Hospitality entrepreneurs know the challenges of running a business in an ever-changing economic climate. A survey conducted by the National Restaurant Association in 2019 found that 55% of restaurant operators believed that the economy was the biggest challenge, with 48% citing labor costs and 43% citing food costs.
The global pandemic has worsened these problems, making it harder for many hospitality businesses to stay in business. Thankfully, some companies, like The Largo Group, are providing valuable assets in helping hospitality businesses thrive amidst economic uncertainty.
The hospitality industry during COVID-19
The pandemic presented significant challenges to the restaurant industry, leading to a shift in consumer behavior, including reduced dining out and increased delivery and takeout orders. Mandatory closures and capacity limitations imposed by the government have also further impacted the industry's revenue.
These unforeseeable market conditions have made it difficult for restaurant entrepreneurs to plan for the future. Many have had to pivot their business models, requiring substantial investments in technology and infrastructure.
Restaurant entrepreneurs must engage in strategic financial planning to navigate this unstable economic climate. By forecasting potential scenarios and creating contingency plans, entrepreneurs can better manage the volatility and uncertainty of the market. This involves identifying potential risks and opportunities and creating detailed budgets and cash flow projections to maintain financial stability.
The Largo Group's strategy against economic uncertainty
The Largo Group, founded by CPA Anne Gannon in 2016, provides proactive accounting services with a simplified approach to offer business owners and individuals peace of mind. The firm aims to equip business owners with real-time information and tools to expand their businesses through a systematic approach to accounting and tax services.
"We are more than an accounting firm for restaurant owners. Our four tools give business owners more confidence and control over their numbers. Our weekly accounting approach gives owners more control over how their business operates," says Gannon. "We give restaurant owners more than a weekly report. We give them timely communication and guidance for long-term sustainable growth," she adds.
During economic uncertainty, such as market fluctuations or unprecedented events like the pandemic, a proactive accounting system can offer restaurant operators the necessary information and tools to make better financial decisions. Regular financial reports that track key performance indicators, such as revenue, expenses, and profit margins, can help operators identify areas where they can cut costs, boost revenue, or improve profitability. This is critical when cash flow is limited during times of economic uncertainty.
Additionally, it can help restaurant operators with forecasting and budgeting, allowing them to plan for future expenses and revenues. This results in informed decisions about investments, staffing, and other critical aspects of their business.
An expert helping hand
The Largo Group's commitment to helping the hospitality industry goes beyond traditional accounting services. The firm's CEO notes they have a mix of experienced accountants and industry experts with over 30 years of operational experience for well-known companies. "We developed our accounting model that proved to be a difference maker in businesses across the country, with over 95% of our clients surviving covid related shutdowns," says Gannon.
Any business can be affected by market fluctuations and other unpredictable events. While resilience is crucial to surviving such economic movements, having an expert helping hand such as The Largo Group can increase the chances of business survival.
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