So many business owners ask me to verify if their business is set up the “right” way. The short answer is that the key to a good business formation is to make sure that the formation works with the dreams you have for your company.
Let’s use Facebook as an example. Mark Zuckerberg had a dream while in his Harvard University dorm room in 2004. But before he could bring his innovation to the masses, he needed to choose a business formation that would work with his vision. No one could have predicted, what Facebook would ultimately become. And yet, at the beginning stages of any company, every business owner must these important decisions without knowing what the future holds.
Prior to defining Facebook legally, it was just a fun project among Mark Zuckerberg and his friends. According to the records, Mark Zuckerberg first formed a limited liability company, or LLC, based in Florida. The legal formation LLC is considered a “hybrid”...
Chances are somewhere on your shelves, lurking behind so many other boxes, is an old dusty can of soup that gets counted every week and passed on to the next team of back-of-the-house employees, week after week, without a thought. This can of soup can teach you a lot about your inventory. Many times, your struggle with managing inventory levels is more about your mindset than your process. Here are three tips to help you adjust your mindset and better manage your inventory levels, one can of soup at a time.
The value of inventory
The hypothetical can of soup probably cost you $1.50 several months ago when purchased as part of your weekly food order. But each week that goes by, that can of soup costs you more than just $1.50. The true cost of that can of soup is all the other products you haven’t been able to buy each week because $1.50 of your cash is sitting in the can of soup waiting to get sold.
This can be a hard concept to follow at first. Assuming you don’t want to...
When I claim every business decision is an accounting decision, most business owners say they don't want anything to do with accounting. I hear about when they were in school, they struggled with numbers and don't like to deal with them. Or they're just not good with numbers, or they're not numbers people. But I think everyone can do basic accounting, and I work hard to help every client become an expert on their own business's accounting.
I was once an accounting instructor at Eastern Florida State College and Florida Atlantic University. I founded The Largo Group on the principle that in order to be successful, everyone must harness their inner accountant – whether you think you’re a “numbers person” or not.
If taught the right way, accounting is something we can all understand. We just have to get back to the basics. Here are three first steps in embracing your accounting.
Step 1: Have a positive mindset
Have you ever wondered what a restaurant profit and loss statement is and why it's important to your restaurant business? Watch this video, or continue reading below, to find out.
Let’s make an assumption that you take a picture of the business (a balance sheet) on the last day of each month. That picture has changed from one photo to the next. Things happened to make those pictures change; deliveries were accepted at the back door, customers came and purchased your products, people worked and were paid, and so on. A profit and loss statement (P&L) is like a movie showing all of those things happening on a daily basis. Simply put, a P&L is a moving picture or movie that shows everything that went on in your restaurant between the times you took the photos.
You get your P&L statement, flip to the end to see how much you've made or lose, and say, "Oh, crap." What does it mean to you? Have you ever combed through it to see if it's accurate? Does it make...
Have you ever wondered what a restaurant accountant does for a restaurant business? Why are they important and what you should expect? Watch this video, or continue reading below, to learn.
Look, I feel your pain. I've been an operator and received my P&L anywhere from 15-90 days after a period closed. Getting it that late doesn't help me - all it does is help me look backwards. But you should expect more from your restaurant accountant because you need more to run a profitable restaurant.
If your restaurant accountant is giving you your profit and loss statement even 15 days into the next period, all you're doing is looking backwards. Many restaurant owners feel like they're overpaying their restaurant accountant and then don't want to be charged more so they don't call and ask questions for fear of being billed. Instead they wait until the end of the year and then get a big bill when the accountant is redoing all of the books to make sure the taxes are paid. And all the...
Do you wonder what a restaurant balance sheet is for? Or better yet, how do you read a restaurant balance sheet? Watch this video, or continue reading below, to learn the answers to these questions and more.
The balance sheet is a tool that shows you the health of your business. The simplest way to think about a balance sheet is like this: take your digital camera out and take a picture of your business. Print out the photo on your printer immediately. What you will see is a snapshot in time, showing what assets you have and who owns them.
One side of the balance sheet shows the assets of the restaurant. These assets are in the order in which they can most easily be liquidated. For instance, cash can be taken out of the bank today, but a building will take months or sometimes years to sell. The other side of a balance sheet shows the liabilities of the restaurant and to whom they are owed, or if they are a part of the owner’s...
Would you like to make your restaurant payroll less stressful? Watch this video, or read below, for two tips on how to do it.
You know that three payroll month? It only happens twice per year, but somehow it always seems to happen when your sales are low and you have no cash flow. Three payrolls and no cash. Or what about the time it takes to do your restaurant payroll. You have to track down your data from your POS system, making the managers adjust the in and out time, making sure all the data is correct, enter all the data and then double check it. It takes a lot of time. And if you're a restaurant owner who does it themself, you're really stressing yourself out.
A lot of restaurant owners don't want to give up the cost of paying a professional payroll company. Especially if they feel like they have the time to do it themselves. But I have a few reasons you should just pay a payroll company to do it for you.