CASE STUDY: Il Caffè


Fika Culture Meets Financial Success


A Case Study on il Caffè’s Transformation with R&R FMG and Restaurant365

Fika. It‘s the Swedish word for coffee. In Sweden, fika culture holds great significance in the hearts and daily lives of its people. More than just a coffee break, fika is a cherished tradition that transcends the fast-paced nature of modern society, allowing people to prioritize interpersonal relationships and mental well-being.

Cup of coffee from ilcaffè.

When Michael Backlinder immigrated from Sweden to the US, he brought some of that fika culture with him by opening the downtown LA branch of Il Caffé, his successful micro-chain of Stockholm coffee shops.

Having started his restaurateur career while still in high school, he also brought a lifetime of industry experience. Michael began as a dishwasher then eventually rose to become a chef, and by the age of 23 already owned his own restaurant in Greece.

After many years of owning and managing restaurants and coffee shops, Michael knew the front of the house inside and out, but the back of the house was always a bit of a challenge. “I’m a small business, and as you know, you kind of have to have your hands a little bit everywhere, so I’m on the floor a lot in front of customers. I’m trying to be a good example to my crew, who I work with, and kind of doing literally the same tasks they do. But as a small business, I’ve known for a long time it’s best to outsource the things I’m not good at, like balance sheets, payroll, sales tax, and accounting in general.”

In 2016, Michael was outsourcing those tasks to a CPA who lacked restaurant industry expertise. Consequently he had no visibility into II Caffé’s monthly expenses. He was unable to file sales taxes accurately. And no financial reports were being generated, aside from a very limited quarterly P&L statement.

Change was needed, and after asking around, Michael was referred to Restaurant & Retail Financial Management Group (RRFMG) as an accounting services provider specializing in the restaurant industry.

ilcaffè logo.

RRFMG immediately began straightening out the books for II Caffé, establishing financial controls, and instituting 4-wall cash flow analysis. Then, they migrated II Caffé’s accounting information to Restaurant365, the industry standard in restaurant accounting and management software.

Now Michael has 360° visibility into his operational finances. He receives timely, accurate financial statements on a regular monthly basis, no more than 2 weeks after the prior month closes. The statements let him know exactly when to cut back on labor costs if certain thresholds are exceeded, and provide a true picture of profitability.

R365 also lets Michael view how labor costs fluctuated historically on certain dates, for example Memorial Day of the prior year. That in turn lets him plan his labor needs accordingly as those dates approach. This was something he couldn’t even imagine doing before. “The cost of labor has increased a lot over the last year and a half, two years. So that’s the biggest challenge I’m feeling today. The information RRFMG provides me through R365 lets me be much smarter in how I use that labor, and I’m no longer in the dark about my costs.”

Thinking about tax season

RRFMG also helps Michael keep II Caffé in compliance with various regulatory obligations.

“Well, they make sure I’m on the ball. I work very closely with Dave (Client Account Director) who reminds me about things like upcoming license renewals, deadlines for tax filings, and other things that I don’t think about when I’m on the floor working.”

Michael continues to say, “They are hands on, timely, and on point. Thanks to RRFMG I have more confidence in certain things like my balance sheet. The materials they provide monthly help me implement lots of improvements in my business. That’s really crucial in my line of work because margins are small, and maintaining profitability isn’t easy. They’re a great resource for a guy like me, and I think they would be for any new restaurant that needs to get their books on track.”

RRFMG logo.

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