It was 11am in Vinalon’s Eatery, which is located at the market of Jagna, and it was already so crowded and full of people. Sitting and having my lunch here, I was talking with a group of college students. They all came here to enjoy their lunch. Over the 44 dishes served, each of them picked one or two and shared with others. The food tastes so-so but it is cheap. In total, it only cost about 20-30 peso for each student. From 10am to 1pm, the eatery makes most of its sales. Workers and students nearby love to have their meal here, some of them come because they are friends of the owner, Ficisema. While others come because it doesn’t cost them plenty to have a meal outside.
The Dishes Served in the Eatery
It doesn’t like the typical restaurants that you find in Hong Kong. Everyone comes and opens the lids to take a look at the food. You may ask why don’t they just take a look at the menu and order on their seats? Well, there is no such thing called ‘menu’ and even it has, the food shown on the menu may not be always available as it depends on the availability of the ingredients in the market. Similar operations also happen in Hong Kong. However, fewer dishes are served and they only do the takeaway service. The price they charged is the same no matter what food they serve to the customers. It is very different from the eatery. To me, it is still a mystery that every worker seems to be able to do the multiple summations with the dishes despite the complicated pricing.
In a microbusiness, I guess no one would expect any bookkeeping practices appear. I used to think in that way as well. But surprisingly, Vince, who is Ficisema’s son helps with the operation of the eatery, showed us his revenue and expense book of the eatery soon after we met him. I was so much surprised that Vince was trying to build up an accounting practice for the eatery to facilitate his management. His method is pretty simple, though it is not accurate enough and has much room for improvement, that he can rely on it to have a rough idea of the expenses spent and profit earned.
Vince’s Revenue and Expense Book
Sharu, who is my partner, and I quickly thought of the ways to improve the current accounting practice. We recommended Vince to keep a book of the cash flow so as to record the cash inflow from the sales as well as the cash outflow from the expenses. The reason why we recommended a cash flow instead of his original one is simply because we want Vince to not only know about the daily sales and expenses but also how much cash is available in the eatery. After we talked with Vince, we even modified the cash flow book a little bit to facilitate the calculation of daily profit by taking into consideration of monthly expenses, like rent and utilities. In order to accurately record expenses, we also gave Vince three more small books, so he could give them to his workers and keep a record of different types of expenses. Vince is very open minded. After we talked with him about the improvements, he was so receptive and he quickly implemented them the next day.
Implementation of the New Practice Suggested
Working with a microbusiness is not easy. The eatery I worked is not very well constructed. It does not have a proper accounting system, an appealing advertising strategy, and product differentiation. But the process of finding the problems and solving them is fun. Do consulting relies a lot on the two-way conversation. After we came up with our recommendations, we talked to Vince to see if he fully understood, we even made some modifications together and we also talked about the foreseeing difficulties that he might encounter.
Conversation with Vince
Through chatting with Vince, I could see that he really loves doing business and he loves to learn everything that could truly improve the operation and management. Maybe Vince is a typical example of businessmen in developing countries, like Philippines. They are so passionate about their business and enthusiastic to improve their business practices, but somehow, they are just not educated enough to implement a better practice or any kinds of improvements. And most of the time, they can recognize the problems but they just cannot figure out a single solution or even they have, the solutions may not work. Therefore, businesses in developing countries are always in micro or small scales and when they expand, they always encounter limitations and difficulties. Of course, we can always come to help but it is not sustainable in the long run. Education is always the best way but it needs to be well-planned so as to qualify the professionals in the developing countries.