For Insurance Providers: Why Your Client Needs a Business Valuation

Why Your Client Needs a Business Valuation
 
As an insurance provider, your clients look to you to provide them the peace of mind in case of a financial or health emergency. For business clients, not only do you need to watch out for the individuals in the company but also the future of the organization as a whole. Whether the company is just starting up or whether it is ready for a change in ownership, knowing the value of the business at any given time plays a key role in its protection.
Valuations, Buy-Sell Agreements, & Insurance
 
Buy-Sell Agreements and life insurance very often join forces when that unfortunate moment does arrive. For instance, if a company majority shareholder unexpectedly passes away from a terminal illness, the minority partners would be able to acquire the majority owner’s share by having a buy-sell agreement in place beforehand. Because this is a case of the death of the owner, life insurance can be used to fund necessary purchases that must be made as a consequence. At a time when the economy is not at its best, these funds can cover capital requirements when the markets are down, supplemental retirement income, and even to buy out a retiring partner should death or disability not occur. A consistently updated business valuation will maintain a buy-sell agreement current in the case shareholders need to give up their shares or exit the company.

Restaurant Edition: How to Balance Supply and Demand

Balancing Cash and Inventory

Is your restaurant a full house every night but at the end of the month you’re still low on cash? Is your kitchen pantry stocked up with food that is never cooked? There can be countless reasons as to why your sales are not exceeding your expenses. On the bright side, there are simple tweaks that you can make a part of your daily/weekly/monthly routine to solve these issues. Here are a few ideas:

Food Portions: If customers are asking for more sides or toppings, these items must be an extra cost, no freebies

Drink Portions: It is one thing to have free soda refills but if it is alcohol, make sure the bartender is not over pouring and that drinks are properly mixed

Hungry Employees: In the case that items disappear from your inventory, do a count at the end of the day, as there may be a possibility that your employees are getting the munchies

Wasted Food: Are your waiters taking down orders correctly? Check your POS system as to how many Server or Kitchen Errors there are regularly

Time Management: During a busy night, is the chef taking so long to serve that free food has to be offered? Pre-slice vegetables and fruit and label all containers for easy and quick access

Why Accounting Is Important

While your POS system and bank balance show you where the numbers are, they do not reflect scheduled payments to vendors for the next month or late customer payments for packaged products. It is important to implement an organized accounting system where you can keep track of recurring expenses, profit and loss, cash flow forecasts, and more. You should be in contact with your accountant on a regular basis to make sure your margins are balanced, you are meeting state requirements, and you are making your sales tax deadlines.

As the owner or manager, it is better to be doing what you are good at and leave the numbers to the experts. Don’t wait until you have hit a plateau or you are suddenly $300,000 in debt. It will cost you more when you are under water after procrastinating your bookkeeping than working with an accountant who will be keeping a watch out for you. Let them take the weight off your shoulders and follow their advice – after all that is what you’re paying them for.