1. 1 Chapter 26 Services

2. 2 Questions to Ask First Fixed vs. variable costs Fixed vs. variable costs Should I buy or should I do it myself Should I buy or should I do it myself –Cost/benefit analysis Outsourcing Outsourcing –Moonlighting –Evaluate provider’s background and performance What is included in the lease contract What is included in the lease contract –CAM

3. 3 Services Waste Removal Waste Removal »Example: http://www.russellreid.com http://www.russellreid.com –What is offered by the CAM –Pickup schedule –Grease traps –Recycling Financial Financial »Example: http://www.Restaurant-accounting.com or http://www.virtualrestaurant.com http://www.Restaurant-accounting.comhttp://www.virtualrestaurant.comhttp://www.Restaurant-accounting.comhttp://www.virtualrestaurant.com –Banking –Loans –Payroll management

4. 4 Services, Continued Groundskeeping Groundskeeping –Common in CAM –Landscaping »Snow removal »Be specific Pest Control Pest Control »Example: http://www.ecolab.com http://www.ecolab.com –Use Licensed PCOs »Weekly or monthly appointments

5. 5 Services, Continued Advertising Advertising »Example: http://www.quantifiedmarketing.com http://www.quantifiedmarketing.com –Newspaper and magazine –Radio and television –Brochures and flyers –Phonebook Typically cost is based on circulation Typically cost is based on circulation Sponsorship of a local team Sponsorship of a local team

6. 6 Services, Continued Consulting Consulting »Example: http://www.drvdesign.com or http://www.foodinsight.net http://www.drvdesign.comhttp://www.foodinsight.nethttp://www.drvdesign.comhttp://www.foodinsight.net –Designers –Feasibility researchers –Computer specialists –Environmental assessors Insurance Insurance –Healthcare –Property damage –Liability Insurance

7. Services, Continued Payroll Payroll »Example: http://www.adp.com http://www.adp.com –Control payments to others »Federal taxes »Social Security tax »Medicare tax –Accurate reporting of payroll expense –Controls skimming by payroll clerks 7

8. 8 Services, Continued Linen Linen »Example: http://www.national-linen.com http://www.national-linen.com 1.You can buy your own and use a cleaning service 2.You can rent linen 3.You can buy your linen and create a cleaning facility Other Other –Cleaning –Knife sharpening

9. 9 Copyright ©2008 John Wiley & Sons, Inc.