I’m going to admit that when I first started running my restaurant, I had zero knowledge in monitoring and managing cash flow. For me opening my restaurant was the end goal.
Let’s be honest, deciding on the venue and rent, name of the restaurant, restaurant concept, menu, staffing and hiring, and marketing of the restaurant can be exhausting!
A month after opening my restaurant, I realized that I had been so caught up in the day-to-day operations I had neglected the most important aspect of my business; the finances.
Being a new business owner, I didn’t know how to handle the daily finances and cash flow of my restaurant.
Knowing how to handle and manage your businesses cash flow and finances is important for operations and longevity of your restaurant. A business that’s able to manage their finances effectively can lead to long term success and sustainability.
Here’s 2 simple ways to get started when it comes to setting up your business for success!
Track Your Business Expenditure and Cash Flow
Keeping track of how much is just as important as tracking your revenue.
To put it simply, cash flow is the amount of cash your business generates versus the amount of cash that is spent on a daily, weekly and monthly basis. Not comprehending simple concept can result at being at the helm of a great financial risk.
One way to start monitoring your spending is to directly monitor your inventory and payroll.
4 key things to ask yourself are:
- How much are you spending on raw materials?
- How much are you spending on overheads?
- How much are you spending on paying your employees?
- Can you afford to hire more staff?
Setting a strict budget and game plan for these, can keep your spending in check. Essentially, choosing to make wise decisions can be the game changer in your restaurant surviving or plundering.
One of the most important aspects of managing a restaurant’s cash flow is to properly budget for upcoming expenses, such as rent, mortgage, utilities and food orders.
Never rely on credit for more than a week from suppliers to buy food. This will help prevent you from over buying food and spending more cash than you need to.
Generate Daily Restaurant Business Reviews
What’s that you ask? A daily business review of your restaurant allows you to gain a well-rounded perspective of your business in a comprehensive manner.
One tool you can employ to help you with this review is a point of sales (POS) system.
Today’s POS systems have evolved from it’s simple functionalities of performing only transactions. Adopting an efficient POS system will allow you to simplify key day-to-day business operations.
With a POS system, you can perform a thorough analysis of your business, such as real time sales reporting, digitized invoices and receipts, customer happiness management, tracking underperforming inventory to free up your cash flow, and even reach out to your customers to give out promotions and discounts.
Paying attention to the well-being of your restaurants is pivotal in understanding what works for your business and what doesn’t. Even the smallest details such as the number of sales for a particular item on your menu can make the biggest difference. This can influence everything from next week’s inventory update to even your restaurants popularity.
Not having a financial background can be daunting to new restaurant owners. Fortunately, there are POS systems that are equipped to aid in tracking your cash flow; Here are some POS systems that can help in managing your business with ease.
Ecount, a global firm that provides business management solutions for small and medium enterprises. Their product features range from accounting tracking, inventory management, full sales cycle management, payroll to predictive purchasing cycle management. Find out more and get in touch with them here https://www.ecount.com.my/
Weebo is a Singapore-based all-in-one POS system provider. Their POS system enables restaurant owners to track raw material management, inventory cash flow, staff management, and more. Find out more and get in touch with them here http://weebo.com.sg/
Storehub is a Malaysian-based cloud POS system provider. Their POS system provides digitized cashier, real time sales reporting, inventory management, customer service management and more. Find out more & get in touch with them them here https://www.storehub.com/
“Beware of little expenses. A small leak will sink a great ship”
– Benjamin Franklin