Owning a restaurant looks like a lot of glitz and glam, but it takes a lot of financial know-how to get to that point. Many first-time restaurant owners consider one or two financial hurdles, but there are many different types of finances to take into consideration. Budgeting for a restaurant is tough, but there are little tips and tricks to help keep your restaurant finances in order. First consider the different types of payments you will need to include in your budget, and then consider some of the ways you can keep those costs down:
What to Include in Your Restaurant Budget
- Loans – Getting that initial financing isn’t necessary part of the budget; it sets the budget. However, many first-time restaurant owners forget that they will need to pay the bank back for this loan eventually. Therefore, your loan and the interest you are going to pay should be included in your budget. The best way to keep your finances in order when it comes to loans: pay it off as soon as possible. Consider viewing a loan calculator to determine how long you can realistically pay off your loan.
- Day-to-Day Finances – This includes stocking food and supplies for your restaurant as well as any heating/cooling, electric, and water needs. Although “day to day” sounds fairly minimal, this is a huge cost to factor into restaurant management. This is where bookkeeping and POS systems become extremely important. You should absolutely buy a POS system to keep track of your sales if you are a large restaurant. If your sales get out of control, your restaurant is sure to collapse. Consider hiring someone to help you keep these day-to-day finances in order.
- Marketing Costs – Marketing for your restaurant will likely change each month. You will probably want to give out some sort of deal or coupon to bring in customers, and this is something you should budget for when considering your finances. Marketing is a key part of a business, so it’s important not to skimp in this area. You want your restaurant to get good publicity, but it doesn’t always have to be expensive. Consider sponsoring and attending local events, using QR Codes, and utilizing local search marketing.
- Staff – Your staff is going to be a big expense when opening a restaurant. You have to budget for training materials as well as salaries and benefits for each employee. You can help keep these expenses down by creating an airtight training manual. This will help your employees learn faster and make fewer mistakes when they begin working. Also consider hiring younger employees with less experience.
As with any business, there are of course other finances that an owner should include in a budget including surprise expenses (if one of your ovens breaks, you’re going to need a “surprise expense” budget set aside). However, these are the largest financial aspects of owning a restaurant, so it’s important these are budgeted properly. Although it may seem like a lot of money initially, once your business is up and running I think you will find that managing your finances is well worth it in the long run. For more information about restaurant finances specifically, visit Restaurant Finance Monitor.
Abbey Lane is a writer for CreditCardHelp.com.au where she gives financial advice to small businesses and entrepreneurs. Learn about earning frequent flyer points and other restaurant perks by visiting the website. Good luck!
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February 14th, 2012 | 
