Whether you own an upscale bistro or serve your city from a food truck, a restaurant requires a solid financial foundation.
Financial health starts long before the first meal is served and requires continued diligence through the years.
Use this checklist to make sure that you’re hitting all the important points when it comes to restaurant finance.
Knowing how much you spend each month on necessary items sets the tone for the rest of your financial calculators. Write down how much you will spend on:
• Building or vehicle costs
• Equipment and electronics
• Furniture and decor replacements
• Permits, licensing and insurance
• Employee salaries
With a set recurring cost number in your mind you can calculate how much you need to make each month to break even – or hopefully make a profit.
You’re likely going to need at least one loan during the lifetime of your restaurant.
Lending institutions offer different loan types to cover various categories of expenses. Before taking on any kind of debt, determine what’s best for you and what level of monthly payment you can handle.
For example, for unexpected expenses you might want to get pre-approved for a business line of credit which you can draw against only as needed. However, if you want to start a renovation project it would be better to take out a working capital loan.
Know what you’ll need to earn each month to meet payment requirements without going under.
Figure out how much inventory you need to keep on hand, and order only that amount unless you can get a bulk discount.
Put a tracking program in place to monitor orders, sales and food waste.
Do a daily inventory check, noting items that move quickly and those that languish in the refrigerator. Base future order purchases on these sales trends to minimize loss.
Marketing includes any signs, advertisements, coupons, online marketing and special event announcements that you use to promote your business.
Menu design is also part of the equation, so be sure to budget for a style that draws attention without being overwhelming.
Streamline your marketing costs by utilizing free and low-cost online channels, engaging your customers and leveraging the power of social sharing.
To support ongoing financial health, return to this list and go through it on a regular basis. Always be checking and evaluating your business plan and the way that you approach the management of your restaurant.
Staying on top of the daily financial needs of the business promotes profitability and prevents unwelcome surprises that could leave you without the cash you need to carry your dream into the future.
Contact us today if you are interested in obtaining a business line of credit or working capital loan!