As a restaurateur in the 1980s I used to hate Tuesdays. This was the day of the week that would determine our short-term financial future. Every Tuesday that Gerd Jade, a personable, quietly-spoken Austrian (very few people in the British restaurant industry were actually British in those days) who had carved out a nice niche for himself, would spend the day in the small office next to mine.
Gerd, as we all called him, was a management accountant for small restaurants and he would devote one day a week to each restaurant. Tuesdays was reserved for L’Escargot and in those days Gerd did not have to venture far out of Soho for his grateful clients.
He would start early in the morning, in front of a huge pile of paper that contained all the delivery notes, invoices and work sheets for the week – later as we grew in size, the wages were offloaded on to a willing Italian assistant – and by 6 pm the outline of our financial performance over the past week was all too clear.
Gerd would have produced our sales figures: our food costs, our labour costs and, in his very clear analysis in precise and tiny handwriting, he would have produced a set of figures that would leave me either very happy or very sad.
Gerd was a very modest fellow despite his crucial importance to the enterprise, whose value was increased by one other factor. Although he was incredibly discreet, and I never made the mistake of asking him a question that would put his independence in jeopardy, Gerd could see from his other clients whether a rise in one set of costs was a one-off or systemic. In those heady days, Gerd would get upset if our wage costs ever rose above 25% of sales. Today, that proportion is likely to be 30% with the rise in demand for good staff and the rise in the London Living Wage to £9.75 per hour as opposed to £8.45 in the rest of the UK. But if he saw that all his other clients were suffering, he would point this out and relent. A beer at the end of Tuesday invariably brought this weekly session to a conclusion.
Invariably, the growth in restaurants has led to an increase in the number as well as in the sophistication of companies specialising in supplying restaurants with their vital financial information. Possibly the longest-standing such company in the UK is Paperchase Accountancy, founded by the three Patel brothers in Sydenham, Kent. They were the first to harness the computing power, as well as the time difference, of having a team based in India to crunch the numbers.
I first wrote about Aku Patel almost 20 years ago in the FT. In my article, I described how their couriers would collect bags with all the information in them from the restaurants on a Monday morning, process them in India and have the figures back on the right desks by Thursday or Friday at the latest. This approach has allowed Paperchase Accountancy to open offices in New York, Dubai, Hong Kong and Miami while holding on to clients such as The Fat Duck and Chez Bruce in the UK.
Today, as the restaurant-goer faces a plethora of choice, so too does the ambitious, independent restaurateur in terms of companies specialising in restaurant accounts. There are fewer individuals like Gerd, but more independent companies such as CTB Accounts and the relatively newly established Viewpoint Partners.
I hope that in retrospect I would choose to give my business to Viewpoint as they have chosen to specialise in the smaller one-off, independent restaurants rather than the groups or small chains. Also I happen to like their story.
Viewpoint began four years ago when its founder David Grant, a trained management accountant, moved to London and met the irrepressible Jackson Boxer, restaurateur at Brunswick House and the brother of Frank, who runs the well-known pop-up Frank’s Café on top of the Peckham multi-storey car park every summer.
A friendship developed and with it an outlet for David’s skills. He formed Viewpoint Partners and today employs three other accountants round a series of four communal desks, that form one very small part of Makerversity, the community of ‘emergent maker businesses’ (whatever they may be) that is located in the basement of Somerset House and consequently only a few yards from Spring restaurant.
This location is a great asset, according to Hussein Ahmad (pictured above) who alongside Grant fulfils the role of client lead at Viewpoint, as they are physically pretty close to all their major clients. This makes it somewhat easier for the bicycle couriers that arrive every week with the previous week’s papers that help Viewpoint to prepare the basis of every restaurant’s four-weekly turnover. These papers can be supplemented by additional emails with any missing information but the restaurant business, in the UK at least, is far from being fully digitised.
Viewpoint produces figures that focus on the vital headline figures: gross profit on food; on drink; and on the all-important labour costs. Like everyone else in the industry, they aim for a 30% food cost, but they are more than aware of variable factors such as a small, rapidly changing menu, currently very much in vogue, and the vicissitudes of the weather which can make this figure difficult to achieve.
Yet while these calculations provide Viewpoint’s bread-and-butter income, it appears that it is the broader aspect, the experience that they have garnered, which provides an extra angle for their clients. As big a change in the technology that differentiates my era as a restaurateur from today’s, is the general enthusiasm for the business that seems to thrive everywhere. Hussein, son of a Pakistani accountant and an Irish mother whose 6’ 7” frame makes him almost too tall for the low ceilings under Somerset House, could not hide his enthusiasm for the hospitality business and the friends he has made in it.
And there is the differentiating line. Individual and distinctive characters such as Gerd, David at Viewpoint, Lauren Kaswell at CTB Accounts, and the Patel brothers go an awful long way to facilitating their clients’ profit and loss accounts and formulating their management accounts. But it is the restaurateurs themselves who take the financial risks.