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FROM THE FIELD
August 2008
You Can Jump Now
You know that story about the frog and the pot of hot water? It says if you put a frog in a pot of water and turn up the heat slowly enough, the frog will never jump. It'll cook before it jumps.
With that in mind, maybe you should feel free to jump any time now. Jump for anything and everything that can save you ops money down the road.
Not a panicky, rushed jump. But a well-timed, purposeful, nicely executed jump—perfect form, nice extension, like you'd do if you were an Olympic diver or a left fielder timing a leap to snag the fly ball up over the wall. Or if you think of it as a fire drill, it's the walk-don't-run, orderly kind. If you wait until later, it'll be more of a scramble, and, well, don't.
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"You know that story about the frog and the pot of hot water?"
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Why now? Well, it could've been earlier, but now is much better than later. You have a real serious need, and right now the government's stimulus program gives you tools for capital investment you'd normally hold off on.
The crunch is on, as you know if you have a pulse. Costs are up across the board. Food prices are climbing more steeply than they have in 30 years, the spooky details of which Robin lays out in his column this month. Energy and water prices are rising. The minimum wage isn't as minimum as it used to be. Healthcare, forget about it. So costs are a problem.
Meanwhile, revenue growth isn't likely to be your answer. The general economy has all it can do to hover. It won't quite go down and can't quite get up. Consumers feel crummy. Media reports about gasoline prices are everywhere, but quoting percentages doesn't paint the whole picture. Consider: In July 2005, people in the Chicago suburbs, for example, were paying $2.39/gal. for regular, more or less. Early July this year, the figure was about $4.20. Figure a typical average of 20 mpg, 15,000 miles per year. That's 750 gals./year. The cost-increase on that volume is $1,357.50. Is there a second car in that family? Enough said.
Fortunately, you do have tools. Equipment suppliers have made huge strides in recent years with utility efficiency, both water and energy. The Energy Star program has helped, with energy-efficiency programs for solid-door reach-ins, fryers, steamers, hot-holding cabinets, warewashers and ice machines, with more categories on deck. In all, about 65 foodservice equipment manufacturers have about 2,000 models now certified. On the water side, WaterSense is labeling water-saving products in toilets, faucets and irrigation systems. For complete listings, you can check out www.energystar.gov/cfs.
And if you're looking for rebates, the good news is that they're all over the place these days. A handy directory is maintained at www.energystar.gov/cfsrebate_locator
And finally, when your financial team says there's no capital budget for anything, remind them there are a bunch of handy breaks for equipment in the Economic Stimulus Act of 2008.
To help businesses do exactly what you're doing, the stimulus plan provides a one-year, 50% bonus depreciation, which will allow you to write off half the cost of new foodservice equipment purchased and put into use in this calendar year.
Also, the cap on how much equipment can be purchased to use the write-off has been increased to $800,000, up from $510,000. To find out more, go to www.irs.gov/newsroom/article/0,,id=183867,00.html.
So get on it. That pot of water's getting awfully hot. Just because our auto industry couldn't figure out when to jump doesn't mean you can't.
Brian Ward
Chief Editor
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