Being a chocolatier: Realities of managing a food-based business
We talk to micro business owner Greg Smith about how he’s adapted to life as co-founder of artisan chocolatier brand Smith’s: L’Art Du Chocolat
Starting a food business is often a labour of love. Typically inspired by a passion for a culinary delight and a desire to share with others, it’s a notoriously competitive space.
But it’s also one that offers an array of outlets locally and nationally to get a kitchen-table business off the ground. For instance it’s relatively easy to get a stall at a village farmers’ markets, there are small tea shops and restaurants always seeking additions to their menus, and the local grocers’ or catering for friends offer viable options to dip a toe in the water.
Cash transactions are likely, which for many make life for the micro-business owner a little tricky. Keeping track of receipts for ingredients and materials, having a float of change, and totting up the money at the end of the day or week can prove a tiresome exercise in admin.
So what’s it really like and what can a small business accountant do to help you keep on top of it all? We spoke to a recently launched artisan chocolatier business run by two brothers and their accountant to find out more.
Smith’s: L’Art Du Chocolat
Founders: Greg Smith and Chris Smith (pictured above)
Company: Smith’s L’Art Du Chocolat
Description: Artisan chocolate
Based in: Saffron Walden
Fondly known as ‘The Chocolate Brothers’ Greg and Chris Smith – a Master Chocolatier – launched in December 2015, trading in the historic market town of Saffron Walden in the build-up to Christmas.
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Local boys, the pair returned to their home town after pursuing successful careers in London, France, and Australia – Chris as a chef at the renowned The Savoy and Mayfair Hotel as well as Michelin-starred Parisian restaurants Regis Douysset at l’escarbille and the Ledoyen before a stint in Australia and Greg as an assistant headteacher at a comprehensive school following an industrial design degree.
“We are so excited and proud to launch our new business where we grew up, our roots, our home town,” says Greg. “Our brand reflects a fusion of two Englishmen ‘Smith’s’ influenced and inspired by French artisans who have a passion for all things chocolate.”
Brother Chris’s experience working for numerous fine chocolate establishments in Paris including being the Head Chocolatier at Osmont and learning from internationally known chocolatier Patrick Roger.
So Greg, what’s your average day like?
We work extremely hard. We start at 6am working to the weekly and monthly action plans created by Chris as to the chocolate products being produced that day. He prepares his stock ingredients and ensures his chocolate is maintained at the appropriate temperature for tempering and then moulding. The precision and planning is absolute to ensure the chocolate taste is excellent and presented beautifully, with chocolate having the shine of a skilled artisan.
I ensure stock levels are where they should be and raise purchase orders with suppliers. In parallel the packaging and labelling of products is prepared prior to packaging the day’s products. We make all our products fresh each week so sales inform our scale of production for the following week in order to meet demand. It’s a difficult balance to ensure there is no wastage or possibility of having to consider storage and shelf life beyond the consumers’ shelf life.
I spend half a day a week updating our admin using our finance package, deal with social media and order requests, replying as quickly as we can. We rarely finish earlier than 12pm while we continually progress and grow our business. We recognise as we plan for the future our hours will become better. At the moment our motto is ‘success is better than rest’.
Who are your main suppliers – what do you need and how do you tend to buy your materials?
Our main suppliers are for our chocolate from some of the best cocoa sources around the world and fresh, locally sourced ingredients wherever possible.
We’ve had to buy moulds and packaging, which we do over a series of months, ordering Easter requirements in January.
We pay all our suppliers immediately via our business banking debit card. We like to keep things simple and pay upfront where the payments can then be processed within our Sage software within the week. This way we keep a close track of our expenditure balanced with our weekly turnover.
How do you keep your records?
We maintain a lever arch file of invoices and purchase orders in date order and update our accounts system as regularly as we can, otherwise at least once a month. The only more time consuming aspect of this at the beginning was in setting up suppliers and their details. Once this was established entries for purchase invoices and sales invoices were much quicker.
What are the pain points that other people wanting to start a food business should know about?
Cashflow is critical and planning the rate of growth is important for your business. Where you make products according to demand, often working more hours, it’s better to prevent staffing costs until the growth is achieved. Creating a high quality product was our most important principle and then making time for everything else to fall into place is secondary.
When do you do your accounting?
We build it up over a month in date order and then spend a day or two each month updating our accounting software and filing our records.
How does using an accountant or bookkeeper help?
Our accountant helps by providing us with advice and being able to offer us telephone support for any queries we have with our accounting or in the use of our accountancy software. It is helpful that they can see in real-time all our information in order to reach solutions quickly. They also process our VAT returns and final year accounts to meet all our legal requirements.
The small accountant’s view
Founder: Paul Donno
Company: 1 Accounts
Description: Cloud-based accountancy firm
Based in: Suffolk
We were approached by Greg Smith and his brother Chris after being recommended from an existing client as they were looking to start a business making hand crafted chocolate. We spoke to them over Skype and went through their business plan.
We looked at the pros and cons of being a Limited Company or Sole Trader and felt that a Limited Company was best for this business because of the protection and that they wanted to plough their profits back into the business at just 20% tax. Also as they progress and find new flavours and ways of doing things they would be eligible for Research & Development Tax Credits, a very useful tax relief for any small business.
We formed the company and registered the business with HMRC for Corporation Tax and VAT. With the changes in interpretation over pre-use of equipment we felt that it was prudent to register for VAT now so that they could claim VAT back on the equipment required to make the product.
We then set them up for our online accounting service so they have an excellent platform to work with and we can monitor their progress.
Start-up businesses need a lot of guidance and the online platform we use lets us monitor the business enabling us to offer advice at a very crucial stage in the businesses lifecycle. We believe it so important for a business to understand its numbers and have access to us as part of our monthly fixed fee agreement, taking away the barrier of every call costing more money.
We helped this business understand allowances on equipment, expenses for travel using mileage rates of 45ppm, the procedure for employing, and VAT, which remains an ongoing process.
This article was produced in association with Sage One. For more business insight and tips to keep on top of cashflow and small business tax visit the Sage business bloghttp://uk.sageone.com/blog/.
For a free trial of Sage One please visit http://uk.sageone.com/products/.