Unbiased operators get a failing grade on an enormous situation: They don’t have readable monetary statements. For the second, I gained’t even think about the issue of getting data too late to be of any actual assist.
Some operators simply depend on their accountants to work up the figures and settle for what they’re given. Now CPAs are good individuals, however they’re into numbers, not operations. So long as the numbers steadiness and are stored in accordance with commonplace accounting rules, their work is completed. They don’t seem to be entrepreneurs and (bless their hearts) seldom think about whether or not the numbers they supply are useful.
Living proof: A P&L assertion ought to listing percentages in addition to greenback quantities, however too many of those paperwork use gross receipts (gross sales plus gross sales tax) because the divisor when computing their expense percentages. This skews the odds and offers a 6- to 8-percent false sense of safety.
The subsequent commonest error is that meals value percentages needs to be meals used divided by meals gross sales, not divided by complete gross sales. Equally, for those who function a bar, bar value ratio needs to be to bar gross sales, to not complete gross sales. Some accountants simply do what’s best for them. It goes on and on. In case you have by no means taken a fundamental accounting course, it’s time you probably did that. Then make sure you use an accountant who understands the restaurant trade, not simply accounting practices. Lastly, insist that you just get numbers in a format that can let you rapidly perceive what is occurring in your online business.
Positive, it could take slightly additional effort to coach your self sufficient to understand how the numbers go collectively and what they imply. Keep in mind: EO’s make pizza –– CEO’s make cash. ?
Large Dave Ostrander owned a extremely profitable unbiased pizzeria earlier than changing into a guide, speaker and internationally sought-after coach. He’s a month-to-month contributor to Pizza Right this moment and leads seminars on operational matters for the household of Pizza Expo tradeshows.
