Opening and running a restaurant is a dream for many entrepreneurs, yet it is one of the most difficult business ventures to keep afloat for the long haul. Once you are up and running, you need to know how to manage your expenses carefully to ensure that you can keep the lights on.
First, you need to have a comprehensive business plan in order to secure bank financing for your start-up. Then you need to proceed to spend every penny carefully. Should you lease or buy equipment? Perhaps you could purchase used equipment and furniture from a wholesaler or auction house? Used items that are in good shape will help you keep your initial expenses down.
You will want to invest some money in a good POS system to help you manage day-to-day expenses and keep track of inventory and sales. Bookkeeping mistakes can cost you greatly, so it is best to put a good expense and inventory tracking system in place right from the start.
Advertising and promotion are vital to your restaurant’s success, but you are not likely to have funds in the budget for a big advertising splash. Find innovative, cost-conscious ways to promote your restaurant.
You must also purchase restaurant insurance. Restaurant owners typically have the following types of business insurance, depending on their needs:
If you have trouble keeping expenses in line, you might have to cut back on some ordering or even payroll. You might be able to order food and supplies on credit, rather than laying out the cash up front. Just be careful not to make huge mistakes like running up too much credit debt or failing to pay your taxes on time. Your best bet is to be frugal and watch every penny, so you don’t get behind or in trouble and have to close your doors.
Do you have questions about restaurant insurance or managing your restaurant expenses?