marc, Author at Maria Sundrica Restaurant Consultant
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Author: marc

13 Jul

Posted at 14:32h in help for restaurants, restaurant consultant, Restaurant Learnings, restaurant management by
4 Likes

there is not enough staff, Brexit and Hospitality

Have you been to the restaurant and been told we do not have availability, yet you can see half restaurant empty?

That is a new norm. It is happening more and more.

Or have you found out that your favourite restaurant now closed earlier and opens later?

Many restaurants now are closed one day per week and may have reduced opening hours.

 

Why is this?

Why are restaurants forced to reduce their opening hours? Turn away prospective customers with tables available? Well, there is simply not enough staff.

When this issue was raised to the attention of the government, their response was evasive at best. Pointing to the COVID economic policies in place they  said that until the furlough scheme comes to an end. It is difficult  for them to know exactly if the UK are  short of staff or not. They also suspect that when in September, government help comes to an end there will be many people looking for a job. 

But what do we do until September?

Maybe. We do not know. But what do we do until September? This summer is an opportunity for businesses to serve the public once again, after an extraordinarily difficult year. Everyone, hospitality as well as the government is losing money until then. And the current hospitality team that is working is very overwhelmed and tired. The less staff we have available the less customers we can serve. 

But I am not completely sure that we will see a rush of staff looking for a job in September. I believe our qualified hospitality workers have left –  as unfortunately COVID hit just in time for Brexit and Hospitality, and they are not coming back. 

I believe our qualified hospitality workers have left –  as unfortunately COVID hit just in the time for the Brexit, and they are not coming back. 

Employee’s did not return to the hospitality industry

They are not coming back as they hear horrible stories from their friends who have tried to come into the UK and they had so many complications and so many of them have been returned. It is not a welcoming image, few would be enticed to return to such a stressful experience.

This feels so wrong. It feels as if we have gone back instead of forward.

We do not need to even talk about the impact on our food bills – it is all gone up. Well, use British products! But guess what, British products have  also gone up in price as they need to import materials from Europe to grow the products in the first place! It is a vicious cycle where the hospitality industry is squeezed tighter and tighter.

In today’s world, when Google is at your fingertips, we do not want to go back to the UK in the 1980’s, when we had tomatoes that tasted as plastic, and we did not have any European products. 

British people travel a lot and we all like to experience  at home some of the pleasures that we had on our holidays. Yet the capacity to offer this moment of foreign flavours is being curtailed.

I am really not sure where we are heading, I hope there is a light at the end of this long tunnel. The problem is that we cannot see it at the moment.

Are you struggling with your business?

Take a look at my services and get in touch today!

11 May

Posted at 08:27h in help for restaurants, restaurant accounts, restaurant consultant, Restaurant Learnings, restaurant management by
4 Likes

Government’s help 

The British Government helped businesses. Hmmm….

Yes, they did but businesses now must pay big time to stay afloat and open. There was a hefty price tag attached to their aid. 

 

As far as I am aware nearly every business received some grants and if your business still showed a profit at the end of financial year (COVID time) you need to pay tax on that. Fair enough. It seems reasonable, but the balance sheet hides the added burden on business.

 

THE STAFF

Furloughed staff. The government was publishing all the time about how we can ‘save’ staff and not make them redundant, and government encouraged us to put workers who were made redundant back on the pay roll as the UK government would help pay wages. Great! So generous! As a result, many businesses, signed up to the scheme and put workers back on the payroll. During the first lock down the government informed they are paying NI but after that it was clear we have to pay NI and it was our choice to keep staff. 

 

END OF THE YEAR ACCOUNTS

Now many are having end of year accounts for last year, that was Covid year, where hospitality did not operate for 5.5 months. Almost half of the time we were in forced closure and the rest of the time was 3 months normal, and 3 months was on various restrictions. Clients are in shock to learn that now they must pay corporation tax on furloughed wages they received from the government for their employee’s. 

Many of these employee’s did not return to the hospitality industry – statistics are showing a 1/3 of employees over the time either did not come back or changed the job to Ocado or Amazon jobs.

Many of these employee’s did not return to the hospitality industry – statistics are showing a 1/3 of employees over the time either did not come back or changed the job to Ocado or Amazon jobs.

GOVERNMENT’S HELP HUMANS
Government’s help. What happened to the hospitality industry?

They must pay 20% tax received on their wages. 

The British government is saying we did this to save your business – really? I do not see the deal very clear and fair. It appears like the midas touch, gold but at a heavy price. 

I have taken calculation of one client’s business – they have received in their last tax year 2020, which ¾ of it was COVID,  a £10,000 grant,  money paid directly in their business as well as they relief on the council tax (which in their case was very little as they had small business relief  for the council tax and they were paying £250 council tax per month). They have also received approximately £100,000 for the staff wages. As business was profitable before and very well managed during COVID, they did not show a loss in their books. But now they have to pay approximately £20,000 in tax on the grants and furlough wages they received. They were forced into a position where they had no choice but to accept government aid – and then charged for the privilege. 

What happen to ‘Linda’ who was receiving furloughed wages while employed by this business?

During the first lock down, she received 80% of her wages, then she had the choice in later months to work for Amazon while still on furlough. A few months later she decided  to pursue her career with Amazon. Her previous employers are still paying tax on her furloughed wages. 

Many employees were just waiting at home,  and returned –  it is thanks to them and their commitment, you can go out and have your dinner or your coffee!

How fair is this? Who has lost here?

I am very much against Brexit, but I thought people of the UK voted for it in order to be able to keep control of their country. One of the comments were – we do not want socialist Europe to control our economy. Sorry? Did they say Europe was socialist? Or I got it wrong, and they meant to say UK is the best socialist country.

Sorry? Did they say Europe was socialist? Or I got it wrong, and they meant to say UK is the best socialist country.

That is all great, but for you to order that cappuccino you need to have that business  employing a  ‘Linda’. And where is this boss now? Crying to HMRC over the repayment scheme. Bank of course would not help records are not good for last year, and they do not take Covid in consideration. 

The question remains will this boss be able to survive all the repayment schemes that the British government’s help gracefully offered?

Thank you, Rishi Sunak. You played your cards well, but I prefer fair play.

Are you struggling with your business?

Take a look at my services and get in touch today!

08 May

Posted at 14:58h in help for restaurants, restaurant consultant, Restaurant Learnings by
32 Likes

We need to be heard – COVID19

The British hospitality industry, which accounts for 35% of all employment in the UK, must make noise if it is to receive the help it needs.

We are currently seeing some restaurant chains reopening to offer takeaways – most chains are opening only 3-4 locations. My experience in the industry tells me that they will lose money by doing this. However, it is a move that is worth the loss for them, as reopening will serve an important marketing purpose – they will keep their brand name in the public consciousness.

Unfortunately, this puts even more pressure on individually-owned restaurants, that would like to follow the example of chains, but cannot afford to do so. Most restaurants do not have the centralised kitchens that chains benefit from.

This, added to a much more limited budget, means opening would kill their business and endanger staff.

A forecast I have prepared for one of my clients is telling. Based on the assumption that his revenue will be 50% of what it was before the crisis, he would lose 4 times as much money by opening, than he is losing while staying closed. 4 times! This is a particularly stark result because the owner in question does not have any outstanding loans or other debt; this was a very profitable business prior to COVID 19.

Unfortunately, I also have to point out that this is the best-case scenario! With social distancing still in full swing, customers might not be eager to hurry back to restaurants, cafes and pubs – they might be

A) scared;

B) in the vulnerable category;

C) financially unable to since many people have not received their wages but still have bills to pay.

I do not think I need to state what restaurant losses would look like if potential earnings were limited to 30%.

And this is the outlook for healthy businesses. There are plenty of businesses out there that do not know how to reduce costs to near zero, or who understand how to access the help that has been made available to them.

And yet, the worst is still to come. Business owners, people who have saved themselves from the virus itself, may begin to experience serious levels of stress and anxiety. Many will wonder how they can survive.

We need to stand united in this fight.

I am writing to the government and I am updating journalists on the situation we are facing. I hope that the government will recognise the seriousness of the problem, and suspend VAT and other taxes until we have defeated the virus, or continuing issuing further grants. Another important thing to keep in mind is that deferring payments for owners in our industry does not help much – unless they can spread the cost over the next few years. We are talking about an industry where margins are already small.

Here is some more food for thought: by opening restaurants while social distancing is still in place, do we, in fact risk killing the hospitality trade entirely?

Why do your customers come to your restaurant? Is it just to eat quietly, keeping interactions to a minimum while worrying about whether or not being out will make them sick? Or do they go out to enjoy themselves and forget their worries?

Do you dream of having your own successful restaurant? Are you passionate about creating beautiful food, but need a little help with the business end?

Running a successful restaurant is a one of life’s most challenging and rewarding experiences. But no one can do it alone. 

 

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