The Role Of Risk Independence And Competitive Extermination In Cost Control Techniques For Small Businesses - Study

Discuss about the Role Of Risk Independence and Competitive Extermination.

The past few decades have experienced a huge number of start-up businesses that also fail in equal measure. The increased small business establishments and their rapid failures have therefore heightened the need to establish the factors, which, according to business entrepreneurs, influence business performance. An issue that has raised a particular interest, as well as complexity in business management, is the management of funds. With the intention of unraveling the different cost control measures taken for proper management of funds, a semi-structured interview was conducted in one Mappen Noodle Restaurant.

The interview was conducted on the general manager of Mappen Noodle Restaurant that operates as a food and beverage restaurant. The interview targeted the person at the top of the chain of command in the restaurant given that he oversees the customer service in the company in terms of ensuring the services offered are of high quality and that the food and beverages are fresh and safe for human consumption. He is also in charge of ordering stock for the restaurant and cost regulation. He also ensures that employees who leave the restaurant are given a good sendoff. The general manager embraces the culture of saving and cost control is done effectively.

Mappen Noodle Restaurant operates from the Central Business District of Sydney. The restaurant specializes in Japanese dishes and beverages. Management offers a variety of noodles and rice recipes to attract different segments of customers. Besides, the restaurant ensures that it offers reasonable pricing strategy for customers who love value services (Filimonau, et al., 2017). Currently, the restaurant is focusing on redesigning its menu but there is also need to implement proper financial management techniques.

Data was collected by interviewing the general manager of the restaurant. Before the interview, the hotel owner was advised on the need to conduct the survey, advantages, and the possible uses of the results that would be obtained. His consent was then obtained after the explanation that eventually improved his confidence towards the study. Besides, the researchers requested to be allowed to receive further information even after the study if need be.

There are a few cost control techniques utilized by the general manager regularly. The restaurant has created a connection with food cooperatives in the region for supplies. By buying from the cooperatives, the restaurant is able to get discounts, which reduces operational cost. The discounts further ensure that the restaurant maximizes on profit. The manager also focuses on setting a decent example for the employees to follow. At the point when the restaurant leaders exhibit interest to push the business forward, then at that point, the workers make up for lost time with the manager in achieving the goals of the restaurant .Subsequently, the employees work towards guaranteeing that the organization becomes successful with respect to tasks and maximum profits.

Methodology

The other strategy is publicizing costs. This expenditure can be limited and provides measured costs that many food and beverage providers cut from their financial plans when the running consumption turns out to be more costly. According to Helsen, et al (2017), rather than deploying money in many sorts of marketing modules, a person can just spotlight on the key strategies and spend less in marketing and reach the same number of individuals as was expected, unlike other people who will spend a great deal in many advertising techniques resulting to similar sales. The general manager also explained that the restaurant has the principal part of cost cutting. Furlough is a routine with regards to training workers with their pay rates. At the beginning of employing different staff to the framework, they get training on how the restaurant tasks are carried out (Annaraud, Singh and Lively, 2014).Jayaraman (2016) indicates that these costs incurred in employee training are constantly moved into the worker's compensation and afterward it is addressed.

In the backhouse control measures, cost control activities include procurement of things and practicing control over management to give services that clients will be pleased with. The general manager carries out the food cost regulation. The general manager maintains the daily food inventory, the restaurant sanitation levels, and planning assessment. This further incorporates guaranteeing appropriate handling of all food and dealing with services and menus (Jaaron & Backhouse, 2016). The general manager also works capably and proficiently and within the required gauges of food cost desires. He for the most part oversees daily food tasks with the concentration on profit maximization. Group training and affirmation is another critical action taken by the general manager. Training employees is conducted every year and posting them on the lead cook advancement. The restaurant practices the most elevated knowledge to the cooking and thusly most of the clients appreciate the restaurant services and dependably use the restaurant for meetings as well as food and beverages. In the back house, planning of the work is an important demonstration of cost-cutting (Sachs, et al 2014). Each employee is put in a situation to acclimate with his/her field of production (Choi, Chan & Yue, 2017), and along these lines everybody expands the potential for business profits.

The front area is the most important part of the restaurant. The restaurant requires reducing the budget, but this is the important move in making the overall standpoint of the restaurant once the clients enter it. The interior ought to be pleasantly beautified to draw in the clients (Cezar, Cavusoglu & Raghunathan, 2017). Having an excessive number of clients at once is challenging. The manager needs to set waiting sections that will give most extreme solace to the clients but at a less cost. This incorporates level seats and stylish seats. The manager of the restaurant I visited guarantees that menus are placed in those waiting sections to keep those clients doing something that guarantees clients are not exhausted. There ought to be a few more measures to influence the client’s enjoyment before they are served (Pavlatos, 2011). Because of many clients having kids, they use the restrooms when they visit the restaurant. So the restaurant generally keeps them to the measures of tidiness and hygiene required by the customers. With the ongoing innovation, it underpins the advanced tools that helps the best possible sanitation and influences it to stay clean without much struggle. In this manner, the restaurant controls the budget of enlisting different employees to keep up tidiness in the restaurant.

Discussion and Findings

Because of budget regulation, there is some business proficiency. The principle advantage of budget control is decreasing the restaurant expenditures by bringing down the amount of funds at the disposal of staff members. The restaurant confines the estimation of money that ought to be discharged to dependably deal with noteworthy measures of money close by at all time and put resources into many categories (Ni?? & Stefea, 2014). Additionally, by considering some finances, the staff is permitted to control its spending. The restaurant is taking the initiative to decrease potential abuse by workers. In the event that an employee is given an objective concerning how he can run a noteworthy errand, he might be less prone to spend cash on unauthorized errands or products, as he will not have the capacity to achieve his core targets. Cost regulation dependably urges everyone in the restaurant to maintain the healthy business environment in different sectors of the restaurant (Thomas, Brown & Thomas, 2017). Likewise, to some degree a few workers are committed to helping the restaurant accomplish its objective. A noteworthy advantage of cost regulation is that it strengthens bookkeeping and helps restaurant planning by focusing on the proper use of resources. According to Helsen et al (2017), by knowing the operating costs, managers can accurately anticipate the financial plan when the cash is spent.

Conclusion

Cost regulation and money related management is the foundation of a restaurant business. It includes the measure of profit that the restaurant will generate at a specific time. Front house of the restaurant is fundamental in deciding the sort of discernment the client will have in relation to the restaurant. The back house will dependably decide the nature of the services of the restaurant. The redesigning of the menu will play a great role in attracting the clients to review the different dishes offered in the restaurant.

Reference

Annaraud, K., Singh, D., & Lively, H. (2014) Assessing and Analyzing Internal Control Practices in the Lodging Industry. The Journal of Hospitality Financial Management, 2(1), 26-31.

Cezar, A., Cavusoglu, H., & Raghunathan, S. (2017) Sourcing Information Security Operations: The Role of Risk Interdependency and Competitive Externality in Outsourcing Decisions. Production and Operations Management, 5(5), pp. 860-879.

Choi, T., Chan. H. K., & Yue. X. (2017) Recent development in big data analytics for business operations and risk management. IEEE transactions on cybernetics, 2(4), pp. 81-92.

Filimonau, V., Lemmer, C., Marshall, D. and Bejjani, G. (2017) Nudging’as an architect of more responsible consumer choice in food service provision: The role of restaurant menu design. Journal of Cleaner Production, 14(4), pp.161-170.

Helsen, Z. Lybaert, N., Steijvers, T., Orens, R., & Dekker, J. (2017) Management control systems in family firms: A review of the literature and directions for the future. Journal of Economic Surveys, pp. 410-435.

Jaaron, A. M., & Backhouse, C. (2016) A systems approach for forward and reverse logistics design: Maximising value from customer involvement. The International Journal of Logistics Management, Vol. 27 Issue: 3, pp.947-971

Jayaraman, R. (2016) Project cost control: a new method to plan and control costs in large projects. Business Process Management Journal, Vol. 22 Issue: 6, pp.1247-1268

Ni??, C. G., & Stefea, P. (2014) Cost control for business sustainability. Procedia-Social and Behavioral Sciences, pp. 307-311.

Pavlatos, O. (2011) The Impact of Strategic Management Accounting and Cost Structure on ABC Systems in Hotels. The Journal of Hospitality Financial Management, 19(2), 37-55.

Sachs, C., Allen, P., Terman, R., Hayden, J., & Hatcher, C. (2014) Front and back of the house: Socio-spatial inequalities in food work. Agriculture and Human Values, pp. 3-17.

Thomas, N. J., Brown, E., & Thomas, Y. L. (2017) Employee satisfaction and turnover intention: A comparative analysis between front-of-house and back-of-house employees in casino-entertainment venues. Journal of Human Resources in Hospitality & Tourism, pp. 112-118.