A hospitality business should be run just like any other business, which means strategic planning is essential. But planning doesn’t need to be difficult or time consuming — small changes along the way can make all the difference and can make eventually selling your business stress-free.
Cafe Bookkeepers understands the hospitality industry and can help take the stress out of running your own business. Cafe Bookkeepers has created a free eBook with tips to help cafe owners maximise their returns, including:
- Treat your lease like gold
Sign a long lease with good terms. You may feel “locked in” for a long period of time, but remember that if you sell your cafe, a long lease with good terms means a guaranteed amount of time for a potential buyer to pay back their investment. This normally means a higher sale price.
A bad lease term could cost you thousands of dollars. It is highly unlikely that you will be able to sell a cafe with only a short amount of time remaining on a lease. Do not sign a lease or make any deposits until you have a formal Development Application.
- Keep capital costs down
Have you ever heard the line “a car loses value as soon as it has driven out of the dealership”? Think of capital costs in your cafe the same way. When you sell a business the purchaser will focus on lease terms and net profit. They will not care what you paid for the light fixtures. Capital costs include expenses such as equipment, venue fit-out, renovations and branding. Consider alternative ways to pay for equipment, such as leasing.
- Know your numbers
Review your numbers on a weekly basis so you are able to make regular, proactive changes. Try not to focus solely on daily turnover. Daily turnover is often referenced to measure a business’ performance as it is an easily accessible figure. Whilst daily turnover is an important number, there are other numbers that are too often overlooked such as your key ratios and net profit.
The Australian Taxation Office has benchmarks that are used to predict how a business in a certain industry may perform. It is important to be aware of your industry benchmarks. Understand how PAYG and superannuation are calculated and how they will impact you before you start hiring.
To view the full five tips, head to www.cafebookkeepers.com.au to download your free eBook.