30 Jun, 2020
As the hospitality industry slowly comes back to life after a three month shutdown, we look at how accountants can help business owners prepare for the ‘new normal’.
Pubs, cafes, bars and restaurants have been one of the few retail success stories from our high streets in recent years. Then as the pandemic hit, hospitality like everything else, shut down overnight.
Panicked business owners called their accountants who burned the midnight oil to access unprecedented levels of state funding, grants and loans, as well as deal with furlough schemes and other support for their workers.
This has not only seen accountants having to deal with new complex information from various Governments, but also other areas like staff resourcing.
“By default we have become the unofficial HR consultants for our hospitality clients,” says Sarah Palmer from Women Who Count. “All have furloughed 100% of employees to date and, unfortunately, we are now being asked to process some of these employees for redundancies”.
Tip: Help clients build scenarios and options around staff needs
Should you advise your clients to open for business?
Different countries have put in place different social distancing measures, and in some countries, guidance can even vary state by state. Australia and the USA, for example, have limited the number of diners a venue can host. In Belgium, waiters wore facemarks with images of their chins printed on them. The UK Government meanwhile has announced that hospitality businesses can open from July 4th.
No matter where you're based, what can accountants do to advise their hospitality clients? Georgi Rolling, founder of Starfish Accounting, has had a number of conversations with her hospitality clients around reopening already.
“It’s mainly been around the return of team members, and utilising the flexible furlough scheme to try to avoid operating at a loss. We’ve also been recommending that they contact their landlords and lenders to see if they can arrange any further rent and loan payment holidays as part of their cash flow planning”.
Tip: Explore cash flow options in Fathom and rent holidays with site owners
Track the right KPIs
Knowing what’s going on in your client’s business is critical, and so it’s essential to track the right Key Performance Indicators (KPIs) in Fathom. Gauging the success of a food-led business comes down to the goals that have been set, and it’s hard to set goals if you don’t know how you’re currently performing. Post COVID-19, many KPIs like Average Customer Headcount are going to change drastically, so it's important you reset and re-evaluate KPIs.
Tip: Track your clients' financial and non-financial KPIs
Perfecting the pivot
Georgi and her business partner, Emma Lawrence, have even helped some of their clients completely change focus and direction.
“We’ve had a couple of clients who have pivoted their businesses surprisingly well. One has been Salon, doing home deliveries of fine wines which has been quite profitable and created new interest in the local area, and a second is Levan, who’ve been running a heat-up-at-home takeaway service which has been maxed out.” Georgi adds, “they are related businesses with a strong management team which really helps in these challenging times!”
Tip: Challenge clients to think about their business in a new way, and help them explore those scenarios with Fathom
There’s no beer!
Brendan Padfield owns The Unruly Pig near Woodbridge, Suffolk. Like many food business owners, he’s concerned about suppliers and other supporting services and industries having stock to sell to when they open.
“I have Estrella Damm as my lager, but there isn’t any in the country at the moment,” says Brendan. As for advice from his accountant, “my accountant has been proactive, offering me a discount for getting my accounts done now rather than in the November rush.”
Tip: If you have spare capacity now, consider offering clients discounts or other ‘early bird’ incentives
One of the near certain things that many businesses will surely abandon is the cash float in the till, and switch entirely to card only payment. So they’ll have to ensure that their hardware is up to the task.
Nicholas Rurtherford runs UKBusinessBuddy.com, which helps businesses examine their costs and find efficiencies. As part of this, they specialise in point of sale devices such as chip and pin machines for hospitality clients. When the sector shut down in March, they moved to put their clients on a peppercorn rent for the units and had to furlough back office staff.
“The sector is very nervous about opening,” says Nicholas, and he fully expects many businesses to go to the wall. Consequently he’s having to look outside food and drink to other retail set ups like hairdressers. “We’ve used the down time and the funding we secured to plan our first direct mail marketing campaign,” he says.
Tip: Be prepared to lose clients and set aside time to find new ones. Also consider your marketing
So what happens next?
As for what the new normal will look like, the jury’s still out. “Is it going to be a nice experience going out for dinner with the wife and being served by someone with a visor and a mask on?” says Nicholas.
For now at least, like everyone else, he’s taking it a day at a time. In some ways, offering advice and services in lockdown was easier for accountants. Accessing funds and grants played to their strengths. As we move to a new normal, the future becomes a lot more uncertain. This is why we recently published our ebook ‘Using Fathom When it’s Not Business As Usual’, a guide containing 12 useful tips for using Fathom to help your clients or business. You can get that for free here.
We’ll leave Nicholas Rurtherford to have the final word, “we’re a nation of spenders, we like to eat out and enjoy a drink. I do think there’s a more positive attitude coming through now than there was in March, we’re starting to get enquiries again”.
Written by Andrew Webb
Andrew is Fathom’s Content Strategist based in the UK. He has a background in journalism and has worked for companies like the BBC and HuffPost, as well as start ups in education and technology. Andrew has also published 5 food books and makes a great pie.