It was always your dream to have your own restaurant. You envisioned a small place on the corner of a cobblestone street dotted with dim street lamps, your simple awning an inviting and welcoming sight on the first chilly day in fall. Inside, the Italian bistro would have exposed brick, white linen tables, with a view into the kitchen with copper pans hanging overhead. The intimate dining room of a handful of customers would whisper hushed praises over the mussels, the potato gnocchi, or perhaps the braised lamb shank with garlic mashed potatoes.
Well, that dream is now a reality, and as a business owner, you may realize there is so much more that goes into a restaurant than this cozy vision. The restaurant industry is one of the toughest industries out there. It requires a tremendous amount of careful research, into the community, available spaces, competitors, and available local fare before you can even think about a name. Then once everything is in place, and you are ready to begin the steps toward establishing your restaurant, you must pay a significant amount of money upfront. These costs include dining furniture, every piece of equipment needed for a professional kitchen that includes expensive pots, pans and utensils, restaurant décor, marketing to spread the word, and a staff to run the place.
Before you go any further, you need to have cash flow forecasting tools in place. Research available top-tier cash flow forecasting software solutions like the Quantrix Modeler by Quantrix, and implement it before your first customer orders the fettuccini alfredo.
Once this cash flow forecasting software is in place, it will help you navigate the confusing world of cash flow forecasting in the food industry. Some examples:
Food costs: Even though your menu stays the same, your food bill could change daily for the same ingredients. There are many contributing factors to explain this. First it depends on the breakdown of local versus national suppliers. Local food is certainly better tasting and more of a draw for residents, and while it’s cheaper, it’s not always as readily available as bigger manufacturers – which can be more costly. Food recalls, ingredient shortages, gas prices upping the price of food transportation, price jumps in specialty foods – this all makes it difficult to predict monthly food budgets.
Tourism peaks and dips: In the restaurant world, one month from the next could be the difference between a three-week waiting list and a quiet evening with only five patrons. If you are still new to the area, get to know it fast. Access an events calendar and know when cruise ships come into town, or if you could participate in Restaurant Week. While it is impossible to predict what each night will bring, do your homework to at least know the factors surrounding you.
Cash flow forecasting software can turn these expenses, situational events, and “what ifs” into clear, actionable budgets, forecasts, and plans to achieve financial stability in an unstable market. Don’t let your restaurant dreams become overclouded with worry and financial stress. Instead, implement cash flow forecasting and focus on the food.
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