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As a restaurant owner, stepping into your accountant’s office can be the start of a nightmare, especially if it’s bad news and your business is losing money.
The good news is, it is easy to plug holes in your budget if you figure out where the leaks are. Many businesses overlook simple spending mistakes that accumulate over time and affect net profit. Clever restaurant accounting tricks will help you avoid the costs that kill so many young businesses.
So here are four ways to stop your restaurant from losing money:
Understanding your market and customers is essential for any business. In hospitality, this means offering something unique. It’s is important for fine dining, fast-food franchises, and everything in between.
Small businesses can run specials to test the water. These specials offer the opportunity for fresh social media posts — an essential tool used to monitor and participate in trends.
Being mindful of dietary requirements is also a must in the contemporary market. All restaurants should have options that cater to a growing customer base with special requirements; you don’t want customers pulled away by friends with no choices.
Healthy eating has been identified as a long-term trend, that isn’t likely to slow. To attract the customers who are turning from traditional fast-food, make sure you accommodate with genuine health options.
Don’t lose out to your competitors through stubbornness in the face of trends.
As with customers, you are in competition to retain your staff. Reliable and skilled staff are in short supply. Even if you have a good staff, bad weather, holidays and employee time off can make rostering a challenge.
Reward loyalty with raises after probation periods. This will help you keep the good, and encourage you to cull or retrain the not so good. An experienced staff will build a work culture with people who are committed to helping you improve your business.
Young people have a lower award (minimum wage), but they are also tend to be unskilled. Invest one or two young people by training them to save wages in the short-term, who will be loyal to mentors in the long term. People new to the industry can be energetic and have fewer set habits; they are shapeless clay who you can be moulded to your standards. On the other hand, a mature employee who is both experienced in the workplace and in life can make a reliable and valuable addition to any team.
When rostering, monitor busy periods on a weekly basis. Restaurants must stagger rosters:
This ensures you have enough staff for busy periods without wasting money on idle staff during down time.
Once you have been operating for longer periods of time, compare the revenue of previous years to perfect your rostering. You might have a cosy venue that does better than most in winter. Maybe you have a nice outdoor area, which draws customers in summer. You should also record the dates of annual events, which can boost or reduce customers on a given day or weekend, and roster accordingly.
Delivery start-ups are a contentious topic. Some owners contend that rates of over 10 per cent hurt profits.
But companies like Deliveroo say that business can improve sales on days such as Sunday, when fewer people eat out. These companies also provide exposure through marketing campaigns, which grow awareness.
Ensure you are making the right decision by comparing all software options, so that you can maximise on any growth that online delivery services will bring.
Tax deductions are an essential consideration in the hospitality industry. The expenses make up 86 per cent of turnover for businesses whose total turnover is between $65,000 and $500,000. Anything you aren’t claiming is eating into your profit.
Small tax rules change every year and using an accountant can help business owners stay on top of legislation. Tax advice from a recognised tax adviser is also tax deductible.
For those that don’t have an accountant on payroll, outsourcing will require that some of a restaurant’s bookkeeping, such as invoicing, is managed by the owner, so it’s in your best interests to to improve your understanding of the accounting process. This is daunting to many restaurateurs, who are typically people people, not number people.
Take the time to brush up on the basics of restaurant accounting. It will allow you to have informed discussions with your accountant and monitor the health of your business.
Being smart and aware of where your money is going will help strengthen your business, so that hopefully a visit to your accountant will be filled with good news!