Each week I receive an email from RestaurantOwner.com with a Profit Tip of the Week. This week in their email they highlighted how one owner shared his restaurant's Profit & Loss statement with all his employees and how he benefited from this.
We highlight, in our Top Ten Ideas or Controls to Increase Your Restaraunt's Profits, the need to not only track weekly profits but also, share some of the information with staff members. The email received this week reaffirmed why it is beneficial to do so. Below is the story of this owner's experience after sharing his restaurant's financials with his employees.
"At a seminar we were conducting a few years ago I met an owner of three independent Mexican restaurants in California. The first two he opened were very profitable from the start but the third got off to a very slow start. At one point he even had serious thoughts about closing it.
Before he pulled the plug though, he tried something fairly radical for our industry. He got all of his employees together and showed them the restaurant's most recent Profit & Loss Statement.
He took the time to explain the P&L and why it's important. When he got to the bottom line, there was a fairly large number brackets around it. 'This number' (Net Loss), he said, 'is approximately the amount of money I have to take out of my pocket each month to keep his restaurant going.' Most of his employees were shocked. nobody had any idea the restaurant was 'losing money.'
The owner continued the discussion by talking about the functions of each group of employees (servers, line cooks, bussers, etc.) and described how their jobs and activities in the restaurant were connected to and ultimately reflected on the P&L, line by line.
He explained that the results on the P&L needed to improve and he needed everyone's help in making that happen."
The email goes on to share the results: The owner saw changes in the employees attitude and job performances. Employees' became more conscientious about customer service, portion control, and efficiency.
By sharing the P&L information with his employees the owner was able to get the employees' to buy-in and work together with the goal of improving the restaurant's performance. Within six months the restaurant was at break-even and within a year it was making a profit.
Learn more about this and our other ideas for restauarnts to increase profits by obtaining our free copy of our Top Ten Ideas or Controls to Increase Your Restaurant's Profit.
Over the past several years, it seems like we have been posting negative information for business owners regarding new regulations and the possibility of significant tax increases in 2013.
Taxmageddon is approaching in January, 2013 if Congress, the Senate and the President don't make any changes to the federal tax laws before then.
Well, amidst all the negative news, here is some great news for NC business owners.
Beginning this tax year (2012), NC business owners who have a Sole Proprietorship, S Corporation, Partnership or LLC will be able to deduct up to $50,000 of business income from their state taxes.
The news is even better if you and your wife are partners or co-owners of one of these entities. The new law allows you to each deduct up to $50,000 of income. So if you are business partners or co-owners, you can deduct up to $100,000 of income between the two of you.
This new income deduction falls under North Carolina statute, N.C.G.S 105-134.6(b)(22) and does not apply to C Corporations or passive income. If you have a rental property or any other investment that generates passive income, you are not allowed to use this income deduction.
A business owner whose business net income exceeds $50,000 can expect to save at least $3,500 on NC state income taxes and for married couples who share ownership of a North Carolina company, that tax savings can double to more than $7,000.
What a great incentive to start a small business in NC. If you are a small business owner or about to start a business, we can assist you. You may contact us here.
As CPA firm committed to helping small business owners succeed, we are always looking for affordable value added resources to direct our clients to. One of the best resources is the SCORE organization.
It is a non-profit organization, and in their own words they are "...dedicated to helping small businesses get off the ground, grow, and achieve their goals, through education and mentorship."
Business owners are often faced with the challenge of building a business with little to no support structure. It can be a lonely experience for business owners trying to build their business.
SCORE can assist and be an integral part of your support network. It is staffed with over 13,000 volunteers and they operate over 300 chapters. Given their extensive network of knowledgeable volunteers, it is likely they will have someone with experience in your industry that can assist and help you.
Score provides business owners with:
- Free mentoring from volunteers who have experience in over 62 industries.
- Free confidential one on one counseling services. either in-person or via email.
- Free business tools and forms.
- Access to free or low cost workshops.
While a CPA and accounting firm should be always be an integral part of your team, consider also reaching out to SCORE and see what information, experience and knowledge they can share with you to help you succeed.
To assist business owners, we have put together a list of 20 key resoucres. Go here to get your free copy.