I went to lunch the other day at my local fast food sandwich shop. I won’t say the name of the chain because they don’t pay me for an endorsement (YET!). Let’s just call them Hoagie Way.
I was standing in line behind a boy who couldn’t have been older than 7 or 8. I was caught off guard for a second because he was by himself. Evidently it was one of those teacher workdays for the county schools, so he was apparently on his own for lunch that day.
As he got up to the counter, he ordered a footlong ham sandwich. (I was impressed because that’s quite a meal for such a little dude!)
When the boy was asked if he wanted anything else on the sandwich besides the ham and cheese, he went down the line, topping-by-topping, and asked everything. (The profit margin on that sandwich had to be next to nothing!)
A teenage girl was working the cash register that day. When it was the boy’s turn to pay, she flashed him a quick smile and asked him what kind of sandwich he got. He confidently said, “I got a $5 footlong ham sandwich!”
She hit a few buttons on the register screen and replied, “That’ll be $5.25 please.”
The boy’s confidence seemed to be pierced when he heard the price. He reached into his pocket and pulled out a wadded up $5 bill. “Wait, I only have $5. I thought this was a $5 footlong.”
The cashier apparently saw the boy getting flustered, so she leaned a little closer and said “You’re right, the sandwich is $5, but I have to charge you sales tax. That’s why it’s $5.25.”
In a borderline whimper, the boy said, “My mom only gave me $5 for my lunch today.”
The cashier looked panicked because the line was backing up and this little boy was on the verge of tears. I put my sandwich down on the counter and started to dig through my pockets for a quarter.
Before I was even able to find a single coin, this youngster reached over to the tip cup and helped himself to a quarter. He said, “My mom always leaves change in this jar, so can I use some of it now?”
Surprisingly, the teenage girl didn’t mind. She flashed him a smile and he went over to a table and attacked his sandwich in a manly fashion.
Watching that whole scene play out really hit home for me. I’ve helped a lot of clients who only had a lonely $5 bill wadded up in their pocket when they wanted a ham sandwich. Unfortunately, most of them couldn’t reach over the counter to snag a quarter from the tip cup when it came time to pay.
Instead of working with $0.25 in sales tax, my clients tend to talk about $2,500 $25,000 or even $2,500,000 at a time (one time on a huge M&A deal). Forgetting about 5%-10% of your costs can cause financial catastrophes for budgets and profit margins.
If you plan on buying lunch tomorrow, make sure you remember to grab a handful change before you leave for work. If you’re not sure how much change to grab – I’ll be happy to help you crunch some numbers!