Expanding A Successful Restaurant Through Constant Incremental Improvements



How RRFMG Became An Important Piece Of Bacari’s Growth Puzzle

As every restaurateur knows, starting a new restaurant is a Herculean undertaking. You need to be a jack-of-all-trades capable of everything from conceiving the concept to designing the menu to hiring staff, and of course handling the finances.

Successfully wearing many hats though is no guarantee of survival. According to the National Restaurant Association, 30% of restaurants fail in their first year. Nearly 80% shut down by year five. As for those remaining 20%, they’re the winners worth studying and emulating.

One such success story is Bacari, a Mediterranean & Italian-inspired tapas concept with 7 locations in the Greater Los Angeles area. Launched in 2008 by Daniel Kronfli, his brother Robert Kronfli, and Chef Lior Hillel, Bacari has earned an exalted reputation for its service, its ambiance, and especially its food.

From the start, Daniel oversaw just about every aspect of operations, including managing people, negotiating with vendors, interfacing with customers, and of course dealing with financials.

Despite having no accounting background, Daniel took on the responsibility of doing the restaurant group’s bookkeeping using QuickBooks. Consequently, he repeatedly found himself bogged down with time consuming activities such as inputting payroll, inputting invoices, doing accounts payable, cutting checks, stuffing them into envelopes, and mailing them out. By the time Bacari grew to 4 locations, it often took him a whole day (or longer) to get through these tasks.

In spite of all his efforts, Daniel was doing just enough to track revenue coming in and expenses going out. As a result, he recalls “…balance sheets were out of whack and accruals never existed.”

This state of affairs persisted until 2019, when Daniel attended that year’s Western Foodservice & Hospitality Expo. While at the show, he met Wayne Lipschitz, CEO of Restaurant & Retail Financial Management Group (RRFMG).

Wayne and Daniel discussed Bacari’s accounting challenges, and Wayne proposed that Daniel outsource the accounting work to RRFMG. Doing so would free up Daniel‘s time, enabling him to focus on hitting the aggressive growth targets he’d set for his burgeoning restaurant group. 20 locations by the end of 2028, up from 4 at the time he first met RRFMG.

When Bacari brought in RRFMG at the start of 2020 to take over its accounting responsibilities, the restaurant group had about 175 employees. Daniel states “Now we have 500. You can’t imagine putting in payroll for 500 people one person at a time.”

Incremental financial improvements rippled outwards into the operation and led to improvements elsewhere. For instance, by making tweaks here and there based on RRFMG’s reports, Bacari ended up improving their customers’ experience as well.

That was a crucial outcome for Bacari. One of the biggest issues they worry about is maintaining and continually improving the consistently high quality their customers have grown accustomed to. It’s important to Daniel that growth doesn’t undermine Bacari’s excellence, & RRFMG’s services help support this objective.

Offloading the payroll burden was just one of many benefits Bacari realized by using RRFMG for its accounting needs. Daniel says, “They’re generating reports that we kind of never thought about. For example, cash flow forecasts. Also, we now get weekly reports, whereas before I only generated them monthly myself.

We’re getting weekly labor reports with accruals and stuff like that, which has allowed us to analyze things on a more consistent basis, and that in turn has made us incrementally more efficient. If we’re having a labor issue at one of our locations over a week, it allows us to address it immediately rather than two or three weeks later when we only did monthly reporting.”

Daniel feels RRFMG has been very responsive to Bacari’s requirements, “I think they’re a company that’s good at what they do. They’re very flexible with some of the things that you can ask them. They’re not set in their ways, and work with me to customize some of the things I need.”

Daniel goes on to conclude, “Wayne is a good out-of-the-box thinker, and I like that about him because we’re like that too. So every once in a while I’ll ping him with whatever question or whatever concern we have, whether it’s related to our growth strategy or with what’s going on in our existing business, and I’ll ping him just to see what his ideas are, or what his opinions are. Lots of times it’s led to him introducing us to people he knows in the industry that have helped us. You know, even if it’s just learning something from somebody or just an introduction to somebody, like private equity people or whoever. There’s a lot of that. I think Wayne brings a lot of value, just by what he knows and who he knows.”

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