Achieving Financial Clarity: The Profit First Approach in Hospitality
*Adult Advisory - There are some swear words included during this conversation, please be aware before you listen*
In this episode, we’re joined by Gareth Evans, founder of Evans and Co Accountants and a Profit First Professional who brings a fresh perspective to financial management in the hospitality sector.
Gareth shares his inspiring journey from life in a professional kitchen to running a successful accountancy firm — and how adopting the Profit First methodology has completely reshaped the way he supports hospitality clients.
We explore how Profit First, particularly the use of separate bank accounts to manage cash flow, brings much-needed stability in an industry known for unpredictability. Gareth reveals how this approach has helped his firm cut labour costs and boost profitability, while also deepening client relationships through more meaningful, proactive conversations.
If you work with hospitality clients — or want to — this episode is packed with practical takeaways and real-world impact.
Key Takeaways:
- The Profit First approach in action — tailored for the hospitality industry.
- Gareth’s journey from chef to accountant, and how Profit First transformed his thinking.
- How using bank accounts for cash flow has improved clarity, control, and client results.
- Why strong client relationships and open conversations are essential to advisory success.
- Navigating the seasonal cash flow challenges unique to hospitality businesses.
- Profit First as a growth strategy — not just for clients, but for your own firm.
Tune in and discover how Profit First is helping accountants and bookkeepers create deeper impact and more profitable practices — starting in their own businesses.
#ProfitFirst #HospitalityAccounting #AdvisoryServices #Accountants #Bookkeepers #BusinessGrowth #ProfitFirstUK
Transcript
Welcome to Profit first beyond the Book, a podcast that takes you beyond the book with Profit first brought to you by Tim Duncan and the rest of the Profit first professionals, UK and Ireland.
Speaker A:Welcome along.
Speaker A:Gareth, it's really good to have you with us.
Speaker A:And so I'm going to ask you straight away just to give us a little introduction of who you are and why you're here.
Speaker B:Yeah, of course.
Speaker B:No, thank you for having me, Tim.
Speaker B:First things first.
Speaker B:I really like the intro music that's got proper like chilled out beach vibes.
Speaker A:Chilled vibe was the intention.
Speaker B:Yeah.
Speaker B:It's work.
Speaker B:Yeah.
Speaker B:So for the purpose of the recording, my name is Gareth Evans.
Speaker B:I am the founder of Evans and Company, hospitality accountants and also Profit First Hospitality.
Speaker B:Hospitality.
Speaker B:Hospitality.
Speaker B:Hospitality.
Speaker B:Just in case that didn't sink in from those bits.
Speaker A:There you go.
Speaker B:There we go.
Speaker A:For those on the video, you'll see a banner coming up.
Speaker A:So I've fully prepared for this, Gareth.
Speaker A:So, Gareth, it's great to have you on the show.
Speaker A:Now, you've been a Profit first festival since October last year.
Speaker A:I think we probably spoke a month or two before.
Speaker A:And I can remember when I said to you, the next intake is October, you were a little bit impatient and because you wanted to join straight away once you made your mind that this was for you.
Speaker A:So I just want to kind of ask you a little bit about how you came across Prophet first in the first place and what your thinking was about joining us.
Speaker B:Oh, yeah.
Speaker B:Well, without going through too much for Sob Story, long story short was I ended up with an iron fixed in one eye, then in the other eye, then in both eyes.
Speaker B:So I couldn't do much bar listen to audiobooks.
Speaker B:And one of my clients had.
Speaker B:She'd already been through Profit first and read.
Speaker B:Read it, but just couldn't implement it herself.
Speaker B:So she said, can you.
Speaker B:Can you have a look at this and see if it's something you can help me with?
Speaker B:And I went through it and started doing my own business because.
Speaker B:And I.
Speaker B:I turned into a game, like, you know, a bit for anybody old enough to remember.
Speaker B:A bit like bullseye, let's have a look at what you could have won.
Speaker B:And it was.
Speaker B:It was.
Speaker B:Honestly, it's.
Speaker B:It really hurt me when I was kind of going through everything going, what the am I actually paying for?
Speaker B:Really sorry for swearing on your podcast, Tim, but it's.
Speaker B:It's gonna keep happening, as you well know.
Speaker B:So you might.
Speaker B:I don't know if you have to put an age rating on it or something like that.
Speaker B:I.
Speaker B:I'll try and keep it to a minimum.
Speaker B:But anyway, I'd.
Speaker B:I kind of gone through it and thought, oh my God, like I'm.
Speaker B:I'm missing a trick here.
Speaker B:I was like everybody else, you kind of doing that weird mental arithmetic when the bills are coming out, going, well, I've got this for this and that for that.
Speaker B:The balance is this.
Speaker B:And let's have a look at the cash flow forecast and let's try and map out what's due and what's in there and what's not.
Speaker B:And I'm probably similar to most accountants in the fact that, yeah, my client's books might be stellar, but mine, oh my God, it looks like Rush has just been in and done a number on it because you're not getting paid to do your own.
Speaker B:So they get left on last minute.
Speaker B:But it was kind of a bit of a chaotic mess.
Speaker B:And once I've been through the book, you know, well, two, three and four times within the space of about six weeks, it's like I, I need to do this.
Speaker B:So obviously filled it, add a couple of pints as you do, filled out the website.
Speaker B:Because I thought if I don't do it now, I'm gonna kick this down the road and it may never happen.
Speaker B:But it, let's, let's go with it, see what happens then obviously you reached out.
Speaker B:Tim, you put me in touch with.
Speaker B:Is it Amanda?
Speaker B:Sorry, yeah.
Speaker B:I don't know where I got Amanda from at all, mate.
Speaker B:I had a good chat with her and I was like, yeah, this, this seems like it's for, for me.
Speaker B:And I think, I know it sounds daft, but when you're, when you're choosing something like this, like I've previously done dent and I did get a lot out of that, but that's 12 month term.
Speaker B:So if you're not enjoying it, it's kind of like, well, I'm stuck with this now and I don't want to be in it.
Speaker B:So know with you guys, it's obviously, if you're not getting anything out of it, then feel free to leave because you don't want to.
Speaker B:You don't want to suck up all your time and energy with that.
Speaker B:And it was, it was, oddly enough, that was one of the selling points for me.
Speaker B:I'm like, well, these guys are confident that it can do some good.
Speaker B:Otherwise they tie me in, which is.
Speaker B:I'm exactly the same with the accountancy practice, we run on 30 day terms.
Speaker B:If you're not happy being here and I'm not happy with you being here, then I don't want you here and you shouldn't have to stay.
Speaker B:So it was a selling point.
Speaker B:But I am, as you know, Tim, I'm very much one of those people that if I want to do something, I just kind of go and do it.
Speaker B:I don't like waiting, but I did.
Speaker B:And then I steamrolled through everything as quickly as humanly possible, absorbed as much as possible, spoke to as many clients about it as possible, did all of the, the beta testing.
Speaker B:One of the favorite things for me is, is the online portal, and I'm.
Speaker B:I'm kind of sad that it's being pulled from the US Now.
Speaker B:I know that you guys are doing everything to get it going live over here, but it's, it was, it was.
Speaker B:Honestly, it was one of my favorite parts of it.
Speaker B:The fact that I could charge through that at my own pace without having to kind of almost, you know, classroom style it and wait for everybody to sort of cap.
Speaker B:And even when it got through it all, there was still more in there for me to then go through, which just, it massively aided in kind of drawing out my own plan for profit first.
Speaker B:And then I think month on month, I've gone and done my own profit assessment again and again and again because I like shiny objects, Tim, so I, I need to curtail it with stuff like that.
Speaker B:So I now have my own shiny object pot in Monzo for, for the random stuff that I want to test and try and, and figure out.
Speaker B:But having that in the separate part also, you know, when that starts running dry, it makes me look at it and go, oh, crap.
Speaker B:I kind of need to reevaluate this again.
Speaker B:It's, it's, it's probably.
Speaker B:This is.
Speaker B:This has definitely been one of the best things I've decided to take up.
Speaker B:Yes, we have gained clients from it.
Speaker B:Yes, we have moved over existing clients to IT and new clients who've come into the practice.
Speaker B:We've incorporated profit first straight into, into our fees and into the way that we work.
Speaker B:So it's, it's been really worthwhile, but it's also, it has saved me a chunk of money by kind of about even.
Speaker B:And it sounds harsh evaluating the people I've got working for me to go, do I really need you here?
Speaker B:Or if I just kind of got another pair of hands?
Speaker B:Because I thought we've needed another pair of hands.
Speaker B:And as it turned out, yes, I was.
Speaker B:And, and yes, it did so by, by kind of following through with profit first and, and sticking with It.
Speaker B:Because I'm terrible at holding myself accountable.
Speaker B:Our labor percentage came down.
Speaker B:Has come down over the last.
Speaker B:Yes.
Speaker B:Since listening to the book last June, up until now, our labor percentage has come down from probably about 65 down to 49.
Speaker B:Our turnover has gone up and profitability in other areas has gone up.
Speaker B:So I'm, you know, I'm very transparent with figures.
Speaker B: So I think our: Speaker B:And.
Speaker B:Sorry.
Speaker B: Our: Speaker B: And our: Speaker B:So it's.
Speaker B:It's.
Speaker B:It's a massive difference, mate.
Speaker B:That.
Speaker B:That's the difference between, you know, me and my wife being able to move house and not just by putting in a bit of graft.
Speaker B:And it wasn't even for the full financial year, was it?
Speaker B:It was.
Speaker B:It was nine months of it.
Speaker B:We had that impact in nine months.
Speaker B:And it's exciting, mate.
Speaker B:We've.
Speaker B:We've paid for a holiday to Tenerife on it in April.
Speaker B:And I know this sounds like a bit of a.
Speaker B:Almost feel like I'm on the shopping channel when I'm saying like this.
Speaker B:Just for.
Speaker B:For 19.99, you can do it too.
Speaker B:It did.
Speaker B:It.
Speaker B:It did require a lot of graft and.
Speaker B:And a lot of work to go into it.
Speaker B:But fortunately, my management accountant, Wendy, has been really supportive of it.
Speaker B:She's kind of looked at it and gone, yeah, this is typically the sort of stuff I was doing 15, 20 years ago in a different format with different bells and whistles.
Speaker B:But this is what we were doing when we were going into pubs to do management accounts.
Speaker B:Take this out here.
Speaker B:Put that there.
Speaker B:So when I explained it to her, she was like, yep, got you.
Speaker B:Perfect.
Speaker B:I will start speaking to the.
Speaker B:The clients who need this about this.
Speaker B:So Wendy has become my biggest sales tool.
Speaker B:Sorry, Wendy, but you are a tool.
Speaker A:She's gonna love listening to this.
Speaker B:Oh, she is.
Speaker B:But, yeah, she's.
Speaker B:She's been.
Speaker B:Yeah.
Speaker B:Almost integral to it and she's taken a lot away from it as.
Speaker B:As well.
Speaker B:Yeah.
Speaker B:Sorry, before I carry on, Tim, have you got any more questions you want to.
Speaker B:You want to throw in there?
Speaker A:Otherwise I'm enjoying lifting to what you're talking about.
Speaker A:Gareth, Obviously, the success of joining Profit First Professionals is always great to hear.
Speaker A:Financial numbers, percentages behind that is always great for us to hear.
Speaker A:What I liked about.
Speaker A:By the way, I will just lay your kind of concerns.
Speaker A:Yes, we are building our own portal, but The PFU profit first university that's ran in America is now being moved over to another platform.
Speaker A:So we will be migrating everyone across onto that platform.
Speaker A:So you still have access to all of that.
Speaker A:We're going to, so we're going to do like a jewel thing initially going to bring new members into our new platform, see how it goes, but we're still going to give them access to the American one while there's a transitionary period and we're just going to build and build and build until we can build ours into such a good, you know, whole all round thing.
Speaker A:This is going to take a long time.
Speaker A:It takes a long time to build up resources and stuff.
Speaker A:So you'll still have access to that, as will anyone else.
Speaker A:I, I love the fact that WEND is actively involved so I want to, I want to point that out.
Speaker A:A lot of people come and join us and they end up being the bottleneck in their own business again.
Speaker A:So they've moved away from the compliance, they've moved into adding advisory but they're the only person adding the advisory or the profit first advisory and they become a bottleneck again in their business.
Speaker A:So we very much encourage our members to include their team.
Speaker A:And so with you, Wendy's been along to quite a lot of our post certification calls and some of our community calls and she joins in the call and it's absolutely fantastic to have team members come on, really invest in profit first within your business on your behalf to take the pressure from you.
Speaker A:So I wanted to highlight that and the last thing I want to highlight from what you said, if that's okay, is yeah, we don't tie people into a contract.
Speaker A:And why would we, you know, because we know what can be achieved if you work hard, pull your sleeves up and really adapt the principles and live and breathe profit first in your business.
Speaker A:And yeah, if you, if you decide you can't do that or you don't want to do that, we're not going to hold you into a contract because we would rather have people in that are proactive and are really making things happen for them and their clients.
Speaker A:So, so that's, that's the points I've picked up from what you've said so far.
Speaker B:Yeah, absolutely Tim.
Speaker B:I suppose a big one.
Speaker B:Just on the back of what we've kind of, we've been through there bottleneck.
Speaker B:So every accountancy practice owner, doesn't matter what they say, they, they all have, we've all got the same issue of being the bottleneck in there and I've.
Speaker B:I've honestly tried thousands of different things, different waves of, of implementing stuff and, and whatnot.
Speaker B:And I suppose, Sorry, sidestepping from profit first a little bit on this one.
Speaker B:It will come back full circle, don't worry.
Speaker B:Okay, where the.
Speaker B:Just a bit of advice on that one.
Speaker B:The, the thing that worked the best for us was one was me getting shingles and realizing this is how much everything kind of relies on me.
Speaker B:There are nine of us.
Speaker B:At the time there were ten.
Speaker B:But again, profit first didn't need ten.
Speaker B:Oh, now there's eight of us.
Speaker B:Didn't need a.
Speaker B:Didn't need nine, but that's by the buy.
Speaker B:So we started documenting every single process and procedure, no matter how small.
Speaker B:I went through a busy period where I think we had, we had somebody retiring, somebody else had.
Speaker B:Did we disappear then?
Speaker A:Just slightly.
Speaker A:You're back again now.
Speaker B:That's fine.
Speaker B:Sorry, sorry.
Speaker B:So long and short, we had two people having to leave, one that I took on and sacked because being honest, she was cracked and wasn't.
Speaker B:Wasn't working.
Speaker B:And we had a load of people coming in one go.
Speaker B:And I'm like, I cannot.
Speaker B:On board and off board all of these people in one go.
Speaker B:I need a way of doing this.
Speaker B:It's.
Speaker B:It's a monotonous task that doesn't need my, my intervention.
Speaker B:So it was like, I'll do it for the admin.
Speaker B:So I did that and I started recording all of that and said, right, Mark, first job for you, welcome to the team.
Speaker B:But you are now gonna basically do all of the onboarding for everybody else as new.
Speaker B:Cleano has the videos for everything.
Speaker B:Kind of off you go, make sure you can follow it and then re record it yourself.
Speaker B:So that was, that was the first kind of step for it.
Speaker B:It was.
Speaker B:It doesn't matter what process you start with.
Speaker B:It's.
Speaker B:It's about compounding effectiveness, isn't it?
Speaker B:So it was every little task just recording it as you're doing a great deal of sense.
Speaker B:It, it doesn't, it doesn't need to be perfect.
Speaker B:It doesn't need to have bells and whistles, it doesn't need a fancy video.
Speaker B:Just can do it as you're going along.
Speaker B:And we did.
Speaker B:And that was part of the realization for me that I don't actually need all of these people in here.
Speaker B:I just need to make sure that everybody else knows what they're doing and, and that's genuinely how we started.
Speaker B:So when it, when it came around to profit first and I'd gone through the certification and we passed through that.
Speaker B:I was looking at it going, I know that this is, this is worth a lot of money.
Speaker B:It can be life changing for the right kind of client.
Speaker B:But I also looked written, Thor, we're already offering operating as the, the full finance function for, for a lot of bars, restaurants and hotels.
Speaker B:I can't now put this on my plate as well.
Speaker B:So we went a bit of a different way to most people.
Speaker B:So we, because I like the course element of, of PFU so much was like, I need this.
Speaker B:So I built up my own and I asked a couple of other industry experts in hospitality that I'd worked with for a long time, what you think of this?
Speaker B:Can you help me with it?
Speaker B:And honestly, you, you'd like both the guys, Louise and Kieran.
Speaker B:But Louise's first response was, seems like a bit of a cult this.
Speaker B:And it is, it is, it's that the book's very Americanized and when you look at Mike, he's so animated and it is the typical Americanisms of arms waving everywhere.
Speaker B:But I said, no, no, let's, let's have a look at it.
Speaker B:And this is what I've done with it.
Speaker B:And she, she, she then went through the book and went, yeah, this makes sense.
Speaker B:Let's have a chat with Kieran as well.
Speaker B:Kieran went through it and he went, yeah, this, this makes perfect sense.
Speaker B:I've started doing it myself.
Speaker B:Yeah, let's, let's go for it.
Speaker B:So rather than doing it on my own, I looked for other people within my niche that were, I knew I could work with and trust that have things from a different point of view and the like.
Speaker B:And we set it up that way so we have a fully functioning course with a shitload of support.
Speaker B:We've got zoom calls running twice a week.
Speaker B:Sorry, twice a month.
Speaker B:Twice a month.
Speaker B:Correct that one quick.
Speaker B:Yeah.
Speaker B:So we've, we've got those calls running twice a month.
Speaker B:One is a round table with me, Louise and Kieran, so we can run through everything, profit first.
Speaker B:And the other one is a call with other industry experts.
Speaker B:So whether you're in hospitality and need to learn about data or you need a 101 on marketing or in how to take care of your team properly, that sort of thing.
Speaker B:We've got all of these people coming in or if you're in the interest in, if you're in the industry, you'll have noticed the harshness of a lot of the EHO checks going on at the moment.
Speaker B:People are being blasted for absolutely everything that they would not previously have been colored for.
Speaker B:So we've also got somebody coming on to talk about how to get and maintain 5 star hygiene ratings because it's far more difficult than it sounds.
Speaker B:It's not just a case of making sure things are clean.
Speaker B:So many processes that go into running a restaurant that it's untrue.
Speaker B:So one of the main bits that I liked about Profit first, or do like about Profit first, is that it's quite flexible and within that, because Profit first, the book G gives you a great kind of setting, but it's not everything and it's, it's obviously not unique to any particular industry.
Speaker B:So we were like, well, there's other things that people can do to be profitable that don't exist in the book.
Speaker B:It's having the correct marketing plan.
Speaker B:It's, it's the guest experience.
Speaker B:It's.
Speaker B:There was so much in there.
Speaker B:And like, this is not technically part of Profit first, but it needs to be part of my profit first.
Speaker A:Because.
Speaker B:We, we can't just.
Speaker B:As much as I love to believe that finance runs everything and it is the center of most things, it's not necessarily how you make money and everything.
Speaker B:It's how you save money.
Speaker B:It's how you change process.
Speaker B:It's.
Speaker B:It's how a lot of things happen.
Speaker B:It's definitely the how, but it's not necessarily the what or the why.
Speaker B:Yeah, so that's what we kind of set out to do was to build this more encompassing.
Speaker B:I don't like using the term business development tool because I feel like most people doing business development are tools and I'm really sorry about that, but it tends to be a lot of the same people spouting a lot of the same advice for an absurd fee.
Speaker B:But what we wanted to put together was something that restaurant owners could, you know, go through in their own time.
Speaker B:Bought the scent checks in there from us and they get the results if they followed it through.
Speaker B:And, and they do.
Speaker B:Don't get me wrong, it's still, it's still early days.
Speaker B:I mean, we've had clients running it for about six months and we're seeing definite improvements.
Speaker B:But you know, we need another six months before we can look and go, you know what, this has been successful or this needs changing and changing fast.
Speaker B:And that's the hard part, far part for me, because I like change and I like continuous change.
Speaker B:As long as it's for the better.
Speaker B:What, what's the Japanese principle?
Speaker B:Is it kaizen?
Speaker B:Change, change for good?
Speaker B:That's, it's kind of how I like to operate.
Speaker B:It's very difficult for me to kind of sit on my hands and go, let's see how it turns out.
Speaker B:No, I want to know now and I want to fix it now and again.
Speaker B:Feeding back into the whole profit first element and the, the cash flow management side of it.
Speaker B:One of the great points for us that I'm speaking to existing clients or potential ones is that yes, we do do our management accounts.
Speaker B:Yes, we do look at the balance sheet and the cash flow.
Speaker B:But looking at cash flow in hospitality is.
Speaker B:It's almost a fruitless endeavor Unless you can update that every single day of the week.
Speaker B:It's not a service business.
Speaker B:It's much harder to predict.
Speaker B:So we looked at it and went, well, if we set these bank accounts up right with, with profit first, rather than waiting for, you know, a week or two after the end of the month, for me tell you that your labor's.
Speaker B:If we're allocating the correct percentages to these pots or bank accounts and we don't have enough money to pay people at the end of the week or the end of the month, then we know straight away that we've balls it up somewhere and we can then go and investigate.
Speaker B:And if that means we need to adjust the labor percentage then so we, we don't use it in lieu of management accounts, but it provides a great bit of support that clients can look at and go, okay, I know I've overspent.
Speaker B:Then we use the management reports to look at it and go, this is where you've overspent and why it's happened.
Speaker B:Right, right the way through to weather forecasts and variations in temperature.
Speaker B:And I think one, one of our management accounts even has wind speed in there somewhere.
Speaker B:Tim.
Speaker B:Yeah, just it's, it's hospitality made the, the weather affects all of it, doesn't it?
Speaker B:Yeah.
Speaker B:So it's as mad as it sounds.
Speaker B:We, we, we do tend to do a comparison between year on year of.
Speaker B:This is why it looked like this last year versus this.
Speaker B:And this is where the bank holidays were.
Speaker B:And as much insight and detail as we can to figure out why it's gone right or why it's gone wrong.
Speaker B:But yeah, profit first has been that, that.
Speaker B:It's been the first tool for these clients, if you like.
Speaker B:Is your bank account showing the right numbers?
Speaker B:Yes.
Speaker B:Brilliant.
Speaker B:We're on track.
Speaker B:Let's see what we can do to improve.
Speaker B:No, it's not showing the right numbers then.
Speaker B:Okay, here's the management report.
Speaker B:Where have you it to put it politely.
Speaker B:Well, no, to be fair, that's how I speak to.
Speaker B:So I speak to people anyway.
Speaker A:So I, I think it sounds, I know for a fact you are an expert in your field of hospitality as well as being an expert as an accountant and I think that massively helps how you can dig deeper and deeper into the issues that hospitality industry suffer from at times.
Speaker A:But being able to look at things initially from the profit first perspective, then the management accounts perspective and then dig deeper into those problems and understanding exactly what it's like.
Speaker A:Because you were in the kitchen, weren't you?
Speaker A:You were a chef originally, so you know exactly what it's like to be that person.
Speaker A:And so you can dig so much deeper into that industry.
Speaker A:It gives you such an advantage over anybody else within this sort of niche that you're delivering results for.
Speaker A:So what you've said about your clients and you've seen, it's been six months, so it's too soon to look at the results.
Speaker A:And of course we're quite open about this, aren't we, that profit first isn't a quick fix, but it is small steps to move forward.
Speaker A:And the real world is you will have clients and you'll say how the profit first part's going.
Speaker A:Perfect.
Speaker A:Yet let's move on, let's talk about something else.
Speaker B:Great.
Speaker A:Or can we make it better or.
Speaker A:No, it's not working and this is why.
Speaker A:And then you can solve those problems because real world things happen, don't they?
Speaker A:And in hospitality as well, the margins, etc, it's very difficult industry or it can be, from my understanding, you know more about that.
Speaker A:But profit first gives you the opportunity to open those conversations up nicely and have clarity on what is actually happening with the money, doesn't it?
Speaker B:No, that's, that's absolutely it, mate.
Speaker B:So on paper, hospitality can be profitable, but it takes, it takes one bad month to destroy cash flow.
Speaker B:So I, I did a good bit of research over, did this about six months ago.
Speaker B:So we've been going for about four, four and a bit years at that point.
Speaker B:So I went back every single client we've got, looked at all of the reports we've done for everyone, cash flow, the whole lot.
Speaker B:And I worked out that it takes roughly, it takes about 18 months to get out of a 15,000 pound cash flow deficit.
Speaker B:If you've got a turnover of 400k plus.
Speaker B:Okay, so it's a long time to recruit 15k.
Speaker B:You know, I don't need to go into too much detail whatnot, but like for Me, if I run short on 15k, we can do a bit of a campaign, we can go and plow through some year ends early for the one off ones and we can recover it.
Speaker B:Hospitality can't.
Speaker B:The minute you're shy on that, you've, you've missed the VAT return or you've underpaid it or you've missed paye, then the fees and fine start mounting up and, and so on and so forth.
Speaker B:Then a supplier gets behind, something breaks in the kitchen and yeah, it can be a, it can be a real slippery slope really quickly.
Speaker B:So what we're trying to do with not, not just our profit first clients but all my clients is go through and say, you know what, if you don't want to be a part of profit first because you don't feel like you've got the time for it, that's absolutely fine.
Speaker B:But what you should really, really, really do regardless is set up, excuse me, is set up these separate bank accounts and pots.
Speaker B:Make sure you're allocating it, you know, if, if you don't want to go through profit first, work out a percentage you're comfortable with and make sure one of your accounts is the, the, it's the fan account.
Speaker B:Because in hospitality it's, it's never a case of if it's, it's always a case of when something goes wrong, when something breaks, when staff leave.
Speaker B:Not such a.
Speaker B:Sorry.
Speaker B:Interesting factoid.
Speaker B:Hospitality generally has a turnover of the.
Speaker B:The UK averages about 89% in, in staff turnover.
Speaker B:Liverpool is 58.
Speaker B:Okay.
Speaker B:So I'm not saying the people from Liverpool are better made, but we kind of are.
Speaker A:I'm not going to argue against that point.
Speaker A:So, so it's in, it's interesting though the level of information to do with hospitality that you go to and it just highlights all these things that you can help your customers with.
Speaker A:So yeah, thanks for sharing that.
Speaker A:While you've been talking, it's been, it's.
Speaker A:You probably don't need to hear this but I'm going to say it anyway.
Speaker A:But it take me back to my younger days.
Speaker A:I worked for a large local bakery that had 90 to 100 shops in this area.
Speaker A:And I can remember the guy I worked for who was the finance director always used to do his forecast in and he used to look at the weather forecast as well because of the effect on footfall in the high street and how many people would likely to be coming in and out of the shops and stuff.
Speaker A:So yeah, it's really interesting you mentioned about the weather because it just took me right back to that.
Speaker A:Those conversations right back years ago, you know, probably before I had kids.
Speaker A:You know, it's going back a long time now.
Speaker A:But it's interesting these experiences, they come back, don't they?
Speaker A:And you get reminded of these things.
Speaker A:So appreciate you sharing that is to give me some good memories there.
Speaker B:No, it's.
Speaker B:It's no problem at all mate.
Speaker B:It's.
Speaker B:Yeah, the weather bit is interesting and one of the bits of advice that we do give to our clients who are you know, looking at opening their second or third site is pay attention to seasonality.
Speaker B:Not necessarily spring, summer, autumn, winter, but we have, we have a couple of places where they do exceptionally well in January and February.
Speaker B:They're students orientated so the students are all back in uni so they're, they're packed out because students don't give a what time of year it is.
Speaker B:But if the pubs open, they put the pubs open or the bar or the experience they want to have.
Speaker B:I'm not saying all students are alcoholics.
Speaker B:I certainly was.
Speaker B:It's.
Speaker B:I know that the landscape has changed dramatically since but the advice that we give to these people is if you've got a site that is heavenly dependent in one area, like there being some for you to use your terrace and have those additional 50 seats outside.
Speaker B:The second site that you need to look at needs to be a warm and cozy pub sort of thing.
Speaker B:Something that does particularly well when the weather's crap, whether that's a fine dining restaurant because again they don't tend to suffer with, with seasonality so much.
Speaker B:They just tend to be relatively even keel all year round.
Speaker B:Or, or whether it is that warm cozy bar or if you're the other way around, go and find where you've already got the warm and cozy.
Speaker B:Go and find something on the.
Speaker B: it's sunny you're going to do: Speaker B:It's.
Speaker B:Don't ever do like for like.
Speaker B:It's because otherwise you're going to face the same cash flow issues across all your sites.
Speaker B:And that.
Speaker B:That's.
Speaker B:That's the things.
Speaker B:Tim, I'm gonna swear one last time or two last times if, yeah if, if you're in a particular season with one site then obviously you're doubly in a particular season with two sites if they're way.
Speaker B:So we always want to see some form of variation based on, based on not.
Speaker B:Not just necessary style and size but seasonality as well.
Speaker B:We Want to be busy all year round.
Speaker B:The fact of the matter with hospitality now is that sometimes being busy all year round requires two venues operating at completely different wavelengths.
Speaker B:But to do that, just to circle it back to profit first, you've got to have cash.
Speaker A:Yeah.
Speaker B:So we made it, we made it a new site account as well, which again our larger or expanded places do have a bank account that's purely dedicated for, for opening a new site.
Speaker B:Technically it's the profit hold account but you know, let them think what they want to think.
Speaker A:Yeah, I understand.
Speaker A:Yeah, it's, it's great to hear these extra accounts that you open because obviously when people read the book they just see the standard basic profit first accounts as per the books written.
Speaker A:But we find with all of our members and with all the industries they're working in, there's so much opportunity to open additional pots for strategic reasons like you've just shared with us.
Speaker A:So Gareth, I want to ask you about so profit first of hospitality, Evans & Co.
Speaker A:As well, which is also accountancy and profit first for, for hospitality business.
Speaker A:Is there a niche within the niche of hospitality?
Speaker A:Are there certain types of businesses you work with within hospitality?
Speaker B:Yeah, so for there are being very honest, there are a chunk of accountants out there that will deal with wet lead pubs.
Speaker B:So you know, if you're interested in that, go and have a look at the British Institute of Innkeepers.
Speaker B:They have their own recommended people as far as I am aware.
Speaker B:We, or I am the only chef to turned accountant that purely deals with hospitality and looks at it from a back of house angle within the uk.
Speaker B:Caveat that one.
Speaker B:I'm sure there'll be other people elsewhere but for, for us we typically work with, our main criteria is are you doing a minimum of 500,000 a year?
Speaker B:Because with that we can affect change quite well.
Speaker B:We do work with a couple of clients smaller than that but being, being totally transparent.
Speaker B:It depends on how fun they are to work with because you know, I'm, I'm in this for the long haul, mate.
Speaker B:I'm not looking to build and sell an accountancy practice.
Speaker B:I'm looking for nice people to, to work with and if we, that means we take a little dip on revenue to, to transform something into, you know, the next Wetherspoons or Google's Donuts or Beef Fried chicken.
Speaker B:Dropping, dropping names there because we look after some of them.
Speaker B:Not Witherspoon obviously, but if you know we can work with somebody that then turns them into that, then that's the fun bit for me.
Speaker B:But we do typically find that 500k plus bar or restaurant is our kind of golden triangle, if you like.
Speaker B:Just because it's so much easier to effect change at 500k than it is to do it at 150, 200.
Speaker B:Especially with the way that we operate as a full finance department.
Speaker B:Again, I don't mind saying this out loud.
Speaker B:So our typical fees, our average starting fees, if you like, between 12 and 15K.
Speaker B:We do have clients that are on much more.
Speaker B: So a restaurant doing: Speaker B:It's not going to be affordable and it's not, it's not.
Speaker B:I, I wouldn't feel nice taking it from them.
Speaker B:I had somebody tell me once that it's.
Speaker B:It's not up to you to decide what people can and can't afford.
Speaker B:And my answer was, well, I'm.
Speaker B:Is exactly my job.
Speaker B:So.
Speaker B:Yeah, yeah.
Speaker B:Bars and restaurants for the most part with, with us, Tim, something that's been going for at least a year.
Speaker B:So they, they've got a good idea of where things have started to go wrong, what they're doing right and what can be fixed.
Speaker B:They also tend to be the most fun to work with.
Speaker A:Yeah, and, and, and I know you, you said that as well.
Speaker A:A personality of the person running the business.
Speaker A:You want to get on with them, you want a relationship with them.
Speaker A:And I know you've got a good relationship with all of your clients and.
Speaker A:Because I know, I know the answer to this question, but I'd like you to share how often you actually speak with your clients.
Speaker A:You know, how often do you, do you pick up the phone and chat to them?
Speaker B:So for it's, it's always within the month.
Speaker B:Every month.
Speaker B:I have a chunk of clients that will be week by week.
Speaker B:Some of them might need three or four calls within a week.
Speaker B:But that's my role.
Speaker B:One of the best things I did was started to hire people who are better than me at doing the, doing the, you know, the, the statutory work, appliance work, if you like.
Speaker B:I nearly called it grunt work, but it's not the biggest part of what we do.
Speaker B:I just hired better people than me to deal with that so that I can, you know, long and short flounce belt.
Speaker B:Oh, make sure things are, things are running properly, clients are happy and fix any issues as they arise because I've got the capacity to do so and then jump in and help the team as I want to come.
Speaker B:But for me, that's the most important bit.
Speaker B:We all make mistakes and we all make errors.
Speaker B:But if you're communicating with your clients on point all the time, I'm not saying that errors can be, you know, forgiven, especially if the, if they're particularly bad.
Speaker B:But clients are much more accepting of things going wrong when you're willing to speak to them.
Speaker B:So that's.
Speaker B:It's got to be.
Speaker B:My job as a business owner is to make sure that people are happy.
Speaker B:You know, my clients and my team, that's.
Speaker B:That's what I see my role as now.
Speaker B:Try and make life as easy as I can for everybody that works with me and for me, which in turn makes my life easier as well.
Speaker A:Yeah, and I just wanted to ask that.
Speaker A:I deliberately asked you that as we were talking about your niche within a niche and the customers you work with, because I knew the answer.
Speaker A:Bit of inside info, obviously there as we've built our relationship up.
Speaker A:But I wanted to share that because I think there's probably a lot of accountants and bookkeepers out there that maybe don't speak to their clients regularly.
Speaker A:And I just think people are missing an opportunity.
Speaker A:So I just wanted to highlight that point from you, if that's okay.
Speaker A:Relationships are everything, aren't they?
Speaker A:You know, in any walk of life and within business it should be no different.
Speaker B:No, you, you're absolutely right and please don't get me wrong that there is room in the market for accountants that just do the erm.
Speaker B:And just do the self assessments and, and go for a volume or, you know, or as much as they need to live whatever way they.
Speaker B:They kind of sort it.
Speaker B:But that's.
Speaker B:It's.
Speaker B:It's not for me, it's not fun.
Speaker B:You don't learn anything about people.
Speaker B:You don't understand where they're going and what they're trying to do.
Speaker B:And you miss.
Speaker B:You do miss opportunities for it.
Speaker B:But I do understand that some people just want to do the year end and just want to get it out the way and just want to make basic.
Speaker B:Do the compliance element.
Speaker B:And there's absolutely nothing wrong with that.
Speaker B:But I, I'm seeing more and more on the inquiry course that we have.
Speaker B:It's.
Speaker B:It's along the lines of I need more proactivity or, you know, my management accounts, not my.
Speaker B:Sorry, my accountants not give me a P L or my management account.
Speaker B:So.
Speaker B:Well, have you asked for it?
Speaker B:No, no, because I thought it was like a normal thing to do.
Speaker B:I'm like, no, it's a more normal thing nowadays.
Speaker B:However, historically, accountancy is compliance.
Speaker B:It's not business advisory.
Speaker B:It's it's not changing the way people think.
Speaker B:It's here's your year end and see you in 12 months time, there's your bill, off you go.
Speaker B:But we're seeing that more and more is business owners don't want that.
Speaker B:Life's getting harder and businesses are getting much more difficult to run.
Speaker B:They, a lot of people now is starting to see accountants more as gps if you like.
Speaker B:You know, you don't necessarily know the answer but you sure as hell have got to be able to find it or at least know the person that will be able to do it.
Speaker B:And that's, that's how we operate.
Speaker B:If we can't do it, let's find somebody that can.
Speaker B:Let's keep everybody happy, keep in contact and honestly, best things that you can, best things that you can do.
Speaker B:If you're looking to, if you're looking to grow your business into something a little bit more than year end of compliance only just to kind of sorry appreciate that we're pressing for, for time but yeah, just again in the interest of transparency we, we look after round about 45 to 50 companies and our turnover is half a million.
Speaker B:We do that now with, with eight people in the team, including myself.
Speaker B:So it's essentially I don't want to play down what we do at all but we, we do more with, we, we get more working with less being able to provide a much more in depth service.
Speaker B:Not saying compliance is not a good service, but I can guarantee, I can guarantee you that people just doing compliance only are not having the conversations that we're having and don't get paid the fees that we're getting paid for doing it.
Speaker B:So if you're wanting to up your game, reduce the number of people you're working with and help who you've got because we're fortunate now.
Speaker B:But I'm sure every, every accountant that you and I have ever spoken to, Tim, probably has list clients that they don't really want to work with but it pays the bills.
Speaker B:Oh yeah, absolutely.
Speaker B:We've well and truly moved past that now to you know, we work with the people that we can help to change that we can help to build a better business with.
Speaker B:You know, it's that, that added I hate, hate catchphrases and one of my favorites is be the change that you want to see in the world kind of thing.
Speaker B:So they're the people that we want to work with, those that want to do better, those that want to improve their lives, those that you know, want to look after their Their, the people they work with and look after their families at home and the like.
Speaker B:And that's, that's the fun bit for me.
Speaker B:It's really rewarding being able to do it.
Speaker B:And I don't feel like you get that with compliance.
Speaker B:You get a lot of money, but, you know, if you're in this for the long haul, money isn't the, the be all and end all.
Speaker B:We're fortunate that we get a lot of money and we do good with it.
Speaker A:Yeah, I totally agree.
Speaker A:Thanks, Gareth, for explaining that.
Speaker A:And my final question is any accountants, bookkeepers and coaches listening?
Speaker A:What would your advice be when it comes to profit first?
Speaker B:If you're not already doing it, do it.
Speaker B:It's worst case scenario, you're gonna throw away a few quid and lesson learned, best case scenario, you're gonna do what I did, massively reduce your, your labor spend and just have a lot more cash in the bank at the end of it.
Speaker B:And yeah, it's, it's as simple as that, mate.
Speaker B:We don't need a big spiel on it.
Speaker B:Just have a go.
Speaker B:Stop overanalyzing and give it a go.
Speaker B:Yeah, Love it.
Speaker A:Thank you so much.
Speaker B:Worst case scenario, you've got a tax to double expense.
Speaker A:I'd like to think we can give more than that, but I, I appreciate that.
Speaker A:Thank you.
Speaker A:I've just put in your, your.
Speaker A:Your main website for people watching the video down.
Speaker A:Evans and co uk We've already shared this one, so I'm going to share that as well.
Speaker A:So let's just, just get people.
Speaker A:So if people want to contact you, this is how they can contact you.
Speaker A:Profit first, hospitality.com.
Speaker A:and also through, I believe through Instagram.
Speaker A:This is one of your links as well, which is each accountants.
Speaker A:Have I got that right?
Speaker B:Yeah, you have.
Speaker B:We.
Speaker B:We do also have LinkedIn and Facebook, but I'll be honest, I do not post any of my own things and I very rarely check messages on LinkedIn because you know what they're typically like.
Speaker B:But Instagram, yeah, I respond to them all the time.
Speaker A:There we go.
Speaker A:So that's the place to get hold of Gareth, if you want to.
Speaker A:Gareth, thank you so much for joining us today.
Speaker A:I really appreciate you sharing everything that you've shared.
Speaker A:Your, Your expertise from becoming from a chef to an accountant.
Speaker A:Like you say, the only one in the UK to have done that.
Speaker A:Certainly the only profit for a special I know in the world that's done that as well.
Speaker A:So there's an extra edge for you as well.
Speaker A:So thank you so much.
Speaker A:It's been a pleasure chatting to you.
Speaker A:Thanks for joining me.
Speaker B:Thank you for having me.
Speaker B:It's been wonderful.
Speaker B:Tim, thank you for listening and sorry about the swearing.
Speaker A:Don't worry.
Speaker A:Thank you for joining us on our podcast today.
Speaker A:Profit First Beyond.
Speaker A:The book was brought to you by the Profit First Professionals UK and Ireland team.
Speaker A:If you'd like to find out more about Profit first or becoming a Profit first professional, head to our website, profitfirstuk.co uk.
