Last update at August 18, 2020
Building your own restaurant business is an exciting and ambitious prospect. However, writing an efficient business plan which will help you track and manage its finances also matters quite a bit. According to Fit Small Business, most restaurants have a 3-5% profit margin, while social media marketing can help increase your guests’ engagement by 20-40%. Additionally, Small Biz Genius reported that 90% of guests check restaurants online before visiting; however, 41% of owners admit that operating costs are a challenge.
Generating revenue and staying afloat is undoubtedly important. So is smart marketing and appealing hosting once the guests come to you. How do you write a functioning financial strategy for your restaurant’s business plan in order to make the most out of your new venture?
Let’s briefly address why the financial section of your restaurant business plan is important. Your restaurant is a revenue-based business. You will effectively succeed or fail on the market, depending on how well you can manage your income, taxes, payroll, and marketing expenses. No matter how satisfied you may be with your revenue, it’s impossible to predict how trends will change in the upcoming weeks and months.
Rachel Avery, Head of Business Development at Supreme Dissertations and PR Writer at Best Essays Education, said that: “Hospitality businesses are companies like any other. Whether you operate as an exclusive dining service or a fast-food takeout, managing a business’ finances is extremely important for business development and taxing purposes. This is why writing a practical financial plan for future reference is a great way to mitigate potential issues going forward.”
To summarize, some of the concrete benefits you can look forward to if you want to write a proper financial section for your restaurant’s business plan include:
Don’t make any investments before you have an overview of your initial resources. Even if your restaurant is already operational, draw a line and summarize how much revenue you are working with at the moment.
This will stop you from unnecessary expenses and limit your spending to maintenance, wages, and promotional content marketing. There is nothing worse than overspending in the first months restaurant’s operation. A short summary of your initial budget will also help you as a restaurant owner to look at available resources in a more objective manner.
It’s good practice to start tracking your restaurant’s monetary resources from day one. While you may be experienced in bookkeeping and financial planning personally, it’s always better to refer to a licensed third-party.
Make sure to check out accounting and invoicing software solutions from Comparisun to discover which platform suits your restaurant the most. Such a solution will allow you to keep your books in check from day one and ensure that you always have professional accounting support available. Write internal, ongoing documentation in regards to your income and expenses as well to keep a closer eye on how your restaurant business is doing.
As the old saying goes, you need to invest in order to profit. Marketing is one of the most powerful tools in your arsenal in that respect. While you can handle content marketing internally and without hiring media managers, you will still need to invest resources into advertisement, both online and physical.
Allocate a percentage of your budget to promote your restaurant on social media, Google, or even YouTube via short videos. Writing tools such as Trust My Paper and Evernote, as well as Grab My Essay, Grammarly, and Top Essay Writing, can help on a budget. Make sure to create original, creative, and representative materials to showcase your restaurant, menu, and staff. This section of your financial plan will undoubtedly have a large impact on your overall revenue, so don’t skim on content marketing.
Depending on your local competition, price of ingredients, and whether or not you offer in-restaurant services or takeout, you should draft a sample pricing plan. Don’t settle for a pricing plan before you gauge the interest and lifestyle choices of your local customer base.
Test your pricing plan with smaller groups or launch with discounted prices and slowly bring them to your desired level. It’s never a good idea to launch a restaurant business with an exclusive pricing plan which most customers won’t be able to afford. This will negatively reflect on your financial performance and cause layoffs and cutbacks – write your pricing plan carefully.
You should always keep a close eye on your gains over expenses on a monthly basis. As long as your profit margins are in the positive, you should keep doing what you were doing. It’s good practice to implement payroll service software into your restaurant’s business model to keep wages and bonuses under a watchful eye. Likewise, manage and store daily reports of your restaurant’s performance to more precisely gauge where your customer base’s interests lie.
Once you notice dips in performance, you can modify your content marketing strategy, offer loyalty incentives, or otherwise boost your profit. Your employees are the last people who should suffer if drops in revenue happen in your restaurant. This is why close monitoring of each month’s performance will allow you to circumvent that.
It can be extremely challenging to launch a restaurant business, especially in light of the 2020’s competitive market. However, once you establish a stable financial pipeline and monitor your revenue, while also investing in a smart way, only the sky is the limit.
It’s always a good idea to refer to a small businesses advice platform such as Comparisun if you get bogged down in legalities and finance. Outline your initial budget, plan your marketing strategy, and draft a pricing structure which can sustain your restaurant for the foreseeable future. Before you know it, you will have a successful restaurant business venture with stable finances under your wing.
Bio: Bridgette Hernandez is a professional content marketer and writing editor at Subjecto and Classy Essay writing services. She has dedicated her career to research and writing about industries such as digital marketing, business development, and social media management. Bridgette spends her free time writing notes in her journal and spending time with her dogs.
Written by Bridgette Hernandez For Comparisun
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