RESTAURANT CONSULTING & HOSPITALITY CONSULTING

Cash flow is essential – it is the roadmap to performance or the core of the financial process. A cash flow forecast ensures you have the financial resources to fund your company’s growth or simply to make the next payroll. Most companies want to do better than just covering all of their fixed or variable costs, but aren’t certain where that actually occurs or what all of the factors are to make that goal attainable.

SVA can help this process along by making sure all costs are considered, pricing for your product or service is right in today’s marketplace, your sales goals are set at the right level, the cost of buying the materials for your product is in line, and the list goes on. In the restaurant and hospitality industry, seasonality and peak business times should be considered in your cash flow planning. Let us help you clearly define your average per unit revenue, average per unit cost, and your monthly fixed costs to get you to that break-even point as fast as possible.

We know running a business is more than a full-time job and you need a strategic partner who can help impact your bottom line and long-term profitability. From consulting on hotel operations and menu pricing for restaurants to assisting with lease negotiations, we stay actively involved in financial and process improvement so you can focus on day-to-day operations.

Our restaurant and hospitality professionals also employ financial tools to assist you in planning for your future, suggest improvements, monitor results and communicate those results in a productive and strategic manner. Our priority is to listen to your concerns and find the right solutions to fit your unique needs.

Your financial statements include the balance sheet, statement of cash flows, and the income statement. This information is used to calculate financial ratios that help you understand the financial performance of your business.

The ratios you should be reviewing are:

• Current ratio
• Profit margin
• Return on assets
• Price-earnings ratio

Once you have your ratios determined, benchmark them against industry standards to gauge how your company is performing against your peer group. Our SVA experts will review your financial statements and ratios to help you determine how your business aligns to your industry-specific peers.

Costing and pricing your menu items is an important step in making sure you are generating enough revenue to cover expenses. To cost each item, you will need to know the exact amount of each ingredient and the amount of drip loss, plus your overhead expenses including rent, salaries, equipment, etc. There are several methods you can use to price menu items, including the ideal food cost pricing method, the competition pricing method, and the demand-driven pricing method. Our restaurant and hospitality professionals will review your costs and pricing, and help you determine an appropriate profitability margin for each.

Operational reviews should be performed regularly for your business. It is a way to look at your operational efficiency and determine areas that need to be improved as well as areas that are performing well. The reviews can uncover opportunities that may increase profit, drive more revenue, or reduce costs, without affecting the quality of your service. These reviews should also drive your strategic planning and budgeting process. At SVA, we use our in-depth knowledge of the restaurant and hospitality industry to complete operational and profitability reviews that include a consultative plan to address any concerns that might arise. Getting a review is the start, putting expert advice into practice is the goal. 

Almost everyone is familiar with sales taxes and the role they play as a consumer. However, understanding the complexities and laws involved with sales and use taxes as they apply to business is another story. Reduce the impact of sales tax on not only your business but your customers by proactively planning for the tax consequences of your business-related activities.

Complying with IRS tip reporting rules is one of the most critical and important tasks facing restaurant owners. This is truer today than a decade ago as the IRS is accelerating its efforts to capture previously lost revenue in the form of income and FICA (Social Security and Medicare) tax. As a restaurant owner, you should be aware of your responsibilities regarding the reporting of your employees’ tips.  

One of the most important factors that restaurant employers and employees should both be aware of is that tips are considered taxable income. Because of this, employees and employers each have specific reporting requirements.

Tip reporting is required not only from the owner side of the business but the employee side as well. Federal tax law requires any employee who receives at least $20 in tips in a month, to keep a daily record and report the tips to their employer. You also need to withhold income and FICA tax from each paycheck and report each employee’s tips to the IRS.   This is a complicated area of your business, but an essential one. Putting procedures and processes in place to make certain your establishment is compliant is another area of SVA’s expertise.