Eighteen years ago a Restauranteur walked into my office needing a decent accountant. At the time he had two Italian Restaurants in the suburbs and hadn’t filed any of his returns in two years.
It was a sordid and all too familiar tale of a family accountant that he’d outgrown. One day, the former accountant stopped answering his telephone calls and returning his emails altogether, so he brought the job to me. We cleaned things up, filed his returns, and got him back into compliance.
If we fast-forward from then to a couple of years ago, his restaurant chain had grown to five locations. He had installed a solid management structure of managers and general managers that were doing a good job of keeping the day to day nightmares off of his desk.
But a new problem had reared its ugly head. Inflation was eating him alive and his businesses had become unprofitable.
This was about the fact that as organizations grow and mature, the abilities of the entrepreneur must grow and mature as well. If not the organization will fail.
It’s a lot like being a parent. Your first child is born, and you have no idea what to do. You have to develop the parenting skills that a new-born needs. But by the time you have those abilities in place, your child’s needs are now that of a two-year old and once again, you’re playing catch up.
This is what had happened in this organization. The entrepreneur’s job had gone from the day to day management of individual locations, to the operation of a much larger organization.
He had to put a process in place that watched his incoming costs so that he could raise his prices in a timely fashion to combat inflation. We had already provided the tools that he needed, he just didn’t know how to use them.
We sat down in my conference room, and spent time picking through his financial statements. We taught him a new way of looking at them and the basic methods of analysis that were necessary to maintain his margins.
This didn’t happen overnight. We had three face-to-face meetings over a course of a couple of months. But in the end, there were two results.
First, he knew how to watch his numbers. Second, he wasn’t afraid to raise his prices.
That last part is normally the kicker. Entrepreneurs normally know when their costs are going up, but many are afraid to raise their prices.
But what choice do any of us have? It’s not like our costs are going to go down. It’s possible, but rarely occurs.
The only real choice we have is to raise our prices in response, to maintain our margins, and stay open.
The 2024 returns we completed for the organization showed income around $8.5M with a solid profit. His margins aren’t where they used to be, but they’re improving.
Nothing ever stays the same. Change can be good. Embrace it.
We’re all going to get through this. Let’s get through it together.
Accounting Solutions Ltd. stands ready to complete our mission and purpose of protecting you, your family, and your business. Whether you need Payroll Services, or Accounting and Tax Work, you have but to ask. I’m here and I remain,
Sincerely yours,
Chris Amundson
President
Accounting Solutions Ltd.
773-267-7500
888-310-0300
www.SalarySolutions.net
www.AccountingSolutionsLtd.com
Note that the only professional services provided by Accounting Solutions Ltd. are those specified in a written communication from our office detailing the scope of services to be rendered and the terms and conditions applicable to the engagement.