Planning Your Restaurant Budget: Tips and Tricks
Running a restaurant can be challenging to say the least. Especially if you have just started out and are struggling to get the complicated restaurant financing right. With unexpected costs arising time and again with frequent dips in revenue, reaching a balance and breakeven point can be frustrating. However, there are a few ways in which you can turn the tables around and plan a sustainable and appropriate budget. How do you go about doing this? Well, you need not worry. Sit back and keep reading to find out how planning your restaurant budget is really done. After this, you’re sure to find it much easier to plan your restaurant budget.
Restaurant Budget 101
But first, what is a restaurant budget and why is it important? Unlike sales forecasts for the month, which gives you a projection of the revenue, a restaurant budget management system essentially is a financial limit you have set in place. Once set, you work your expenses around the map that you have charted out. It ensures your restaurant is operating in a sustainable manner.
Running a restaurant without a budget in place is like walking with your eyes shut. You’re aware of where you want to go, but without being able to see the challenges and hurdles ahead, you’re probably going to end up slipping and falling over a rock before reaching your destination. This is something you definitely don’t want for yourself or your restaurant business. It can lead to massive financial problems later on.
Here are a few tips and tricks you can start on today to avoid stumbling and ensuring a healthy outlook on your restaurant financing.
Get Out the Costs – Note Them All Down!
This is the first step you want to focus on before forecasting or factoring in any revenue prospects. Be it your inventory costs, employee salaries, utility bills, administration costs, or insurance. Make a comprehensive list of all potential as well as standard costs for the month.
In addition, it’s important to note that this may vary during different seasons or time periods, and picking up and analyzing this trend may take time. But, it’s vital to keep track of this from before. By doing so, you will be aware and prepared for when the next summer season hits and the costs associated with your utilities such as air-conditioning and ventilation increase.
Don’t Forget the Sales Forecasting
When closing off at the end of the month, it is important for you to predict the sales revenue for the coming months. It doesn’t have to be accurate, an estimate of the projection should be more than enough. Take into account any known changes such as holidays or vacation periods. By doing so you will be able to forecast your revenue stream better and match them with your expenses. Brainstorm all possibilities which may positively contribute towards your sales revenue.
Be Alert and Proactive At All Times
There may also be times when unforeseen circumstances may pop up. Say for instance an unwanted fire outbreak or sewage backup, which may end up shutting your operations down for a while. To prevent major economic loss in such situations, make sure to have your insurance in place. Keep regular checks on drainage, pipes, and inventory storage. Ensure your food items are stored in a cool as well as dry place and has adequate ventilation to avoid food spoilage.
Taking such precautions beforehand can help cut down costs tremendously. However, always keep a margin in place for events that may not be initially accounted for. Anything can go wrong at any time, what matters is how you are able to handle it and how quickly you can bounce back.
Optimize Your Finance Management
You don’t want to compromise on your restaurant's quality and customer experience. Instead, you want to think of smart ways to cut down on costs in a sustainable manner. Be it making use of large glass windows to cut down on lighting costs, or going green by investing in reusable steel straws, the possibilities are endless.
You can even increase your revenue by attracting customers according to the changing tastes and trends. Bring in a menu according to the weather, say for instance a variety of cold and sweet summer drinks on the days which are hot, stuffy and warm and hearty hot chocolate during the rainy season. Mix and match different options and see which works better for your restaurant business in the long run.
Review in the End
Sit down at the end of every month and review your budget and revenue with your management team. Note down their opinions and advice on what can be done to improve efficiency. By doing so you will not only expand your horizons but become more inclusive with your restaurant management and staff. Seeing things from different perspectives can help bring in new ideas, which may be fruitful and rewarding. So, don’t skip out on this important tip going forward.
The Bottom Line
With the right guidance and tricks up your sleeve, your restaurant budget will not only be easy to craft but execute as well. Keep an eye on all financial streams coming in and going out. Take all unforeseen circumstances, which have the possibility of occurring into account and remain proactive. By finding the right mix, you’re sure to get beyond the breakeven point and earn more profits. Just remember to stay focused and do not give up!
To learn more information on how to manage your restaurant successfully and stay up to date with the latest restaurant trends, visit our website. We provide multiple guides via blogs, videos, and even personal consultancy services to make your restaurant maintenance seem effortless.
If you have any further questions, you can even give us a call at +44 (0)203-916-5199 or drop an email at [email protected]. Our team will respond to all your queries in no time!