As you begin in the restaurant owner business, you will need to consider ongoing expenses. Planning for startup costs are important, but what about things that must be paid for as you move from opening day into the future?
Obviously electricity and gas are of paramount importance, but there are many ongoing costs that you need to consider and plan for to make your restaurant a success. Here are 5 things to consider:
- Accounting Fees: This one ranks the top of the list due to its utility from startup to everyday operation. Having an accountant on retainer each month can free up a lot of time for a new business owner of any type. An accountant with experience in the restaurant industry can help to track a number of things from cost/revenue analysis to inventory management and more.
- Maintenance and Emergency Fund: When running your restaurant, expecting the unexpected can save you from serious trouble down the road. A restaurant in its early stages cannot afford to have a problem like needing emergency repairs on appliances that may keep it from opening for business. If that’s the case for you, you should contact a reputable appliance repair company to get an inspection. Lost revenue due to the unforeseen can spell doom for any enterprise, so be sure to have a separate account for just this kind of situation.
- Distributor/Vendor Fees and Billing: Food and beverage costs are obviously a continued expense for a restaurant. One pitfall that many new restaurants run into is being in debt to their distributors after getting behind because of poor calculations when it comes to supply. Being able to correctly anticipate needed shipments of food or beverages can keep your business running and your vendors and distributors happy (and out of court with you!).
- Ongoing Equipment Costs: Plates break, glasses crash onto dining room floors and pans can become warped or burnt. These cost are inevitable, and should be planned for accordingly. A restaurant that is prepared to have its oven repaired at a moment’s notice is one that will weather an emergency that could otherwise be disastrous. A good rule of thumb is to set aside enough funds to replace 1/3 of your expendable assets like plates, silverware, cooking pots and pans.
- Insurance: Every restaurant should have insurance in the event that a fire or other disaster should cause a closure. Finding an insurance company is very easy today, but the question is: which one is the right one? When searching for an insurer for your restaurant, look for an agency/company that has experience. Another way to find the right one is to ask other restaurant owners who they use for insurance.
Running a well prepared restaurant can be rewarding and very satisfying. Being prepared for not only startup costs but ongoing costs going forward into the future will help to ensure the success and profitability of your restaurant.
Preparation and forethought can be the difference between victory and defeat!