For business owners, freedom is multi-faceted.
There’s time freedom, financial freedom and mental freedom, each of which feed into each other.
Without time freedom, you can’t enjoy a balanced lifestyle.
Without financial freedom, you’ll always be working to make ends meet and lack the ability to take time off or invest in your future.
And if your mind is constantly bogged down with work worries, you’ll never have the mental freedom to truly enjoy your life.
In the food and beverage industry, business owners often find themselves caught in a vicious cycle of long hours and little return.
But it doesn’t have to be this way.
The second pillar of our signature SPE method is performance. By following the steps outlined below, you can start to improve your food and beverage business performance today and work your way towards freedom.
With more time on your hands, more profit to reinvest in the business and greater peace of mind, you’ll be well on your way to a brighter future.
Step #1 – Cash Flow
Cash flow is the lifeblood of any business, but it’s especially important in the food and beverage industry.
There are so many moving parts and variables – from supplier payments and staff wages to the cost of ingredients and rent – that it can be hard to keep on top of it all.
If you want to improve your food and beverage business performance, optimising your cash flow is an excellent place to start.
For one thing, building a healthy cash reserve creates much-needed peace of mind. It gives you a buffer to fall back on in case of unexpected costs or slow periods, and it means you won’t have to take on debt to meet your day-to-day obligations.
Furthermore, improving your cash flow can help you to reduce debt and free up capital to invest in expansion or further developing your operations.
It also grants you greater time freedom because you waste less time chasing payments, calculating how to make ends meet and worrying about money.
There are a number of ways to improve your cash flow, but some simple steps include:
- Reviewing your pricing strategy and making sure you’re not leaving money on the table
- Streamlining your accounts receivable process
- Automating bill payments where possible
- Building reserves to protect you from loss sales periods
- Weekly net cash flow monitoring
- Creating a realistic cash flow budget
- Improving inventory management to reduce waste and free up working capital
Step #2 – KPI Monitoring and Tax Planning
KPI monitoring and tax planning are closely related in that they both require you to take a close look at your numbers and understand what they’re telling you. They also both play a crucial role in improving your food and beverage business performance.
It’s vital for F&B business owners to know how their business is performing, but this can be difficult to gauge when you’re in the thick of things.
This is where key performance indicators (KPIs) come in. By tracking the right KPIs, you can get a clear picture of how your business is doing and identify areas that need improvement. Think of it as a tool that empowers you to remain firmly in control of your food and beverage business.
There are a number of different KPIs you can track, but some key ones for the F&B industry include:
- Food cost percentage
- Labour cost percentage
- Average spend per customer
- Gross profit margin
- Sales conversion
- Sals covers
- Cash burn rate
- Customer acquisition cost
Regularly reviewing your tax efficiency is another crucial strategy for enhancing your business performance.
It’s key to work with a specialist who understands your numbers in the wider context of the F&B industry, because averages vary hugely across different sectors. An industry expert will be able to help you understand how you’re performing in relation to similar businesses and offer relevant and targeted advice.
Tax planning is an ongoing process that involves taking a proactive approach to minimising your tax liability. This might involve restructuring your business, utilising tax-effective investments or taking advantage of government incentives.
This is why it’s essential to work with a specialist accountant or advisor who can help you to minimise your tax bill and maximise your after-tax profits. Tax incentives and strategies can vary hugely between industries, and even between different types of businesses in the same industry, so it really does pay to seek expert advice.
Step #3 – Continuous Refinement
The food and beverage industry is constantly changing, which means that even the most successful businesses need to continually adapt and evolve.
This is why continuous refinement is such an important part of improving your food and beverage business performance. It’s about continuously looking for ways to improve your processes, products and services and making changes where necessary.
You need the unwavering support and guidance of an experienced team to help you navigate the challenges of the F&B industry. This might include a business coach, mentor, consultant or specialist advisor.
The right team will challenge you to think outside the box, push you out of your comfort zone and help you to take your food and beverage business to the next level.
They will also help you to stop simply dreaming about growth and think about it in a realistic and practical way. They will give you the tools and strategies you need to make your food and beverage business successful, while making you feel calm and in control throughout the journey.
In order to improve your food and beverage business performance, it’s important to optimise cash flow, monitor KPIs and plan for taxes. Additionally, you need to continuously refine your processes, products and services. Over time, these seemingly small changes can completely transform your business.
Finances are what make or break a business. We help your cafe, restaurant or cloud kitchen grow more by providing financial management solutions. Follow us on Instagram to get an idea of what we can do for you. Follow us here: @gainsaccountants_