FobeSoft solves the dilemma of tracking expenses, revenue, and profits in real time.
Restaurateurs, owners, chefs, and management need to know how much money is being made, including revenue, labor, and expenses that translate into profit. FobeSoft (Food and Beverage Software) has solved that problem.
“After spending years in the hospitality industry, mainly restaurants ranging from fine dining to fast-casual, the realization that this industry is a rearview mirror business set in,” says Founder and President Geordy Murphy. “Restaurants will operate for a month, and if they are on top of it, they might get their P&L by the second week of the following month.”
Show Me The Money!
The problem is that most restaurants will not know if they made a profit and how much until the following month, even if they have an accountant or use QuickBooks. FobeSoft users see where they stand every day.
“If there are issues with labor, food costs, controllable and non-controllable expenses, those issues are compounded into the next month. What we have done with FobeSoft is to give a restaurant a full Profit & Loss statement, running month-to-date every single day of the month.” For example, suppose someone has purchased an excess of liquor, wine, linen, or restaurant supplies. In that case, the operator will know that day, and it can be fixed promptly because the numbers the manager is looking at are being compared to their budget.
One of the most important tools is the budget since, without a budget, owners, operators, and managers have no way of knowing where they stand financially and how much can be spent in each category. Even a very basic budget is required to reach the goal of a profitable business. The team of FobeSoft professionals is dedicated to the success of all users’ restaurants. Users can send numbers (P&L or spreadsheets) from any period, or the restaurateur can answer a few basic questions, and the FobeSoft team will write a customized budget.
The biggest difference between successful restaurants (big and small) is having a budget (a plan), but this can be an intimidating idea for the chef, owner, or manager. FobeSoft completely simplifies the idea of writing a budget, and the team at FobeSoft actually does all the work for the restaurant. The next step is a quick budget review with the owner/operator and the team at FobeSoft to review opportunities and get buy-in on the plan.
“I find that many owners and operators have not created a budget since they raised the money to open the restaurant,” says Murphy. “This budget might work at the beginning, but typically, in the industry, no one updates their budget, or worse, doesn’t have one. It is proven that if you operate with a budget, you will be 20 to 40 percent more profitable.”
Many restaurant managers were promoted from within the business. Boots on the ground chefs and restaurant managers are the ones making the decisions on what to spend on things like food, supplies, and people. It is so important for them to understand how the decisions they make every day affect the bottom line profit.
Restaurant managers do not need to be a bookkeeper or accountant to use FobeSoft. Just five minutes a day will give users a crystal-clear picture of what is going on financially in the restaurant. Simple enough that chefs and managers will easily understand but also robust enough that the CFO will appreciate. FobeSoft turns restaurant chefs and managers into restaurant operators!
“Most owners and operators will hand the keys to a business doing more than $2 to $3 million to a new chef or manager who might have received on-the-job training instead of formal education. This chef/manager is now operating a $3 million restaurant but has never been taught restaurant accounting,” says Murphy.
The system is not complicated, and it is easy for all users, even those with little experience using computers, spreadsheets, and accounting software. FobeSoft’s easy-to-use computer-based accounting system is available on all devices from your phone, tablet, laptop, or desktop and was designed for ease of use with assistance from FobeSoft’s staff.
Restaurateurs, owners, or managers can review this information and choices affecting their day-to-day operations. It only takes five minutes per day with three simple entries. Sales, labor for front-of-the-house and back-of-the-house (salaries, taxes, and workers comp are already in the backend and populate the cell every day), and what invoices were received that day. Entering this information will help guide in making decisions that will positively impact the bottom line. The result will be adding more profit to the bottom line.
Paying attention to the daily Profit & Loss statement (P&L) is the key to success with FobeSoft. The team at FobeSoft guides in creating a custom budget, navigating the system, and then helping spot trends in your business. FobeSoft will also help analyze progress so users can decide how they are doing and increase their profit.
“We have numerous clients that call us, The Team, monthly to discuss how to become more profitable. We are like the KPMG for restaurants!”
FobeSoft allows the operator to manage the bottom line. “Clients can determine what profit they need to make from looking at the restaurant’s revenue, follow the P&L and budget every day and, at the end of the month, the client will have managed their bottom line.”
However, Murphy emphasizes that “businesses still need an accountant. This professional will produce the financials, file taxes, and other services. We are not trying to replace their bookkeeper or accountant. We are an enhancement to QuickBooks. We offer services such as a daily P&L statement and a budget. We also teach the chefs/ managers how to understand and read a profit and loss statement and how to impact the restaurant’s financial performance. An example I would share is we generated a true labor figure every day, including salaries, workman’s comp, payroll taxes, and unemployment compensation to give a detailed report. Every day a portion of the rent and cam charge populated the cell. Accountants can only generate a P&L after the bills for the utilities are received. Every operator knows what their utilities are, being so, Fobesoft factors a portion of the utilities into the daily P&L. Fobesoft generates daily P&L compared to their budget running month-to-day.” Every day!
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As for financial software, “we are a conduit and enhance software such as QuickBooks. What FobeSoft does is we can go from the point of sale system to FobeSoft and push the information to QuickBooks. One of the reasons to use Fobesoft is that most of the off-the-shelf accounting software does not figure out the cost of goods for a restaurant the way it is supposed to be configured. They determine the cost of goods as a manufacturing plant or a retailer would; everything is divided by the total sales figure, which is not the true cost of goods for a restaurant. The food costs are divided by food sales, wine costs are divided by, and liquor costs are divided by liquor sales. The total cost of goods is divided by total sales.”
Murphy is a serial entrepreneur and partner in Long Life Noodle Company, which operated six restaurants in the San Francisco bay area. He wanted to know how the restaurants were performing every day, so he used the first version of this product to get daily intel. Murphy sold the company, moved to Florida, and started another company, Cypress Hospitality Group, one of the premier headhunters in the hospitality industry still operating today! But friends opening a restaurant would call him about developing a budget for them and reviewing their P&L.
“I was listening to the audio version of Steve Job’s book, which stated that if you can identify and solve a problem, you have an opportunity,” he says.
He partnered with a program, Rajkumar Chidambaram, one of the co-founders, equity partner, and CTO, to develop FobeSoft and teach management best practices in operating a restaurant.
“By using FobeSoft, we will increase a restaurant’s profit from 20 to 40 percent,” states Murphy.
If the restaurant is currently making a profit of 10 percent, using FobeSoft will bring profits up to 14 percent. FobeSoft will find one full percentage point of profit in the cost of goods and one full point of profit in labor cost, either back- or front-of-house. Every restaurant we work with has at LEAST one full point of profit in their controllable expenses, including linen, laundry, glasses, silverware, and kitchen supplies. They will analyze non-controllables such as advertising, credit card fees, and other costs to find more profit. The FobeSoft program also offers theoretical cost analysis. Looking at food costs, the client can determine how much of each food item is sold, what are the highest cost food items, and if one food item is selling really well, the operator can see what raising prices for that one item by 25 to 50 cents, and the restaurant will do to the bottom line. These figures can then be entered into the FobeSoft program, which will show the figures theoretically how food cost has dropped. You don’t have to just increase the price of every item to lower the food cost.
It is all about best practices in the restaurant industry, and FobeSoft has created the tool to lower costs and increase profits. For more info, visit fobesoft.com. Follow on Facebook @ FoodBevSoftware, Twitter @ fobesoft, and LinkedIn @ fobesoft.
