Fonda - Summary Accounting for Managers PDF

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Fonda Case Study Notes...

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Fonda: Introduction: He was exposed to a “fresh new age interpretation of Mexican cuisine” Business Structure: Combination of trusts and companies; shareholding by Tim and his business partners are held within their own private discretionary family trusts, the shares in the parent company, the parent company owns the rest of the corporate structure Each restaurant is its own proprietary limited company in its own right There is a separate proprietary limited company in charge of the payroll. Its one parent company owned by family trusts, and that parent company owns all the share in the rest of the companies that make the group up. Business Planning: Most important aspect of the business plans were the cash flow projections, e.g. how much the set up costs were, the amount of turnover and the costs for running the business. This was done through research, the costs were calculated as a percentage of the turnover Ensuring that the business was selling a product that customers want, this was through getting feedback and focus group, product testing Business planning is about de-risking the venture to reduce uncertainties Misjudgment in projections as they received more revenue than expected but this also meant higher costs. This affected the level of infrastructure, systems and processes required to operate the business successfully, the business is a bigger business then what they initially thought it would be. Non financial performance indicators: Positive correlation between non financial and financial performance indicators Secret Shopper, staff surveys, food safety Getting the non financial performance indicators right the financial performance follows

Performance against budget: Performance measurement through sales tracks how the leadership teams are managing the labour costs and costs of goods A profit share system: which involves getting ownership and buy ins from the leadership teams at each restaurant. Each leader gets a base salary plus a percentage of profit for that restaurant each month. This has resulted in management engaging in the financial performance of the business and ensuring everything is to a high standard. Having a quantifiable measurement means there’s a high level of accountability and a effective way of determining how each restaurant is performing. Managers are making more than they were before the profit share system was introduced Staff drive the budgeting CVP: A lot of focus initially on breaking even They had a best and worst case and realistic scenario for their cash flow projection Understanding that break even is possible and can be managble can help give confidence to run the business. It gives a guidance of how much to invest in the business. Access to capital and where you feel the break even point determining at what point you decide to enter the market Starting small means the break even point was obtainable...