Read an interesting article about a bakery in the States that uses the honor system in collecting payment.
“I liked the idea of simplifying things and … the honour system made a whole lot of sense,” Bergen says. “What irritated me about going into Tim Hortons, for example, was waiting in line for something as simple as getting a donut and a coffee. So the thought was, someone can pour his own coffee, grab his own bagel, cut it himself, throw the money in, and walk out. We don’t touch 60 per cent of the transaction.”
Because it is up to the customers to total their purchases, Bergen has simplified the cost structure.
“Everything is rounded off to the nearest quarter with taxes included where applicable,” he says. “So every desert is $1.50 (tarts, brownies, and date squares), every pizza lunch is $5, every beverage is $1.25, every loaf of bread is $2.75 (Italian sourdough, multi-grain, and raisin bread on weekends), croissants are $1 each, and bagels are three for $2 (plain, sesame, and multi-grain).”
The bakery conducts audits every six months and Bergen says only once did things come up short.
“Our theory is that two per cent of our sales are being ripped off. ‘Ripped off’ in the sense that there are people who forget to pay or they make a mistake in paying, and then there are people who deliberately don’t pay. And every so often we have to kick somebody out that we know hasn’t been paying,” he says. “But at the same time we figure we’re being overpaid by three per cent. Some people come in and want a $2.75 loaf of bread, but they see we’re busy so they throw $3 in and walk out. Or, although we discourage tips, some people still give them to us. But because the staff is paid well (the average wage is $15.50 an hour), the tips go into the general pot.”
What is interesting is this. Their finances didn’t come up short. I don’t think this says a lot about the inherent goodness of people but it says a lot about the power of community.
“What’s really satisfying is we’ve created a community here,” says Bergen. “Ninety-five per cent of our customers on any given day are regulars. I have people who literally come here seven mornings a week. For them this is like going down the stairs and into their kitchen for breakfast. And then there’s another crowd – a lot of artists and writers who work at home – who come in around 10 a.m.
at least five days a week for their coffee break. We probably do more to establish community than almost any recreation centre in the area because we get to know people. I like that I can walk in anytime and it’s a place where I can belong.”
Another thing that caught my attention - the average wage. I have never been to the States so obviously I haven’t worked there so I’m not sure if this sort of salary is the norm and why it is that amount(power of unions?). But I do know this - the owner doesn’t seem to be losing money and it seems the model is profitable.
Ok. Where am I going with this. If you own a business, I guess one of the many goals you might possibly have is to make shit loads of money. You can do this in a number of ways but the basic equation is the same Revenue - Cost = Profit. So, you can either increase revenue or decrease cost.
Obviously, different businesses face different conditions which affect how easy it is to reduce cost and increase revenue. In Singapore, with our current policy of foreign workers, reducing cost seems to be the easier alternative to increasing revenue. Now, I know that there is the argument that if cost wasn’t reduced, then to make any sort of (?decent) profits, cost of products and services will go up to increase revenue and everyone else suffers. The dynamics of this is a little bit too complex to cover in one blog post so I won’t do it any injustice by trying to cover it.
What I do want to say is this in the context of Singapore. A lot of times, a decision is made on the amount of profits you as the business owner want to make. We can grumble all we like about how the government isn’t taking care of the people which isn’t true. The government just isn’t taking care of all the people. Now, the question is then this - if you are a Singaporean business owner, are you going to make the decision to make your staff more, maintain the same revenue, and take home less profits.
The idea is this. Every Singaporean has to stop thinking that the government is the only one that can help other Singaporeans. And helping other Singaporeans isn’t just about doing volunteer work or donating to charity. It is about making ’small’ decisions like how much profit you are willing to take and whether paying your own fellow Singaporeans more despite the availability of cheaper (and probably younger) foreign workers can still make you some money though not as much.
via: kottke
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