Tag Archives: Money

Effective Management of Restaurant Finances

a cashier at a restaurantMaintaining a successful restaurant business requires ongoing investment, and getting the appropriate lender to partner with you is essential to keep your restaurant in top shape. What most restaurateurs don’t understand is that after opening your doors, you still need to be financially prepared to keep them open.

Over 60% of restaurants close within their first two years of opening because of financial missteps. It is essential to manage your finances efficiently making sure that you have a sufficient ROI. ARF Financial recommends a few tips you can use to manage your restaurant financing efficiently.

Understand Your Cash Flow

The money you earn and the amount you spend make up your cash flow. Proper cash flow is one of the essentials of any successful business venture. You should adequately budget your expenses including loan repayment, mortgage or rent, food orders and payroll. You should monitor your cash flow closely so you are not spending too much on certain things. Don’t take goods from your suppliers for more than ten days on credit. This helps in preventing you from using more cash than you should.

Control Your Payroll

Your restaurant’s payroll is another crucial area that requires vigilance. Ensure you have just enough staff for an outstanding customer service experience. Overstaffing will eat into your profits while understaffing will tire your workers and affect the service they offer your clients.

Reduce Your Running Costs Daily

There are many simple ways you can minimize the daily operating costs in your restaurant business. Consider changing to energy-efficient appliances and low flow taps. Regularly update your menu and keep your inventory low. You can remove items which do not sell to lower your inventory. These small measures will save significant operating costs for your business.

You can also track your food and beverage sales daily using a business review. It will help evaluate your customer counts and sales trends and assist you in planning for future sales. With the right financial management skills, you will reap handsome returns from your business.

Cash Flow Problems? It Could Be Your Employees

Cash FlowCash flow – it is always a business’s sticky situation. Many things can cause it to disappear very quickly. One of these is your employees.

How can employees drain your business financially? Here are two ways.

Employee Theft

Many employees steal. In fact, more than 70 percent of them do it. They are also doing it habitually. In a 2017 survey by the National Retail Federation, the inventory shrink rate went up. About 36 percent of it was due to shoplifting while 30 percent was because of employee theft.

The average cost per employee theft was almost $2,000.

Solution: Implement penalties or punishments against those who steal. Since employees are more likely to steal a lot of money through manipulating the accounting books, businesses should invest in online bookkeeping app or software to establish control, accountability, and automation.

Employee Turnover

Businesses lose employees for a wide variety of reasons. Some of them leave due to better work opportunities. Others you have to terminate because of poor conduct or work ethics. Either way, you are bound to lose money.

In 2012, the Center for American Progress published a paper concerning the high cost of employee turnover, especially for high-skilled work. It can be as much as 213 percent the annual salary for the position. Overall, it can be between 10 and 30 percent.

Meanwhile, a bad hire could cost the business around 30 percent of the employee’s earnings for the first year. The spending usually goes two things: the re-hiring process and retraining. However, a high employee turnover rate can also affect productivity, which also translates to more losses.

Solution: Set up an employee retention program. Constantly measure the turnover rate and, most of all, know the reasons. This way, you have better knowledge on how to manage the problem.

There is no foolproof plan to avoid these two employee-related issues, but you can minimize them from happening. Most of all, you can learn some ways to protect your cash flow as much as possible.

Mortgage Loans Dos and Don’ts: The Home Buyer’s Guide to Getting Approval

man wearing a suit sitting in a table showing a mortgage loan contract and where the signer must signBuying your first home can be horrifying. With all the paperwork, the potential rejections that you will encounter, and the fact that this will probably be the biggest purchase of your life, you would quickly assume that this process isn’t for the faint-hearted.

Suppose you have great credit and no history of bankruptcy on your record, there are a few tricks you can use to boost your odds of getting approval. Here are some dos and don’ts to secure a loan as recommended by American Loans, a top mortgage company in Salt Lake City:

DO save for a down payment early.

Usually, lenders would ask a down payment of 20 percent, but there are also lenders with programs that would go for as low as three percent. However, these programs would equate to higher costs and insurance. Saving up early would help you get the approval and save on extra fees.

DON’T forget to check your credit score.

Your credit will determine the interest rate and your loan terms. Before you begin this process, don’t forget to check your credit. If there are errors that you need to discuss, do it early. In addition, look for opportunities to improve your credit.

DO compare mortgage options.

You will find yourself bombarded with a lot of loan programs, that’s why it is good to do research which ones will be perfect for you. Check if you can afford large monthly payments right now, or if you can afford to do so in the future, this information would determine which program you should be going for.

DO get a preapproval letter.

Getting prequalified would just mean knowing the amount the lender can give you based on the information that you have. It’s smart to get preapproved. It can help you look more credible to sellers and even give you an advantage.

If anything goes downhill, let it be the push for you to work on your credit and finances the next time. Look for the things that you didn’t see the last time. You can find other people you have been rejected multiple times but got a house in the end. All you have to do is to start a plan and work hard for it.