Sometimes, you end up selling alcohol at a loss. Not legal in Sweden. Bad for business. Don’t do it. Regardless of this obvious fact, our pub has done it TWICE.
5 years ago, our organisation went nearly bankrupt because our Financial Officer and Beer Responsible had a falling out. They ignored each other, failed to communicate and set the prices which did not account for the sales tax. Our bank account ended up being nearly cleared out and the chairperson had to kickstart our beer supply with his own money.
5 years later, we basically repeated the same mistake. And we did it while being perfectly aware of this happening previously. Actually, we joke about it quite regularly.
Luckily, this year our Financial Officer and Beer Responsible can’t have a falling out and not talk. Both of them are me. And my wacky brain is good at spotting numerical oddities. The per bottle price of our invoice was a bit too close to our selling price.
TLDR: publicly listed price != purchase price. Sometimes purchase price is larger. Beer responsible set prices according to public price. We lost money.
Let’s start by examining how our beer prices used to be set after the first time the mistake was made.
What happens if the public price is not equal to the purchase price, especially if the public price does not include the 25% selling tax? We don’t make any profit, plus accrue costs due to delivery fees, etc.
This is exactly the situation we have found ourselves this past week. So I reworked how the prices should be set.
Problems was that beer-responsible doesn’t usually see the per bottle purchase price from the invoice. Handling invoices and the economy is responsibility solely of the Finance officer, who historically didn’t have the responsibility to double-check the prices.
Running a bar is not complicated, although one can make many silly mistakes. We are all just nerdy university kids with no prior experience, giving it our best college-try.
And the previous beer-responsible could not know that the publicly listed price on our suppliers webpage matches the purchase price only half of the time. With no rime, nor reason. I’m talking about you, Galatea :^)
But the pub did get fooled by the same mistake twice, and as the proverb suggests - the shame is on us. I think the biggest mistake was not that we did not learn the lesson, we didn’t fix the root cause. (Nor did we fix the environment in which this mistake can happen again and go on unnoticed, but let’s not talk about that right now…)
While thinking about this I was reminded of a book I read a few years back, namely the Toyota Way to Lean Leadership (by J.Liker and G.L.Convis). The authors outline how perspective managers at Toyota get educated in seeking an optimal solution for root cause of problem. The perspective manager comes back to his superiors with solutions which seemingly solve the root cause, but gets sent back to refine the solution to be more in line with the Toyota way.
Oki, but what do we value in this solution?
Ye, I guess.
So here is my solution: Prices should be set by the Beer-Responsible. But they must go through the invoices before handing them off to the Finance Responsible. I think it is reasonable.
Tbh, remembering this book has really made me want to try and implement on-demand production line in the brilliant video game - Factorio. But that is for another day.
Thanks for reading my surface level meditations. I found this situation oddly amusing, so decided to write it down. This might have been mildly illegal, but the alcohol authority doesn’t notice these small mistakes anyway. What kind of idiot would be selling alcohol at a loss??