Tag Archives: Restaurant

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.