Top 6 Financial Management Tips for Restaurant Owners
14th November 2018
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You are probably aware that running a restaurant selling Uzbek cuisine to the public can be a daunting task. You need to provide high-quality customer services and still keep the costs at reasonable levels. Only then can expect to break-even within a few months of opening your establishment. However, this can be a tall order. Industry experts say only half of these businesses can avoid bankruptcy within the first 2 years. This is because their entrepreneurs are prudent when it comes to managing their organization’s finances. They adopt strategies which help them to overcome common cash flow problems while carrying out their activities. This is something you should be doing. This is the only way you are going to make your fortune in this field.

Why do most restaurant owners go out of business?

Such industry professionals point out that most restaurant owners make a fundamental mistake. They focus too much of their attention on accumulating enough funds to open their establishment. In the process, the importance of working capital seems to slip their minds. This is the reason why they fail to break even within the first months. They don’t have the money to cover their essential operating costs.As a result of this, such entrepreneurs fall into a cash crunch. Before they know it, they are out of business because they can’t maintain the quality of their services. This is not the situation you want to find yourself in when you open your restaurant. Your objective is to ensure your customers keep coming back for more. Only then can you expect an increase in profits.

How can such entrepreneurs run their businesses successfully?

These specialists clarify there is no reason why you can’t be successful in running your restaurant. Like any other business, you need to pay special attention to the establishments finances.This is the reason why you need to keep in mind the following 6 important financial tips:

       1. Prepare a comprehensive budget

This is the most important task you need to carry out before establishing your business. You need to know how much money you need to cover your fixed and operating costs. It acts as a catalyst in helping you monitor all cash inflows and outflows of your business. You are then in a position to make necessary changes in need arises. This is an essential fact which you can’t afford to overlook. After all, your priority should be to provide high-quality services and generating enough revenue.

      2. Maintain a proper statement of cash inflows and expenses

The cash flow statement is a mirror of how successful you are in carrying out your activities. This important financial statement tells you quantum of funds you need to keep in your cash register. You then get to know how much money you are earning and current operating costs. This gives you an idea of present financial position. You also become aware of the amount you may require for any future expansion. Moreover, you may be overspendingin certain areas. This document can help you to identify them and curtail such expenses. It ensures you don’t fall into a cash crunch. You are also able to make better decisions regarding your organization’s finances.

      3. Monitor and regulate operating expenses

Experts explain most restaurant proprietors try to monitor their operating expenses from multiple sources. They attempt to track how much it costs to run their business from two vital financial documents. These entrepreneurs examine both their bank passbook and statement of cash flow at the sametime.You shouldn’t do this if you intend to be successful in operating your Uzbek restaurant. They clarify it only results in confusion and costly decision errors. Only The final figure in both these documents need to tally.

      4. Take a close look at payroll costs

You need to hire reliable employees to operate your restaurant successfully. However, you need to remember the saying ‘too many cooks spoil the broth.' You need to determine how many people you need. Excess staff members can be a burden for you. Your labor costs can become unmanageable in the long-run. Moreover, managing and delegating the tasks of so many individuals is a tall order. The trend can ruin your business. You'll compromise the quality of service you provide to your customers. This is a situation which you don’t want to fall in at any costs.

      5. Monitor cost of ingredients you use in preparing popular dishes

The cost of ingredients you use to preparing dishes your customers likecan be substantial. Such expenses make up almost 35% of your total operating costs. The last thing you want is to incurunavoidable wastage of such items. It can increase your food costs unnecessarily. In such circumstances, you have to hike your prices. However, you can avoid all this through proper inventory management. This is an essential part of the cost control policy you adopt. It helps to keep your expenses in check in the long-run.

      6. Maintain accounting records on a daily basis

You need to make it a habit of going through and maintaining your business’ accounts daily. This can give you an idea of how successful you are in managing your organization's finances. The figures for the sales you make throughout the daily need to be impressive. Only then can youmeet your operating costs. You’ll also notice a certain pattern emerging from the data. This can help you in your decision-making process. You can even find yourself in a position where you can introduce new cuisines. Such a step can boost sales. This will certainly have a positive effect on your bottom-line profits.

Industry experts admit no restaurant owner can master managing his/her business’ finances overnight. Sucha proprietor normally learns through trial and error.It is an essential skill which evolves. You'll find yourself in a similar situation when it comes to running your establishment.However, you need to consider and implement the above 6 important tips. They can enable you to operate your organization successfully and profitably. You won't find yourself having to file for bankruptcy. This is something which you certainly want for your business in the long-run.

About the Author

Mandy Bular

Member since: 30th January 2018

Mandy Bular is a freelance content writer. She has written many good and informative articles on different categories such as technology, health, fashion, education, career, travel etc. She is a featured...

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