Tips and tricks for small businesses as the calendar turns on a wild 2020.
It’s hard to imagine an industry hit harder by COVID-19 than hospitality. It’s estimated that without intervention, 85 percent of all independent restaurants will close. There’s no question that these businesses need support and resources from the federal and state levels, but there are also ways that businesses can prepare themselves to weather the storm right now.
The best place to start 2021 preparations is with business operations and admin—and before you yawn, just know that these steps could help save thousands and ensure your business is set up for success in the new year—without relying on aid that may never come. A few areas with high impact for restaurant operations are tax filing, payroll, expenses, and vendors.
Prep for Tax Filing
Restaurants should take advantage of ways to reduce their annual income before end of year tax filings. This could mean delaying invoices that don’t need to actually be fulfilled until the new year, or looking into different tax deductions that you are eligible for. There are near limitless deduction categories, and restaurants should use them to their full advantage—everything from maintenance expenses (utilities, cleaning, repairs, etc.) to marketing and advertising (coupons, flyers, social media marketing, etc.) can apply.
Close the Books
Restaurateurs should do a sweep of their finances and make sure to fill in all their 1099s, track down any missing receipts, file expense reports for any outstanding costs, and make sure all their paperwork is in order. This type of “tidying up” is typical for the end of the year, but this year, taking full stock of accounting could result in saved money. By going through all of your assets and organizing, you’ll be able to get a better picture of where you can save, or expenses to keep an eye on.
Business owners would also benefit from doing a scan of employee benefits, deductions, W2s, and general payroll necessities to make sure they’re filing the most accurate paperwork. This year more than most, businesses need to dedicate ample time to getting organized. If even one section of a single form is wrong, in some cases, the restaurant can be overcharged or hit with a fine. By getting ducks in a row early, business owners can avoid any headaches AND still have time to triple check their paperwork for accuracy.
Shop Around for Vendors
Every year, while organizing and taking stock of assets, business owners should be doing their research and shopping around to get the best prices for every vendor they work with. Whether this research lets you bargain a premium down, or find a new vendor entirely, these line items add up and can be assessed in every area of the business. Areas to look for include produce, meat, and dairy for food, plates, silverware, and paper towels for supplies, or even business insurance, worker’s compensation, and liability policies- all of which can add up quickly if you aren't getting the best rate. For example, workers compensation policies are based on your company’s payroll, and if your payroll or business operations have changed due to COVID-19, it might be worth shopping around for some quotes!
So before you ring in the New Year and cheers your Moët with close family, take the time to assess your restaurant operations and finances. Though there’s hope for a vaccine in the near future, the industry will take time to bounce back and businesses need to be prepared. Much like cooking, investing a little time in prep work can go a long way for restaurants as they weather the storm.
Bryan O’Connell is the CEO of Huckleberry, a platform with a mission to rebuild business insurance from the ground up by providing small business owners with the capability to manage all of their insurance needs through its transparent, easy-to-use interface.