What does a restaurant accountant actually do?
A plain-English guide to what a specialist restaurant accountant does and how it differs from a general accountant.
Read article →A restaurant can be full every night and still lose money. Before you buy one, make sure the numbers you are shown are real and that the business will still work once you own it.
1. Check the sales
Ask for POS reports, bank statements and the financial statements for at least the last two to three years. The sales in each should broadly agree. Be careful of claims about cash sales that are not in the records.
2. Look at food and wage costs
Work out the food cost and wage cost percentages for each year. Ask whether the owner works long unpaid hours in the restaurant - if so, you will need to cover that cost yourself or pay someone to do it.
3. Read the lease
Check the rent, the remaining term, options to renew, rent reviews and any make-good obligations. The lease is often the single biggest risk in a restaurant purchase.
4. Understand the staff
Find out who is staying, what they are paid and what entitlements they have built up.
5. Get independent advice
Have your accountant and solicitor review the deal before you sign. Contact us before you commit.
General information only. Not personal tax advice. Contact us for advice on your situation.
