As a food & beverage business owner, you are probably always looking for ways to increase revenue. But what about the overall financial health of your business? While it may seem like the two are one and the same, they are most definitely not.
In this post, we’ll share six simple tips that will help ensure that your F&B business is in great financial shape from top to bottom.
#1 – Set a Goal
Ask any personal trainer if it’s a good idea to set fitness goals and they’ll respond with an emphatic “yes!”
The same rings true for your business’ financial fitness. Setting goals is a great way to ensure that you’re on track for success.
Remember that your goals should be SMART: Specific, Measurable, Achievable, Relevant, and Time-based.
- Reduce operating expenses by 5% by the end of Q1
- Set aside enough capital to open a second location within three years
- Hire a full-time marketing manager by the end of Q3
#2 – Create a Plan to Achieve Your Goals
Once you’ve set your goals, it’s time to create a plan for achieving them.
If your goal is to reduce expenses by five percent by the end of Q1, then list out specific areas that are ripe for improvement and identify potential solutions. For example:
- Reduce delivery costs by 10% by offering special promotions or loyalty points for direct orders
- Implement a more efficient way to track inventory
- Create new systems to increase productivity using digital tools
#3 – Track Your Progress
Just as runners track their miles on their Garmin watches or weight lifters keep a log of their sets and reps each session, business owners should keep track of their data in order to track progress and identify trends. However, instead of a smartwatch or phone app, business owners should opt for cloud accounting software.
Cloud accounting software gives you greater financial visibility and anytime, anywhere access to all of the numbers that matter. It also makes it easy to track your invoices and transactions and get a handle on your cash flow. Cloud accounting solutions also enable you to visualise data, which can help you to identify problems and opportunities that might otherwise go undetected.
#4 – Prioritise Cash Flow
Cash flow is one of the most important aspects of a healthy business. If you don’t have enough cash to pay your employees, suppliers, and other bills then it doesn’t matter how much revenue you’re bringing in – your bottom line will be negative every month. Therefore, cash flow is central to the financial health of your business.
Keep on top of your cash flow by using a tool like Xero.
Xero lets you manage your cash flow to ensure that bills are paid on time and you’re always aware of how much money is coming in, going out, and whether or not there’s a surplus or deficit. You can set up alerts for when invoices become due so that you don’t end up incurring a late payment fee.
#5 – Hire a Specialist Accountant
Just as fitness fanatics hire personal trainers, F&B business owners need the guidance of a great accountant.
And just as weight lifters and yoga fans go to different coaches for their specific needs, different businesses also require niche specialists. Accounting is not a one-size-fits-all.
A F&B industry specialist will enable you to tackle the particular problems and pitfalls of the sector using a proven method for success.
For some industries, tight margins and changes in footfall aren’t such an issue and so not all accountants are well versed in how to manage these particular problems. With food costs rising and industry-wide staffing shortages, it’s now more important than ever for cafes, restaurants and delivery kitchens to work with specialist financial experts who know how to tackle these exact problems.
#6 – Create a Culture That Fosters Financial Awareness
Finally, in order to ensure that your business is financially fit and healthy, it’s important to create a culture where employees are actively engaged in improving financial performance.
This can be done via team-building exercises, like brainstorming new ways to decrease expenses or increase profits. When your staff feel as though their actions have a real impact on the big picture of your business, they will take on more responsibility and feel a greater sense of ownership.
Don’t wait until hard times start – it pays to be proactive about your business’s financial fitness.
Of the six steps listed above, hiring a specialist accountant is the one which will make the biggest (and fastest) difference to your company’s financial health. Working with an industry expert will not only keep you accountable in other areas, but it will also equip you to overcome the biggest challenges that the industry is facing right now.
Here at Gains Accountants, we are F&B industry specialists who take a dynamic approach to financial management. To find out more about how we can help your business thrive, get in touch with us here.