In the Philippines, you will see all types of restaurants left and right. In the restaurant industry, it is a well-known fact that more than fifty percent of restaurants close down during their first two years of operation. Nevertheless, many “Pinoy” entrepreneurs try their hand at owning and managing a restaurant. After all, Filipinos love to eat; here is never going to be a shortage of potential customers!
However, running a successful restaurant all boils down on your management style. And one vital factor of restaurant management is the finances. If you’re looking for the best restaurant business tips that will secure your restaurant’s future, read on. Here’s how to manage a restaurant’s finances the right way:
1. Set up a budget
Of course, the first step to managing a restaurant’s finances is to set up a budget. Take note of your fixed costs, overhead costs, and other factors of operation that add to your total expenses. Knowing your budget will avoid confusion and possible loss of money along the way.
2. Maintain cash flow statement
Cash flow is the amount of money coming in and out of your restaurant. Having a cash flow statement will show you the daily activities that contribute to your income generation as well as expenses. More importantly, a cash flow statement will tell you where your restaurant is, financially, and if you are still sticking to the budget.
3. Check and recheck reports daily
As the owner or the manager of your restaurant, it’s best that you make checking and rechecking reports a daily habit. Doing so can give you an idea of where you’re at regarding sales, and can help you determine points of improvement based on the pattern. Moreover, checking your accounts every day can help you cut down on unnecessary expenses, as well as check for theft or pilferage.
4. Manage labor costs
The number one rule to managing labor costs is to avoid overstaffing. Having too many staff members on board causes you to pay more in labor costs, and causes servers to make fewer tips. Thus, make it a point to assess the workload required for back and front-of-the-house. Then, use this assessment to hire the right amount of staff for your restaurant.
5. Have a limited menu
Many Filipino diners like having many options to choose from. But if your restaurant is just starting and can’t handle an extensive menu, keep your food options limited. This way, you can focus more on the quality and not the quantity of the dishes on your menu. Moreover, your food costs will be easier to control since a limited menu doesn’t produce that much wastage.
Managing restaurant finances is just part of a bigger responsibility: keeping the business operational. Learning how to do it is the best way to ensure long-term success. So if you’re new to the industry and still unsure of your ways, be sure to keep these tips in mind. Don’t forget to use all the help you can get from your loved ones, friends, business partners, staff, and colleagues.