Practical financial advice for hospitality businesses

Your accountant says the business made a profit. Your bank account says you should be worried. Both can be correct. Profit measures financial performance over a period. Cash is the money available to pay wages, suppliers, tax and tomorrow's unexpected repair. The two are connected, but they do not move together. THE PRACTICAL LESSON Profit tells you whether the model creates value. Cash flow tells you whether the business can survive the timing of that value. 1. Tax cash is s

Ask hospitality owners what food and drink should cost and you will hear plenty of confident percentages. The problem is that a bakery, cocktail bar, speciality cafe, pub and tasting-menu restaurant do not share the same economics. A single industry benchmark can be a useful warning light, but it cannot tell you whether your menu is correctly priced. THE BETTER QUESTION Does each product create enough cash contribution to cover labour and overheads, reward the owner and leave

A second site often begins with a feeling: the first location is busy, customers love the concept and the right unit suddenly becomes available. That excitement matters. But a lease converts optimism into a long-term financial commitment. Before signing, you need to know whether the new site can support itself - and whether the existing business can survive the journey to get it there. THE DECISION TO MAKE Do not ask only, 'Could this site work?' Ask, 'How much cash will it c

The tables are full. The coffee machine has not stopped all morning. The till keeps pinging and the team are rushed off their feet. From the outside, the cafe looks successful. But at the end of the month, the bank balance is still uncomfortable and the owner is wondering where all the money went. That is one of the most common traps in hospitality: mistaking activity for profit. Sales are only the starting point Revenue is visible. Profit is what remains after the less visib