Why expert advice needs to be part of the start-up recipe

my-best-mistake-mangan-thumbYou can’t start a business without a vision, but you can start a business without seeking professional advice, however risky that might be.

This was the situation celebrity chef Luke Mangan found himself in when he first started out.

Mangan owns and operates restaurants in Sydney, Surfer’s Paradise, Singapore and Tokyo, with another restaurant set to open in Jakarta in July.

His restaurants are also onboard three PO cruise liners, and he is the consulting chef for Virgin Australia. But his achievements don’t stop there.

Mangan has received requests to cook for former US President Bill Clinton, Richard Branson, Tom Cruise, and at the wedding of Danish Crown Prince Frederik and Princess Mary.

In addition to regularly donating his culinary skills for charity, he is the co-founder of Appetite for Excellence, which recognises young Australian chefs, waiters and restaurateurs.

While his industry prowess is next to none, he initially neglected the more mundane aspects of being in business, until it began to affect cashflow.

“I didn’t get advice much from my accountant… I thought I was doing fine [because] when I opened my first restaurant, it was really successful,” Mangan says.

“I opened one restaurant and in that first year we did about $5 million, so I opened a second and a third… but I didn’t seek that much money advice. I wish I had.”

“There are a lot of things I didn’t understand. You can have great turnover but not a great profit. There are things I should have done – sought advice on tax strategies and things like that.”

One situation that stands out in Mangan’s mind is when the GST was introduced in 2000. Having only been in business for a short time, he decided not to add GST to the price of every dish.

“It was one thing I thought I’d be smart at doing, but it clearly backfired. I didn’t set up a separate GST account for money I didn’t touch,” he says.

“Cashflow would get tight and then I’d start using the GST money. When GST time came, I didn’t have the money to pay the bills.”

After about a year-and-a-half, he says it became clear that something needed to change if he was serious about building a network of restaurants.

“I always had an accountant there checking things off, but I never used him to my full advantage,” he says.

“[Once I did,] I started to see a better profit. My cashflow wasn’t under as much pressure because of a different [approach to] management of payments and things like that.”

Mangan’s restaurants now employ around 600 staff in total, and the group is looking to turn over about $30 million in revenue this year.

In addition to writing four cookbooks and an autobiography, he has launched a range of gourmet products and also makes regular appearances on a number of TV shows.

Aside from getting good advice from an accountant, his advice to other entrepreneurs is simple.

“Go with your gut and be prepared to work bloody hard,” he says.

“Lead by example. You can’t expect the staff working within your team to do things that you’re not willing to do yourself, especially as a chef.”

“They’ve got to see you sweeping the floor and washing the dishes as well, especially in the early days.”

Article source: http://www.startupsmart.com.au/my-best-mistake/why-expert-advice-needs-to-be-part-of-the-start-up-recipe.html By: StartUpSmart presented by RetailStartupInABox

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