Renew Your Appetite
CPA firm shares appetite for success for new and existing restaurant owners
In 2007, restaurant
sales are expected to reach $537 billion, with
more then 12 million employees serving more than 70 billion people in
nearly million locations, making the industry the largest employer besides the government. *
However, statistics show that somewhere between 50 to 80 percent of all new restaurants will fail to be part of that success before they reach their first year anniversary. Why?
Often the cause of the crash is not the quality of the cuisine or service, the effort and talents of the people, or the public relations and marketing.
It is quite simply a financial breakdown – either running out of money or not planning effectively from the beginning.
Lost profits and disappointment can be avoided with successful planning and financial advice throughout the development of your restaurant business. Here are a few tips to keep in mind whether you’re a first-time restaurant owner, opening a second location, or simply desiring higher profits.
Choose Your Manager Carefully
The manager must understand the basics of accounting systems. Restaurant managers use financial information to manage activities involving money that is earned and spent in the restaurant.
Balance sheets, profit and loss statement, and cash flows are among the most important reports that managers, owners, investors, government agencies, financial institutions, and others use to learn about the financial status of your restaurant.
A good CPA will organize, analyze, and report financial information. A good manager should be able to understand and use that information to make informed business decisions.
Build Motivation Among Employees
Remind your staff of the ultimate goal of the restaurant: to make a good profit. Keep them abreast of what’s going on. Share the numbers. Let them know how much profit the restaurant has to clear to be successful, and explain how their actions contribute to that profit. Make them feel important in your business, because they are.
Consider letting your CPA come talk to them about why a more profitable restaurant is in their interests. Better business means better wages. The success of your business could lead to increases in salaries and bonuses, as well as create insurance against layoffs. Implement a plan for sharing part of increased profits with employees through gift and other incentives.
Consider Your CPA a Member of Your Management Team
An accountant isn’t just there to help you manage your money. Your CPA is a great resource to you, your investors, and your management team for business valuation and consulting. She or he can advise you on the best way to arrange additional finance without putting your business at risk. Whether you need to organize your financial statements, present an audit to potential investors, put away money for retirement, or aren’t sure whether to buy or lease a car, your CPA is an invaluable year-round resource.
It’s essential to ensure growth of your business is handled in the right way. Your concerns will most likely be financial - adequate working capital, good stock control, invoicing and so on. An experienced accountant’s advice will be invaluable in such matters. Taxation is a large business expense too, and an accountant can effectively minimize these costs.
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Sunday, September 05, 2010
