Not just a drop in the bucket Featured

10:08am EDT July 22, 2002
Brian Gibson, owner of the three Gibby's restaurants in Columbus, says he's probably like most bar and restaurant owners who understand they may lose a little of the profits they could be taking in. Spillage, theft, mistakes and poor records, after all, can be part of day-to-day business.

So although he was skeptical, about four years ago, Gibson let Chuck Deibel, owner of a local Bevinco franchise, audit the bar operations at the Grandview Gibby's. Using electronic scales, a notebook computer and a software program, Deibel conducted a one-week audit that showed figures Gibson says he never would have suspected.

"It was $2,500 to $2,700 worth of actual dollars that I was losing from the customer," Gibson says of the Grandview restaurant audit. The loss equaled 8 percent to 10 percent of the week's business.

Gibson knew he'd have to take those numbers and do something with them.

"To get this information doesn't mean anything if you don't act on it and tell people what's going on," he says, referring to his employees.

With Deibel's help, Gibson has corrected problems to a point that now he's losing less than 2 percent at the Grandview location, and he's instituting measures to prevent loss problems at his newest Gibby's on Riverside Drive. His German Village restaurant has also been audited to reduce losses.

"A bar can make or break you in this business," Gibson says. "The bar end is where you can make a lot of money and pay your bills."

A better measure

Gibson previously took inventory the way most people in the business do: counting bottles, lifting kegs to estimate whether they were half or three-quarters full, and eyeballing liquor bottles to determine how many tenths were left.

Deibel's method, on the other hand, was much more precise. He uses scales to weigh every keg, accurate to within 3 ounces, and each liquor bottle, accurate to within one-hundredth of an ounce. A computer analysis shows the exact amount of product that should have been used and compares that to the product recorded in Gibby's register. Deibel's computer program also converts those figures into dollars.

Audits typically take two to three hours to complete at a cost of $50 per hour.

In his four years of owning the Bevinco master franchise for Ohio and Indiana, Deibel has himself been shocked by the results he's seen after audits of his 40-some clients, which include the Bogey Inn, Buckeye Hall of Fame Cafe, Damon's and Spagio. When he first started the franchise, he thought he would uncover $400 to $500 in weekly losses rather than the thousands of dollars he sees in some audits.

"They'd pay us $100, $150. From a business standpoint, that's a pretty good return," says Deibel, a certified public accountant and business partner with experience in the restaurant industry. His parents owned the former Deibel's in German Village.

Yet even before he conducts an audit, Deibel is often met with skepticism.

"They think I'm scamming them," he says. "People have this mentality that if they haven't heard of it, it must be a scam. Everything new goes through that stage."

Gibson also was skeptical, but because Deibel's wife was a high-school classmate, he trusted Deibel and tried the program.

Stopping the leak

Gibson started his quest to reduce his losses by sharing Deibel's audit information with his staff.

"I've never told my staff you can't ever give anything away or overpour. If something happens and we screw something up, as long as we write something down, that's my biggest thing right now," he says of efforts to keep better inventory.

"There was a combination of staff giving it away and some of them walking out the back door-bartenders, waitresses being able to smuggle a beer or two to their friends," he says.

As soon as his staff knew about the Bevinco audits, the problems subsided. He also moved product from where it had been stored near the back door so that it wouldn't be so easy to steal.

Gibson saw improvements within the first two months of Deibel's work.

For Gibson, the primary benefit of Bevinco's ongoing audits has been a sense of security. He splits his time between his three establishments, and now he can hold his managers and bartenders accountable for results in his absence.

"I can't be here all the time," Gibson says. "It's a great way for me to look at this and go to my managers and say, 'This isn't good. This doesn't make sense.'"

Deibel says that the first few audits took about four hours each week or every other week; now he does two audits a month at two to three hours each at Gibby's Grandview.

Daily audits also are possible, and if Gibson requests it, Deibel also could personally monitor individual bartenders' actions. So far, Gibson has never requested this because he's had success with simply letting his staff know about the audits.

Because of variables in the food portion of his business and because liquor sales vary so much, Gibson says he can't directly attribute to Bevinco any profit gains at the Grandview Gibby's, which he expects to bring in $1.3 million in net revenues this year.

"All I know is I'm not losing as much as I was," he says, "and on a biweekly basis, I can control that.