FINANCE: 6 Tips on How to Manage Your Financial Strategy
Family-led restaurants with old traditions seem like a rare sight today thanks, in part, to our competitive industry. In fact, 80% of new restaurants that open fail within the first year. And although many inexperienced entrepreneurs believe that this can be contributed to a poorly designed menu and bad service, that is not always true. Restaurant owners mostly focus on the location, menu, employees, and finding the capital to start their business. But they also often forget to plan ahead and think about the necessary money needed to sustain their business. To prevent you from making those mistakes, here are six tips on how to manage your financial strategy better.
DID YOU KNOWS…
The High Spending of Halloween
Halloween is always a major occasion for the American economy and in 2019, total spending is forecast to reach $8.8 billion. A decade ago, that figure was just $4.8 billion. The NRF data also shows how participants are going to celebrate Halloween with the vast majority, 69%, intended to hand out candy to trick-or-treaters. Nearly half of Americans, 49%, decorate their home in some spooky way while 47% planned to dress up in costume.
NCAA Moves to Give Athletes Likeness Rights
The NCAA has began the process to allow its athletes to profit off their name, image and likeness rights. How this will play out is still TBD (we half expect schools to take a cut off their students’ likeness rights), but this is a step forward to ending one of the biggest scams in sports.
The Most Popular Pumpkin Beers (By State)
Pumpkin-everything might be a bit of a cliché nowadays, but it’s big business – including pumpkin beer. Here’s a cool infographic map VinePair put together from BeerAdvocate data that shows the most popular pumpkin beers in each state. Are you surprised by your local’s fav?
ZERO SUM WHAT
Why it matters to you: Increases in minimum wage haven’t hurt restaurants in NYC.
As more and more communities elevate their minimum wages, the consequence of the Fight for $15 comes more clearly into view. Much to the dismay of industry organizations like the National Restaurant Association, the effect of increasing the minimum wage has not spelled the end of the restaurant business and, in fact, the results prove quite the opposite. There are definitely effects on workers and not all of them good. However, in the example of New York City, once again the increases in place since 2018 have not caused mass closures. What they have done is increase prices – something out industry has long needed.
As an operator, among the most difficult choices you make is your pricing. One step to high and your competitors undercut, too low and your margins disappear. However, we are in a healthy economy by most measures and a little inflation is not a terrible thing. Additionally, when workers have more money in their pocket, they spend more money. One of the immediate beneficiaries of that excess cash is the restaurant business. No, we aren’t suggesting you embrace increased wages, but we are saying it may not have the sour impact that our industry leadership has projected.
Given that it’s already hard enough recruit for our industry, the impact of the minimum wage is already muted. Let’s be real, there are very few kitchen staff in a restaurant in NYC that were making under $15/hour even two years ago. It’s unlikely we won’t see minimum wage increases across the country in the next few years. Consequently, now is the time to work towards managing it. Start by projecting labor and writing better schedules. Then review your prices and see what you can increase if the minimum wage goes up where you are. At least by being ahead of it, you will control it rather than reacting and being forced to manage it.
[Source: Market Watch]
CLIMATE CHANGE MADE ME FAT
Why it matters to you: Increased CO2 means more carbs in your veggies, ugh.
As if the theories of climate change aren’t depressing enough, now we learn that the increased CO2 from carbon emissions is biologically changing the plants and vegetables we eat. Irakli Loladze, a mathematical biologist at Arizona State University asserts, “When the air that surrounds them [plants] is richer in CO2, they use it to synthesize more carbohydrates, including starches and sugars, which are then stored in plant cells.”
An example shared by Loladze was something as simple as the wheat we mill to create flour for bread. Citing a 2004 study led by Lewis Ziska, then a US Department of Agriculture researcher, now a professor at Columbia University, Loladze said that the wheat we consumed then likely contained lower levels of protein than the wheat that people were consuming decades ago.
Now, let’s be honest, there is nothing any of us individually can do to defeat climate change. What we do know is the overwhelming reality for our industry is that it is going to be an enormous disruption. This revelation about increased carbs in our plants is only adding insult to injury.
[Source: Mother Jones]