How do you distribute your Tip Pools? We’d love your input on our new tip pool distribution feature!
Buckets full of (electronic) Cash!
Restaurants have always collected a Tip Pool for the Kitchen staff, and every week or two it gets distributed to the hard working crew in the back of house. The pandemic has forced the industry to rethink their method of operation and so we are also seeing an increase in Tip Pools being collected for front of house staff. Management is now handling the collection and distribution of thousands of staff dollars in multiple buckets.
This was all once done with cash. Remember cash? That’s a historical relic now; most transactions are electronic. Restaurants have been forced into acting as a bank for their employees. Most operations now find themselves routinely going to the bank to take out thousands in cash to distribute tip-out to their staff. Is this you?
Management and distribution system for tips should be electronic too. Managers need simple tools that accurately and quickly manage tips and their distribution, and it shouldn’t require regular withdrawals of gangster stacks of cash. We need to solve these problems while also building trust with staff, who want transparency in how their money is distributed.
What's your tip distribution formula?
K.I.S.S. (Keep It Simple Stupid)
The simplest and most common method is by hours worked. If you distribute tips weekly a staff member’s portion would be their hours worked (x) divided by the total hours worked by the whole crew (y). Are you using the simplest solution?
Spreadsheets are fun!
It’s tempting to make things more complicated. Perhaps the crew that works a busy Friday night deserves a bigger cut than the Tuesday lunch bunch. This method requires you track tips by the day or shift that they are collected. The math is essentially the same, except now you are doing the calculation each day. More complex, but easily accomplished with a spreadsheet, although it is more data for the manager to collect and harder for staff to understand. Are you using a hybrid method to fine tune tip distribution by day or shift?
If you really want to feel in control, maybe you add an “x-factor” into your tip distribution system. Perhaps the experienced line cook deserves a bigger cut than the pimply faced dishwasher. In addition to hours worked we can introduce a new variable, an “x-factor” that is also applied to the tip distribution math, like maybe an “experience level”: leader, staff, trainee. Do you have a variable other than hours worked that you use to distribute your tip pools?
You in or out?
Some include management (salaried) staff in the distribution of tip pools and others exclude them. How about you?
Let us know how you do things and we might build you a special tool in BlackFox to help out. Either way, we will happily share what we find out about how everyone is handling this rapidly changing landscape.Apr 12
I’m a solo entrepreneur (now with a small team). I write the software, do the marketing, mop the floors. I attend no meetings. I need approval from no one. The design work is done in my head or doodled on a scrap of paper and communicated to the team directly. We want to magnify the advantages of a small force on a larger more cumbersome opponent.
Creating shared knowledge and understanding within a group is challenging. Coordinating goals and objectives that are imperfectly understood between multiple groups of people adds another layer of complexity. Groups have different priorities and resources, their members have skills and knowledge that applies to a small portion of the whole and they lack the basic vocabulary required to understand those of the other groups. Creating a shared vision and getting all the members of a diverse and complicated organization moving in the same unified direction on any given subject is a monumental undertaking. The results are often less than ideal.
If you’ve ever worked for the government or a large corporation (both for me), you know half your working life is meetings. The main way large organizations tackle the inherent communication problem is to gather people together to talk. Significant effort is expended just on the systems used to book a space and time for the people to gather and on the technology they use to talk. Volumes have been written on the inefficiency and uselessness of business meetings, but I don’t have to convince you, you’ve been in those rooms, wondering, “Do I need to be here for this?”
A small team can all sit in a room around a white board and hash things out over lunch. They lack the communication problems inherent in large diverse groups. Small teams have meetings too, but all the decision makers and doers are present.
The old adage that two heads are better than one; it works for a small group, but 10+ heads do not produce 10x results, instead they find a median approach. As Paul Graham alluded to, large organizations create systems to eliminate risk, because they can’t afford risk, there’s too much at stake. But change is risky, innovation is risky.
A small team can make a decision to make a feature change on Monday, start it on Tuesday, and have it in front of customers by the end of the week. It’s a ruthlessly efficient process for developing and testing new ideas and the speed at which they can move helps manage the risk.
Working in a small team comes with a long list of challenges, but the agility with which you can move is unparalleled. Modern technology allows an individual with a modest set of skills to design, build, and deploy a software product to a global market in a matter of days for less than $100. People inventing things in their garage have unprecedented power to create new products.
Large companies entrenched in the market you are interested in look impressive and forbidding, as inevitable as a mountain. The truth is that they have never been more vulnerable. Working a few hours on evenings and weekends you can make as much progress as an international organization with a budget. It’s counter-intuitive, but true anyway. Don’t be afraid of the big guys, keep working on that side project.
Guerrilla Strategy and Tactics
guerrilla: noun - a member of a small independent group taking part in irregular fighting, typically against larger regular forces.
Guerrillas work at the edges, avoiding direct confrontations, moving into blue oceans. What aren’t your competitors doing? Can you eliminate competition by moving in a direction that they are not? What features do they all have that are expensive to build and maintain? Can you make a leaner product that eliminates their bloat? What you don’t build is as important as what you do.
The web allows you to reach a large number of people and win support and influence. You don’t need a large audience to test ideas; find a niche. Being successful does not require a large market segment when the whole world is your market, a tiny percentage is good enough to test, a couple points and you’re making a living.
Guerrillas use captured resources in their fight, utilizing the enemies own weapons against them. Steal your competitors designs! What are they doing well? Can you adopt winning ideas, functionality, or design elements? As artists, software developers, and guitarists all know; everything you make is derivative, building on what’s been done. Don’t be shy about borrowing good ideas.
Guerrillas use the environment to their best advantage. What can you farm out to 3rd parties? We are in a unique time. You have the same access to resources as your larger adversary. Amazon Web Services, for example, gives you access to the same incredibly powerful cloud server architecture and tools that the largest companies in the world use. Take advantage of the incredible infrastructure that you can tap into.
There has never been a better time to be a maker. You have immense power to create things and get them to market. Technology and innovation have provided you with levers big enough to move the world. Goliath is plodding and slow, so grab your sling shot and go take on that monster.Mar 10
I’ve made my podcast debut! My good friend Ally Stone hosts a Discovering Hospitality podcast where she discusses the restaurant industry and its quirks and joys with her guest. Ally is genuine and heartfelt in all her endeavours and it’s always a pleasure to hang out with her.
I had no experience in hospitality, service, or the food and beverage industry before I opened a restaurant, so Ally asks the obvious question, “How did you end up owing restaurants?” We had a great chat about the challenges of dealing with people, my impressions of the industry as an “outsider”, my experience opening 2 restaurants and building the BlackFox software to run them, and my career as a circus performer. You should check it out.Feb 09
We are please to announce our partnership with XTM Inc, a leader in mobile banking and payment solutions. BlackFox and XTM are teaming up to bring cash-less tip distribution to the BlackFox cash-out system.
Historically, restaurants dealt in a lot of cash, and Servers and Bartenders have traditionally ended their shifts with a pocket full of paper money. Cash has been losing favour as a payment method for decades and the restaurant industry has slowly been transformed by this changing reality. COVID has accelerated this evolution and virtually eliminated cash overnight.
The movement to a cash-less world has put restaurants in an awkward position. Servers and Bartenders are owed their tips at the end of a shift, but there is no longer cash coming in. The available solutions are not attractive; we can add tips to the companies payroll process, a route that adds complexity and invites a very unwelcome tax man, or the restaurant must routinely withdrawal thousands in cash from the bank to pay-out their staff.
The XTM TipsToday system provides a new and better alternative; a digital gratuity payout. They issue restaurant staff with a plastic card which the business can load funds onto. The staff member can use it as a credit or bank card. There is no cost to either the restaurant or staff for the service, XTM makes their money through fees that retailers already pay for credit card processing. It’s a simple, convenient, low cost solution to the problem of a cash-less world.
The BlackFox cash-out system already saves restaurant owners and managers time and energy by simplifying the daily cash-out process. BlackFox is well received by restaurant staff because it manages staff tips with accuracy and transparency. We are excited to work with XTM to provide this new cashless method to issue tips to restaurant staff, furthering our mission to make running a successful restaurant just a little bit easier.Feb 08
I’m lazy and selfish. I don’t want to spend time doing things I don’t like. My mom likes to tell people that when I was a teenager I’d spend 10 minutes arguing with her about the best way to do a 5 minute task. Now I do that professionally; I fight to make your job easier.
I started my career being the best in the office at Excel, then to my delight I discovered databases, and eventually graduated to building web applications. My intention was always to solve my own problems, to make my day easier. I made good tools, useful for my job, so inevitably the rest of the office would adopt it. My career path is a trail of systems I built and left behind for those who followed.
Most systems are designed for the people at the top of an organization, they don’t help the people at the bottom, the ones doing all the work, in fact they add to their list of tasks required each day. The resulting system is hated by everyone working in the trenches because it doesn’t help them, it adds to their already busy day. The organization tries to implement a system that produces major friction from the people expected to use it everyday.
This resistance means that middle management must take on the role of enforcer. They spend their day pressuring subordinates into using this new burden, but the moment that pressure disappears, because middle managers have their own jobs to do, the system is ignored en masse by the workers, which means the reports and data senior management was looking for in the first place are late, incomplete, and inaccurate. Designing organization wide systems from the top down is a recipe that produces an expensive thing no one likes that solves the original problem poorly.
We design software from the bottom of an organization upwards. The primary objective is to help people do the work. What managers at the top of an organization want to know must be a result of the activities being done by the people working at the bottom. If you help people do the day to day work, you inevitably help the organization as a whole.
The added benefit of this philosophy is that the people at the bottom of an organizational pyramid cost less than those on top. Why pay a premium to have administrative or management staff enter data when minimum wage employees can do it as part of their job? Providing quality tools to staff can simplify a task, and that makes their job easier and prevents errors, which in turn reduces the effort and time requirements of managers, bookkeepers, and owners. The entire organization benefits by helping workers do their everyday jobs. That’s where problem solving needs to begin, at the bottom.Jan 25
When you start a job, they give you a black box, metaphorically. Manuals, policies, procedures, spreadsheets, and templates. The box defines your job, which is to turn the crank on the box and produce reports, or sales, or widgets, or code, or... whatever.
On the second day at my new job I say, “Super excited to be here. I’ve been thinking about that black box. Have you ever tried it with rounded corners?”
Well, they haven’t, because the box works fine, great even. They’ve been using it for a decade, everyone is familiar with it. Why would you change the box?
That makes sense to me, and I like the job, so I keep turning the crank. But, as every day passes I become more confident, the box will work better with rounded corners. It starts as a curiosity and develops into an obsession, so I keep bringing it up. I can appreciate how that’s annoying.
I understand the argument for the status quo. Companies have momentum, there is value in consistency, changes cost time and money. I also believe that if your business isn’t evolving, it's dying. I’ve become sure that being a catalyst for change is where my value lies, and that I can’t help myself anyway, you can’t fight your nature.
There is a movement around starting a business designed to evolve. You begin with an idea to fly in the face of convention and build a grey rectangle, but you know going in that the plan will change, that the plan is to evolve the plan. You start with a grey rectangle, you build a prototype, put it in front of customers, test it, and you evolve it into a translucent green sphere. It’s a siren’s song luring many an inventive adventurer.
Entrepreneurship is a strange journey to volunteer for. Three of four startups end in failure. It’s a foolish thing to consider, yet it’s an alluring idea. You have to reach a point in your life where you would rather fail doing your own thing than succeed turning the crank on someone else’s black box.Dec 08