Video courtesy of our friend Ryan Gromfin of The Restaurant Boss
IndicatorsAverage pre-tax profit margins typically range between 4% for Full Service and 7% for Limited Service restaurants
(2004 Restaurant Industry Operations Report published by Deloitte & Touche LLP). This does not leave much room for
financial management missteps.
Time critical and accurate financial information has never been more important to the success in the current market.
However this needs to be done without any unnecessary fuss or added pressure to staff.
Research over a 10 year period has shown that:
After the first year 27% of restaurant start-ups fail.
After three years, 50% of those restaurants were no longer in business.
After five years 60% had had closed.
At the end of 10 years, 70% of the restaurants that had opened for business a decade before had failed.
Another academic research study concluded that 81.4% of all small business failures result from forces within the control of the owners/managers.
However – even if the failure rate is a little daunting, failure is not inevitable!
Where have you heard these words?
“My place is full, but I have no idea if I’m making money”.
“Sales are up but I’m struggling to make payroll”.
“The food is great, the service fabulous and the restaurant is busier than ever – but why is the bottom line not what it should be”.
10 ‘Red Flag’ indicators to potential disaster:
- Absence of a well organized and implemented accounting system
- Key operating expenses too high relative to gross sales
- Menu items not accurately documented, costed and updated
- Inventory levels not counted and costed periodically or recorded in accounting software
- Food and beverage inventory levels too high relative to corresponding sales
- Daily & weekly financial operating data not collected, reviewed or acted upon
- Inaccurate posting of financial information to your accounting system
- Current liabilities sufficiently greater than current assets as to impair future ability to pay bills
- Owner relying on online bank balance to determine available cash to pay bills
- Overall lack of understanding as to how to read and interpret Financial Statements
By receiving accurate and detailed financial information on a timely basis operators are able to quickly identify problem areas and respond accordingly simply by knowing their numbers.
These Red Flags are totally avoidable!
Contact Us for More Information
Because we care, there is no time limit for our first consultation. We want to fully understand your situation and offer a solution if we can.
We can help you achieve the financial results you have been striving for. We have the tools, collective expertise and state-of-the-art restaurant specific software.
We hold your hand throughout the whole process and do all the work for you.
We deliver the financial information you need daily directly to your inbox. Leaving you the time and effort to adress the key areas of your business without having to do any accounting (or anything else). You use your valuable time to run your business.
All this for an affordable monthly fixed fee
Contact us now. I will personally get back to you within 48 hours