Posts Tagged ‘Loss Accounts’
Several magazines have been running features from me over the last couple of months. One in particular appeared in Pizza and Pasta as well as their Cafe sister publication. In case you mised it we thought you might find the following interesting: In any business it is control that counts, control of the figures, control of the staffing levels and control of the stock… Unfortunately, restaurants and take-aways are not always easy to control, so I would strongly recommend using a good book-keeper to keep control on your figures. My suggestion has to be that you do monthly profit & loss accounts as a minimum.
Even with monthly or quarterly P&L accounts, the very best way to make sure that your business is profitable and under control is to monitor key figures on a weekly basis. I advocate tracking sales, gross margins and wages every week. Comparing with last year’s figures is a very useful thing to do as well, because of the benchmarks such data can provide.
One of the businesses that we are very proud to support is a restaurant in the South East. This financial year they will make a profit of over £50,000. Last year it lost over £30,000. This is the same place, run by the same team. The one major difference is that this year there has been ongoing monitoring from both them and us on a weekly basis, enabling the operator to react and respond very quickly to any changes.
So you think you want to buy or run a Pizza business? It will be a challenge, but you can succeed if you follow four simple rules: • Do a business plan before you start and make sure it is viable • Do regular monthly management accounts • Employ a good book-keeper • Monitor your business’s performance weekly
Carrying out these basic steps will give your business the very best chance of being profitable, and staying that way.
Several magazines have been running features from me over the last couple of months. One in particular appeared in Pizza and Pasta as well as their Cafe sister publication. In case you mised it we thought you might find the following interesting:
Once you’ve bought the business and moved in, or found and converted the premises, you’ll be very busy working on all the day-to-day jobs but the danger here is that you might lose focus on the figures, so ensure that you get regular profit & loss accounts… and make sure that the figures generated are those that you need.
For example – yes, we need to track sales, but we also need to track carefully the gross profits that we make, as these can mean the difference between the business working or failing. I have seen countless businesses that had good sales, but poor gross profits. As a result, no matter how high the sales, the businesses just were not going to make a profit. Ultimately, if you reduce your prices to increase sales, you need to be careful, it won’t matter how high the extra sales are if you have eroded all your profit. Also bear in mind that, the higher the sales, the higher your wage costs are likely to be.
We all tend to think, for example, that pizza businesses make a lot of profit. And indeed, they can do – in the right hands. The companies that run these businesses as chains have highly developed costing programmes, and their portion control is almost perfect. But be warned – as a small independent operator, you certainly can’t compete with them on price – you will be paying a lot more for your food ingredients than they are, and it is also likely they will be a lot more controlled about their wage costs.