How Bookkeepers Can Help You Manage Costs And Increase Profits
Manage Your Food & Wage Costs or They’ll Manage You
Anyone in the hospitality business is aware of how costly food and wages can be. And as an owner, you’re responsible for the impossible task of finding a balance and keeping the business afloat. Food costs and wage costs are, simply put, the two most important and most impactful numbers in your bottom line…and if not managed correctly, they can break your business. This is yet another reason why you need a talented bookkeeper on your side to keep your profit margins in line.
In this article, we’re going to discuss how to manage costs and increase your profit margins with the help of a high-quality bookkeeper.
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Optimizing Your Expenses
In the hospitality business, managing costs is everything. And wages and food account for as much as 75% of the total expenses in this industry.
This leaves little to no room for error. And as most restaurateurs will tell you, the difference between being open or closed tomorrow is a few dollars in food costs and wages.
So let’s take a look at how to manage these costs so you can improve your profits.
Wages can be a somewhat delicate subject for many employers. Obviously, you want to keep your employees happy, but you also need to make money, otherwise, you wouldn’t be in this business, would you?
In Australia, most restaurants, cafes, and other hospitality venues budget about 35-40 percent of their expenses for wages. And that’s no easy task.
It’s competitive out there, especially in tourist hotspots like Byron Bay or Port Macquarie, and finding and maintaining qualified staff can be a challenge. But if you’re lucky enough to find the right person for your business – someone who is committed, hard-working and reliable – don’t take them for granted! Your turnover rate will improve significantly when you pay appropriately. And that’s key in destinations like Yamba, Lismore, and Ballina because keeping your staff on board is vital!
To do this, there are a number of strategies you can impose, but one of the most common is balancing your junior staff and senior staff. Finding a happy medium here can make a world of difference in bringing down your average hourly expenses.
Food costs account for approximately 30-35% of your total expenses in places like Coffs Harbour, Mullumbimby or Grafton. There’s no shortage of competition, and delivery doesn’t come cheap!
Managing food costs can be a daunting task, especially because of the differences between the amount of raw food you need to order on different days, weeks, or months in the year.
To some, it may seem like a solution to increase food prices as much as possible in order to stay on budget. However, this does not account for the way your customers will react when they see how comparatively expensive their restaurant meal has become.
The best strategy is to be flexible with menu prices and keep your orders in line with the data you’ve collected in similar situations. If weekends are typically busier than weekdays, you’ll obviously want to order a little extra to make sure you have enough food to accommodate all of your guests!
Bookkeeping: The Backbone Of Your Business
Bookkeeping services are a necessary part of running and managing your business. It’s also one that many entrepreneurs struggle with, but if you can get a master on board now, the advantage will be yours to keep!
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Here’s how a master bookkeeper can help you get higher profits and manage your food and wage costs effectively:
Finding The Right Balance For Your Staff
Scheduling senior employees with newcomers can not only help lower your overall hourly costs, but it can also help improve the quality of work being done as a whole.
Bookkeepers are able to help you see the bigger picture in this scenario as they have the data and information necessary to optimize your workforce.
Navigating The Fresh Food Tightrope
Bookkeepers are masters at identifying patterns in your business, and that will ultimately allow you to optimize your orders to minimize waste and find the right price points for your menu items while reducing your food costs as a whole.
Maintaining your books is the absolute best way to understand where you are spending money, where you can cut costs and how you can grow your profits. For that reason, bookkeeping is a vital part of your business, and worth every penny.
Are you ready to see how EMPOWER can help you cut costs and increase your profits?
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