All these and more will be necessary to accurately assess the capital, canteen equipment, and manpower you will need.
3. Estimate the capital requirements. Besides the relevant data in the canteen fact sheet, the capital needed depends on sales estimates, the amount of equipment, the performance bond, and renovation you must undertake. Sometimes the previous operator would be leaving behind a lot of usable improvements or maybe you can buy some of their equipment at a bargain.
4. Know the bidding proposal requirements. A typical list of requirements includes the following: your company profile, letter of proposal, previous and current clientele, 30 day Menu Cycle, and business registration. Of these requirements, the most problematic for newbies is the list of clientele. Since you are just starting you naturally have no present clients. Still you can try to use other related experience, like if you had done some catering, as a substitute.
5. Planning and organizing. Even before you win the concession, you must already have plans prepared. Make an organizational chart to make clear the lines of authority and responsibility. Make a list of the positions necessary and make their job description to establish accountability. Draft your rules and regulations to instil discipline and order in your personnel.
6. Menu planning and costing. Unlike in a restaurant, you must have a non-repeating menu for 30 days so that your customers would not get tired of your offerings. Learn a system of costing and pricing that takes into account not only the direct costs like food ingredients but also other expenses like labor time and overhead expenses that are often overlooked in the pricing.
7. Establish a control system. Have systems in place to check for possible theft. Conduct daily inventories and do the purchasing yourself if possible. It is worth considering the purchase of a POS (point of sale) equipment to better monitor your sales. A POS can serve many functions like employee sales, inventories, daily profit reports, etc.
8. Maintain good relations with stakeholders. Effort must be exerted to be in good terms with all the parties that may affect your business. Besides your customers, have good relations with those that may affect the renewal of your concession.
A canteen concession is a monopoly and so it is almost guaranteed to make money. However, it is this lack of competition that may lead you to complacency. Always strive to make your customers delighted with your operations. This is the best way to ensure that you will never be replaced.
To learn more, BusinessCoach Inc., a leading business seminar provider offers a one-day seminar. Click here to view details of the training program on: How to Be a Canteen Concessionaire >>>
*Originally published by the Manila Bulletin. Written by Ruben Anlacan, Jr. (President, BusinessCoach, Inc.) All rights reserved. May not be reproduced or copied without express written permission of the copyright holders.