This all sounds like an episode of a TV programme, but happened well before they hit the screens…
Peter, a small business consultant phoned me asking for some help with a restaurant he was involved with.
I discovered the location was good and the chef talented.
But the chef’s business partner was a different matter. The menu was too broad and diverse for the cover numbers – so although the theoretical gross margin from each dish was excellent, wastage meant the overall GP came out disappointingly low.
Almost inevitably, the book-keeping was also pretty shoddy and there were arrears of creditors including the VAT and PAYE.
Staffing percentages were also too high, partly as front-of-house disorganisation meant service was too slow, which was not helping the turnover.
I talked Peter through the major steps that needed making as well as lots of other subtle tweaks that would improve things (signage, lighting, pricing, gratuities accounting and more)
His first success was to agree a deferred but full payment plan with HMRC, which alleviated a major pressure point.
Chef tuned the menu and the chaos inducing partner was sidelined, allowing the staff to work more calmly and smoothly when we did a promotion/relaunch.
Everything came together quite quickly and the business has gone from strength to strength – it now has a deli too which also trades online. The troublesome partner was soon eased out, boosting the bottom line further.
Not many restaurants last long, but this one is now one of the exceptions to prove the rule
Case study 3 - Interim FD example