Outsource Key Areas to Minimize Risk and Maximize Return

Outsource Key Areas to Minimize Risk and Maximize Return https://wahospitality.org/wp-content/uploads/2018/06/shutterstock_495256738.jpg

By Rick Braa, CHAE

 

Q: As I look at the structure of our company, I realize I don’t have my arms around all of it. What is the best way to get and keep everything under control?

A: Growing a business is complicated. The crucial decision in business is deciding what NOT to do.

There are many moving parts, and no one is an expert in every area. Owners that start restaurants are predominately operators, eight of ten of whom got their start in the industry at the entry level. They’re wonderful at engaging employees and guests and reacting to and fixing issues. As a business grows, the needs of the business will outpace its founder(s). Staying current in all areas simply isn’t practical and it draws away from what makes a business successful, which is great operations.

Entrepreneurs have weaknesses in key areas and need to depend on experts to advise and guide on processes and procedures. If the decision is to hire and staff administrative functions internally, the owner is dependent upon the knowledge and honesty of the people hired. If key people were to quit or not work out, the owner is right back in the same vulnerable spot of hiring for positions that draw away from operations.

 

To stay current and follow best practices, consider outsourcing in the following areas:

Human Resources: In 2018 the job market is the tightest it’s been in over a decade and on track to be the tightest ever. While being tight, the employee base is also the most knowledgeable and litigious of any generation in the past. The complexity of the HR function requires more than one person to keep in compliance with all rules and regulations. Having a full-time HR department can be expensive and living without a team while relying on one affordable person is risky. The needs of every company are different. The larger the company, the larger the team needed and vice versa.

Information Systems: The liability associated with protecting consumer and company data are real. Ransomware is an industry of its own and is the number one threat to business. According to Barkly, a company is hit with ransomeware every 40 seconds and an individual every 10 seconds. This has grown 800 percent year over year. In its 2017 Q3 Threat Report, proofpoint notes that email threats grew 85 percent from the prior quarter as prolific attackers launched massive ransomware campaigns. Threats are accelerating, malicious URLs alone increased 2,200 percent year over year growth. Information systems specialists can help with the right protection to reduce risk from these kinds of attacks.

Legal: As regulation expands, it is essential to have a strong legal team. Source a firm with wide areas of expertise that specializes in hospitality. If you don’t have a need right now, you will sooner or later. Having a team ready is not only important but also wise.

Accounting and Tax: Quality accounting work is rare. Most owners don’t know how a balance sheet works. If prepared incorrectly or left unreconciled, a balance sheet with inaccurate data will manipulate results through the P&L. Unless you have a background in accounting, you’re at the mercy of your bookkeeper or accountant. The idea that your CPA will uncover fraud or clean up inaccurate data is mistaken. That’s not his or her job. Hiring a qualified internal accountant or developing one from within is difficult at best and risky. You can’t teach what you don’t know. An internal accounting department can be costlier, expose the company to risk, reduce the value of your company and trigger regulatory agencies that can slow the company down. For taxes, using a CPA firm to perform planning and filing is a great investment and will keep compliance with the IRS.

Using outsourced providers in key areas saves time, improves efficiency, provides expert resources, reduces technology costs, reduces risk, increases value and provides state-of-the-art systems and tools. Outsourcing allows you to focus on what you do best: operations. Surround yourself with a team of experts, and you’ll see risk minimized and profits soar.

 

For more information on improving profitability and driving sales, contact AMP Services at rbraa@ampservices.com. Rick Braa is the co-founder of AMP Services, an accounting and consulting firm specializing in helping companies grow profitability.

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