Restaurant industry recovery helped by CPAs, 2 leaders with long-standing ties
As CPAs and their clients in the restaurant industry navigate one of the toughest economic times in history, two leaders in the respective professions are using their common ground to promote a successful recovery.
Bill Pirolli, CPA/CFF/PFS, CGMA, is chairman of the AICPA board and a partner at DiSanto Priest & Co., which has counted the Rhode Island Hospitality Association among its clients for many years. Brian Casey, a Rhode Island restaurant owner and former chairman of the board of the Rhode Island Hospitality Association, is now chairman of the board of the National Restaurant Association.
The two proud Rhode Island natives see opportunities for CPAs and restaurant customers to work together to overcome the unprecedented challenges the coronavirus pandemic has posed to the hospitality industry.
“I think having a strong relationship with your accountant has been more beneficial than ever before,” Casey said. “There was so much coming out of Washington and the SBA [U.S. Small Business Administration]it was overwhelming at the time.
CPAs have helped restaurant owners navigate the intricacies of Paycheck Protection Program (PPP) funding; provided guidance throughout SBA administration start-ups and shutdowns of the Restaurant Revitalization Fund (RRF); and received valuable strategic advice throughout the pandemic.
Pirolli said CPAs completed 20 years of advisory work in one year. Young people in the CPA profession told him they understand more than ever what the term “trusted advisor” means, as they have consistently helped clients make critical decisions.
“It was overwhelming because all of this happened during filing season, and RRF grant applications were due right in the middle of filing season,” Pirolli said. “So we’re a bit exhausted on our end, but we’re coming out of it now and we’re going to open the curtains, open the windows and help our restaurant friends through the summer.”
A substantial blow
The Oak Hill Tavern on Tower Hill Road in North Kingstown, RI, is a former stagecoach with a rustic atmosphere in a building that has been around for over 200 years and is owned by Casey. The award-winning chicken and ribs are slowly smoked here in a wood-fired oven, and on the weekends there are live performances by local artists.
Casey, who also owns a restaurant business called The Company Picnic Company, had an experience during the pandemic that was shared by many restaurant owners, as his businesses took a hit. He said the first round of PPP funding had been a lifeline, but he later regretted not asking for the full amount available to him because he had underestimated how long the pandemic would affect him. He decided to temporarily close the restaurant in January and February during some of the darkest days of the pandemic.
He took the full amount available in the second round of the PPP, and his CPA advisor, Thomas Grennan, helped him understand and take advantage of the employee retention credit. But Casey’s businesses and others in the restaurant industry continue to struggle with issues such as:
- Higher labor costs and shortage of available employees.
- Dramatic increases in supply costs. Before the pandemic, Casey was paying $1.50 a pound for chicken wings. In June, that price rose to $3.95 per pound.
- State taxes on PPP funds.
A survey by the National Restaurant Association, whose board is chaired by Casey, shows how difficult the pandemic has been for the industry. Based on the association’s survey of 6,000 restaurateurs and 1,000 customers, the survey shows the industry ended 2020 with total sales $240 billion lower than pre-pandemic forecasts. association for the year.
The restaurant and bar sector ended 2020 with nearly 2.5 million jobs below its pre-pandemic level, and as of December 1, 2020, more than 110,000 restaurants and bars have been closed at least temporarily .
Casey fears more restaurants will close permanently once the PPP and other relief funds run out.
“The labor problem in the hospitality industry is appalling,” Casey said. “Most restaurants aren’t opening at full capacity even though they’re allowed to. As an example, we’ve gone from seven days a week to five days a week of service, and out of those five days, we don’t only do lunch on three of them just because of staffing issues.
During weekly meetings with his management team through much of the pandemic, Casey joked that restaurant management was “looking for quarters in the couch,” trying to find savings and strategies wherever they could. .
Casey and Pirolli said restaurant owners can use a number of different strategies that can help them weather the storm, including:
- Review contracts with all vendors, from vendors to garbage collection companies, to find savings opportunities.
- Renegotiate with lenders and other business partners.
- Take advantage of off-peak periods to literally clean the house and carry out the necessary maintenance.
- Implement new technologies, which could potentially save labor costs.
- Reduce the opening hours of establishments.
- Reduce the number of items on the menu.
The Oak Hill Tavern has removed some less profitable items from its menu, which it reprints weekly to adjust its prices to reflect volatility in supply prices.
“I’ve told many people that when we get over this, we’ll be better operators because of this,” Casey said.
Hope for the future
Along with the rest of the hospitality industry, Casey looks forward to a hopefully not-distant end to the pandemic and the return of large numbers of lockdown-weary guests eager to get away from home.
Some of that rebound has already happened, as Casey said that at the start of June, Oak Hill Tavern’s customer volume had reached 85% of its 2019 level, even though it was not only open five days a week. He said grateful loyal customers have been gracious to staff with generous tips.
“Once we reopened, people came out of the floodgates to say, ‘Thank you for reopening. We missed you. Thank you for all you have done for the community,” Casey said.
This kind of goodwill offers hospitality businesses an opportunity to regain their strength after the toughest times. As they do, CPAs will continue to provide the helpful advisory services and technical support that have helped businesses survive.
Meanwhile, two industry leaders with humble roots who have known each other for years will help lead the way at a critical time.
“We’re both local guys and we’re dedicated,” Pirolli told Casey. “Rhode Island has a long history of leadership for many organizations and professions. So I think as a small state, I’m really proud of where we are and what we’re doing in these times. »
— Ken Tysiac ([email protected]) is the Jofaeditorial director of.