Recently the government of Korea and Sookmyung university ran a free training course for people thinking of starting their own restaurant in London. The session was presented by Sun Hwa Choi of Accounts4Asia and malcolm Ford of IT enterprise business Solutions.
The session began with an overview of taxes to be paid, what is a profit and loss statement to how to price the menu. The next session had a look at what you need to set up your company, from the formation documents required, registering with HMRC to opening an business bank account.
Then the participants broke into groups to look at a number of different business scenarios. The first group where given the opportunity to but an existing business based in a residential area of West London. They had to discuss what type of customers would go, is it a good location, and what are the benefits of purchasing an existing concern. When asked they had assumed that they could attract 350 customers per week. They were shocked to learn that the restaurant the scenario was based on had sometimes only 2 customers on a typical week night and up to 12 on a weekend.
The other group looked at an empty commercial property in Leicester square. They believed that a majority of clients would come from the tourist trade. Even though it was seen to be potentially lucrative, there was limited scope for repeat trade and it was seasonal. That means that during the summer months you have to make enough to last through the winter periods, when income goes down, until the next season.
Based on this last scenario the participants then started to produce their own cashflow plan estimating how much they would need to invest to get the business up and running. Start up costs included rent deposits, initial stock, professional fees and fixtures and fittings.
Working capital was also included for the months that they would not be in profit. Out of the income generated, that had to pay for stock, rent, wages, telephone and other overheads. Even if they got in profit they had to pay tax on anything left over. In going through that exercise everyone began to realise how difficult that it was to get a decent return on the the moneys invested into the business.
Even though people realised the challenges ahead, everyone left with a sense of optimism at the chance at being able to build something of their own and take charge off their own lives. Yet with that opportunity they needed to calculate the risk involved in any venture. In doing that preparation it is possible to adapt to changing circumstance and have contingency plans in place if things go wrong. The training course provided a reality check against which dreams could be measured with the added hope that some will be realised.
Find out more about how Mamut AccountEdge Software can help your Restaurant develop and grow.
More training sessions are being planned for future events.
Feedback:
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