While running and managing a restaurant business, you might have experienced unforeseen surprises. A rough surprise can overthrow a restaurant business. But there are things you can do to beat those unforeseen hassles.
The Undeniable Facts
Running a restaurant or café looks good on paper. You know people love to eat and if you can make a yummy meal, why not starts a restaurant business? Well, there are facts to it. If your restaurant can survive for five years, it will survive for the next 5 years more. But many restaurant businesses run down till that point. According to a survey, 90% of self-regulating restaurants fail in their initial year and, 70% fail within 3-5 years.
Insufficient Cash Flow
While running a restaurant, there will be costs for food, utilities, equipment, workforce, insurance, licenses and certifications. Insufficient cash flow is the major cause of restaurants failure. Most startup restaurant business owners don’t know what it takes to run a restaurant, and wear out of working capital even before the restaurant started making money.
When you started a restaurant, you need to make sure you have enough cash to cover initial expenditures for six months to a year. The best way is to ask successful restaurant owners about their financial obstacles and challenges they had to beat. Their experience will serve as a piece of advice or a roadmap to take off to success.
Restaurant business is a very pricey undertaking. As profit margins are high so is the failure. Therefore, managing a restaurant is a tough job for those that have limited capital or can’t obtain funding from a traditional lender. Many restaurateurs use their own capital or receive financial support from loved ones. Hiring an accountant can help in your pricey undertaking by setting financial targets to maneuver, or let it go before your restaurant fail.
Bad Business Practices Can Waste Cash
Following bad business practices not only lend a hand in retardant failure by wasting a lot of your money. Employee theft is a common practice in the industry. The absolute stealing of food without permission is a common in restraint industry. Have a policy of accounting such food stealing cost if you allow meals to your employees. Some offer free food or little-cost meals as a cost of doing business, while some require employees to bring their own meals. Established a policy of eating food on the clock so there’s no confusion.
Inexperience cooking is another thing that can screw you up. Most of the successful restaurant owners are former chefs or those who learn how to become one. If you want your restaurant to be success, you should learn how to reduce food waste and stumble on inventive ways to use food before it wastes, while still lowering costs and pleasing patrons.
Finally and the most important is the trembled health inspection. Food health inspectors can cease your restaurant if find unhygienic. Besides, you never know when an inspector will show up. Your restaurant must pursue all healthy measures. Save reputation by following all local laws healthy measures instead of saving money.
Time Management Is the Key
Time is another most important factor that decides the success and failure of your restaurant business, A new restaurant business takes unpredicted time and stress before going on to the road to success. 14-16 hour day shifts are usual and there are many other things that you need to manage until your restaurant starts making money.
Many restaurateurs think of getting out from under their restaurant, but the fact is many cracks up when they spends less time around the place. Problems can creep into the service. Many things can happen while you’re not around like health inspector can show up, or a dishonest employee can plan. Of course you can’t manage everything, but it takes a lot of confidence to pass your restaurant on to others.
Before starting a restaurant business, you need to prepare yourself and have a passion for food and your customers. The more you prepare the higher the chances of your success will be.