By failing to prepare, you are preparing to fail. And this famous quote by Benjamin Franklin couldn’t be more true when discussing a restaurant budget plan. Without knowing how much money you plan on spending or how much profit you should earn, you are truly destined to fail.
But before you, as a restaurant owner, start panicking because you don’t have a proper restaurant budget plan, Orders2Me is here to help. With just a couple of simple tips and tricks, you can create a restaurant budget plan that will set your restoran up for success.
Understand the importance of having a restaurant budget plan
Your budget will play a vital role in your success. Thanks to these calculations you can predict how much money you will need to set aside for fixed costs and how much money you will need for some variable costs.
In addition to this, you will know how much money you will need to expand your business if you want. That can include having more employees or investing in a second location. Whatever the case may be, thanks to your budget plan, you will be prepared for everything that may happen.
Step 1: Set up an accounting process
This is something you have probably already implemented, but if you haven’t, this must be a first step. Besides having an accounting company (or an individual) that will help you with the whole accounting process, you should definitely invest in a quality POS.
The best POS systems allow you to track everything you need. They decrease the possibility of making mistakes, give you detailed reports and they can even include online food orders as if they were manually entered. So do invest in hiring help with the accounting process, but make your life easier with a quality POS system.
Step 2: Set a timeframe
Not every budget plan has to last for a specific amount of time. For example, it can last a year, but it also can last 3 months. You can experiment in the beginning and create a budget plan that lasts for a shorter period of time. This way you will be able to get used to creating budget plans and it will help you become more efficient when you prepare one.
Step 3: Use the past results
There is no easier way to create an efficient restaurant budget plan than to take into account the results from the year or two before. Only in this way will you be able to predict how much money you will need to set aside for different costs.
Let’s say that the year before you had so many customers during the holidays that you had to hire additional employees. If you check your costs from that period, you will know that the next year you will have to include them beforehand. And this is how you will be prepared for any costs that you may forget to include if you don’t look at the previous results.
Step 4: Write down all costs
Every restaurant is different when it comes to costs, so there is no one-size-fits-all solution. However, if you sit down and start writing down every possible cost you can think of, you are already on the right track.
You can divide costs into three broad categories. Number one is the category of fixed costs. These costs don’t change and they include rent, loan payments and insurance. Number two is the category of semi-fixed costs and these costs may vary, but not too much. They may include salaries, bills, supplies, etc. The last, but not the least, are non-fixed costs. These are the costs that are usually directly connected to the sales volumes or any other restaurant changes. They can include marketing, taxes, repairs, etc.
Step 5: Evaluate your budget
Now that you wrote everything down and that you analyzed the previous results, you can complete your restaurant budget plan. Once you are done, you should evaluate it to see whether you failed to include something or which costs can be reduced. This way you will see in which area you can earn more and where you should invest more.
Creating a restaurant budget plan can be one daunting task if you don’t do it properly. You might get lost in all the numbers, but if you invest in a good POS and someone who can help you with the accounting, there is nothing to be afraid of.
If you need help with POS integrations, get in touch with Orders2Me today.