The restaurant industry has areas that are totally specific to it. Those who want to get into that area, who want to do it right, need to become experts in those areas that really differentiate that industry:
- Most restaurant clients are tax oriented clients; sometimes you will have audits if you have a large restaurant group or franchise with a significant amount of debt level.
- Within the tax realm, one specific area is tip credits, which very few other industries have.
- There are specific rules with respect to depreciation.
- There is special treatment for things we call smallware, like glasses and silverware.
- Specific rules apply when you open a new location. In most businesses you have to amortize startup costs. In the restaurant industry, if you’re opening up new location that is just copy of another location, you don’t have to amortize startup costs.
- Gift cards – there are special treatments for gift cards – you need to know how to treat those for tax purposes.
Accountants can be particularly valuable to their restaurant clients in these areas:
- You can help them benchmark their restaurant by being able to look at national statistics based their category, see how they compare, if they’re not comparing well, you’ve hopefully seen enough that you can probably tell them what they’re doing wrong or right.
- Access to capital – In the restaurant industry, it’s more difficult to borrow than in other Industries because the equipment has a very low resale collateral value. It’s tricky to find loans for restaurants – you’re often dealing with the Small Business Administration.
- I’ve seldom met a restaurateur who didn’t want to open a second location – it’s in their DNA to want to grow and expand. You can help them build a structure that will allow them to expand, create some liability protection, create an environment that make it easy for them to grow the business.
- Be aware of strategies for real estate, how to buy it, this is a big area for restaurant clients.
Gary Shamis
