Proper management of your restaurant finances is of the utmost relevance to your restaurant success in the long run.

If you look at the statistics, the numbers aren’t promising. Almost two-thirds of newly opened restaurants close shop in the first year of doing business.

Poor management and not understanding restaurant finances lead to financial losses which consequentially lead to closure.

Understanding your day to day finances and getting a closer picture of your cash flow is the way to make sure that doesn’t happen.

Naturally, your daily finances will impact your total business plan which highly depends upon daily revenue.

Restaurant Finances Daily Review

Daily review is a good way to show how your restaurant is doing and will enable you to track your financial growth (or fall) during a longer period of time.

These reviews will come in handy later on when you compare your monthly and yearly business traffic. You’ll be able to analyze your sales and expenditures because you kept the history of the business.

With this “tool” a t your disposal you can easily predict your future sales, trends, events etc. and adjust the business plan accordingly.

Restaurateur News - Restaurant Financing Calculator
Source: RMagazine

Difference between sales and net income

These two are far from the same thing. Even if you increase your sales drastically that doesn’t mean your income will follow the trend. Your costs have to lower if you think of earning more money

Your costs have to lower if you think of earning more money. Investing in marketing or interior design will pay off. However, that won’t happen over night.

It’s a long process but if conducted properly it will increase your net income.


Control Staff Expenditures

Labour isn’t cheap these days so this is something you can save money on if you divide it wisely.

You should avoid overstaffing your restaurant because it’s practically money wasted. Not only that, but the tips are distributed to more people which mean less money for an individual

Understaffing won’t bring you any good also since it will only make your employees feel like you’re giving them the same amount of money for more work.

Although it isn’t easy to find a silver lining right away after a few months work you should know which periods of day/month/year require more/less working power.

For the complete guide to restaurant payroll, click here.

Restaurateur News - Restaurant Finances Staff
Source: RDS Training

Food costs

Next to labor cost, food is your biggest concern. Food is generally expensive and if you’re running a mid-sized restaurant you could save a decent amount of money on food.

Try negotiating with your suppliers in order to get a larger amount discounts. You should approximately know which sorts of products have longer/shorter expiration dates.

You should approximately know which sorts of products have longer/shorter expiration dates. As a manager, you should also know which menu items are selling more or less often.

Combining those two, you can stock more food for less money without worrying that your expiration date will come near.

Buying some products from local farms instead of commercial products can also help in saving money if you struck a good deal.


If you’re looking to read something like “restaurant management for dummies” you should check Restaurant Financial Basics.


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