4 Tips for Managing Restaurant Finances
Posted: Feb. 05, 2019
Knowing how to manage cash flow increases your restaurant's chances for success.
It’s a well-known fact that restaurants struggle to survive the first three years (although it’s worth noting that the famous statistic stating 90% of restaurants fail their first year was ). Foodservice operators that do remain open credit one part of their longevity to proper restaurant finances management.
With the right tools and practices, protecting the financial well-being of your restaurant or bar is simple. Setting budgets, checking daily business reviews, and establishing cost-saving strategies are points all profitable restaurants consider.
Whether you just opened your first restaurant or you’re an industry veteran, managing your restaurant’s finances is vital. Check out these money-managing tips below.
The Value of a Restaurant Daily Business Review
A daily business review keeps your team and you on top of all the moving parts. It’s one of the most effective systems a restaurant can put into place, and they’re easy to generate with a . Year after year, you can analyze and compare the daily business review to build your history and know what to anticipate.
The details of a daily business review help to analyze:
- Sales trends
- Payroll costs
- Customer counts
- Future sales predictions
- Inventory counts
For instance, the numbers from previous Super Bowl Sundays show how much food to order that week. In most cases, it’s a quiet Sunday and less food is needed than average—knowing how little you need saves money.
Throughout the year as you plan promotions, staffing needs, and specials menu items, use the daily business review to look for trends that will help you.
Lavu Pro Tip: If you recently opened a restaurant, the first year’s review is going to inform your decisions in the future, so carve out time every day to check the report.
Get Control of the Cash Flow
How much cash comes in versus how much goes out?
One of the take is not knowing the answer to this question. To make the right business decisions, every owner and manager must know the amount of cash coming in versus cash going out on a daily, weekly, and monthly basis.
Knowing how much money you have coming in gives you control over critical responsibilities like budgeting for overhead costs (such as rent, utilities, and food).
When necessary, you can put restrictions in place. For example, when you anticipate a slow week ahead, you won't purchase expensive ingredients for food specials. Instead, you can opt for a cheaper alternative, and allocate the money to overhead costs or a special event.
Lavu Pro Tip: When buying food from a supplier, avoid relying on credit for more than a week. This will stop you from overspending and going into the red. Plus, you might find that paying up front will get you a discount.
Schedule Your Team According to Business
With your daily business review, in time you will know how much staff to schedule. The alternative is to risk overpaying and having unhappy staff, and you run the risk of losing control of payroll.
There are two huge problems with overstaffing:
- You pay more than necessary.
- Servers earn less money in tips.
If overstaffing happens regularly, business is bound to suffer. Find the sweet spot between having enough staff to give great customer service, but without having too many people on duty.
Overtime can also be expensive. To avoid unexpected overtime, make it a policy that staff must confirm shift changes with a manager beforehand.
Make Cost-Saving Changes All the Time
As owner or manager, your duty will always be to find new ways to save money. Here are a few ideas to get you started:
- Invest in energy-saving appliances
- Switch to energy-efficient lighting
- Install low-flow faucets and low-flush toilets
With these tips, get control of your restaurant’s finances and make smart decisions.
Fact: A helps you save money.
Posted: Feb. 05, 2019 | Written By: Emma Alois
Schedule a demo with LAVU
It’s a fact: The quality of your restaurant’s POS system can mean the difference between profit and loss. Having the right POS solutions positively affects the functionality of every aspect of your business. From maintaining optimum customer care standards, to your ability to manage your inventory, effective POS can help your restaurant succeed beyond your wildest expectations.