There’s a reason why restaurants are everywhere. The hospitality industry is one of the most lucrative out there! But the truth is, behind all the fun customer experience and a unique concept, there is something not everyone can see – the industry is very dynamic and prone to challenges such as increasing labour cost, competition, inflation, decreasing margins and slowdown in consumer spend.
It is not a dreary aspect, though! You can still run a successful business with careful planning and clever execution.
Hospitality accountants
As accountants, our first tip on how to run a successful restaurant is to keep your costs in check. Fixed costs can include rent, loan repayments and insurance, while variable costs can include electricity, wages and ingredients. You need to optimise your margins and reduce these costs without compromising quality. Look for a supplier who offers the best deals or choose a location with lots of natural sunlight and air to save on your electricity bill. You can also employ temporary staff during non-peak hours and keep permanent ones only for busy hours. Try to negotiate your rent as well.
Another thing to keep an eye on is your stock and inventory. Make sure your pantry is well-stocked and running smoothly with an inventory sheet that’s updated daily or weekly, depending on the size of your restaurant. Apply the first in, first out method and make a list of your fast and slow-moving items during peak and non-peak hours. This can help you forecast when you need replenishing to avoid overstocking. Remember that an outdated price list of your food items or faulty weighing scales can increase your costs significantly!
Cash is king for restaurants
Don’t forget that cash is king and knowing how much money you need to open a restaurant is just the tip of the iceberg. You need to know how much money your restaurant needs to gain momentum, considering that it may take months before it breaks even and becomes profitable. This is where restaurants often make or break. Seek the help of a professional to figure out your capital needs and operational costs and expenses.
General waste is the most expensive waste for restaurants, so find ways to reduce it. Food excess can be made into unique dishes that you can sell and even market as a house special. Weigh your food waste and go to compost to utilise it. Recycle glass or cardboard for your suppliers to reuse. This can even improve your relationship with your suppliers and reduce your carbon footprint! Look at your bin and see where you can reduce and save money.
Lastly, now is the time to integrate your restaurant with technology not only to attract more customers but also to help you run your backend efficiently. A good POS system can manage your daily operations, including inventory, staff scheduling, invoicing, payroll and cash flow. It can also reduce paperwork and human errors. Other features you can use are online reservations, mobile ordering, contactless payments, etc.
Hospitality accounting
We could yarn about hospitality for hours, but how about you pick up your phone so we can give you a step-by-step account of your unique situation, and how we can help streamline it? Give us a buzz here and let’s get you all set up!
Your Outside Team
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Address: Level 2, 182 Vivian Street,
Te Aro, Wellington 6011, New Zealand
Mail: PO Box 24-457, Wellington 6142
Phone: 04 889 2975
