Consulting Services That Helped Serrano’s Mexican Restaurant
- Improve Operational Efficiency
- Improve Labor & Food Costs
- Increased Profits by a Projected $3.5MM*
Serrano’s Was Nearing Closure…
Operational Inefficiency
Serrano’s revenue neither grew nor shrunk–for years, they were stagnant. They thought they were doing well, but, in reality, high labor and food costs were killing them slowly. Menu pricing was disproportionate to food costs.
“We had been unprofitable for a few years,” said Ric Serrano, President and CEO Serrano’s Mexican Restaurant. “We were getting to the point where if we didn’t figure it out soon, we weren’t going to have a business.”
Labor Cost Controls
Labor costs increased by 50 percent in just two years, meaning Serrano struggled to pay workers. With five separate locations, resources were spread thin and heightened frustrations with control of the restaurant.
Accountability Measures
Serrano’s didn’t have a system of accountability. They stopped their incentive program for store managers, hurting performance and impacting gross margins and corporate profitability.
On top of this, management and owners didn’t have clearly defined roles, which led to an ineffective, toxic work environment.
But They Fought to Become Profitable
Defining Clear Roles
Working with Serrano, we clearly defined roles for management and owners. We also worked together to restructure and reimplement compensation plans that fit within their organization.
Improving Labor Costs
To combat labor costs, Ric increased how many servers were on the floor. Improved customer engagement resulted in better tips.
Improving Menu Pricing
Ric adjusted the discrepancy between menu pricing and food costs. We helped Serrano rework his relationship with vendors to get better prices for products and adjusted their menu pricing to ensure revenue growth.
Increasing Profit
Before the first year of our consulting service was complete, Serrano improved operating profit by over a quarter of a million dollars.
“We changed from top to bottom, from how we do our financials to how we hold people accountable.”
Ric Serrano projected a $3.5MM return on investment from our services. “Without the help of American Management Services, we would have lost our way. We needed a new focus and some help getting on track.”
Improved Costs
We helped Serrano’s with both labor and food costs to ensure revenue growth
Defined Roles
We helped clearly define manager roles to reduce poor performance and corporate profitability
Increased Profit
Serrano’s would see a projected $3.5MM return of their investment from our services
In Ric Serrano’s Own Words:
I would like to thank you for the leadership and assistance provided by American Management Services to Serrano’s Mexican Restaurants over the course of the past year and the training and support provided by your Consulting Group Manager, Herb Bachelder.
We have become focused on performance defined in terms of profitability under the direction and assistance of American Management Services. With your company’s skills, we have implemented significant changes and improvements including:
- A more aggressive cash management program that is accelerating the cash inflows through improved deposit requirements and follow-up
- Implemented gross margin standards through the food costing and menu planning process to improve profitability at all restaurants and for all events
- Improved the focus of the management staff on profitability while maintaining a commitment to quality service
- Implemented labor cost controls along with a scheduling process to achieve targeted goals
- Completely rebuilt our Events and Catering structure to allow us to leverage our investment in our facilities.
- Improved communications through the introduction of the Store Manager Weekly Management meetings focused on Flash Report results and Monthly General Manager Meetings to improve cooperation and coordination across all stores.
- Improved the effectiveness of our meetings by focusing attention on the flash reports that have been developed to drive performance
- Implemented an incentive program for store managers to drive their performance to attain the targeted gross margins and improve corporate profitability
- Developed a recruiting process to maintain staffing levels in an industry that is typically higher turn-over
- Developed predetermined profit plans and monthly variance reports that will enable us to closely monitor our financial performance
These processes have become ingrained in our routine and our culture and have been maintained on a regular basis. We fully expect to see the continued benefit of the initiatives that have been implemented.
We expect to realize the return on investment of $3,500,000 million over the next three years as a direct result of these changes which significantly exceeds the cost of the program.
In fact, during the first partial year, our operating income has improved by over $750,000. I will be pleased to provide a recommendation for the services of your firm and your consulting team to prospective clients.
- Ric Serrano, President/CEO
- Serrano's Mexican Restaurants
- (480) 899-3318
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141 S. Arizona Ave
Chandler, AZ 85225
