It’s quite possible that the last time you made a budget for your restaurant was when you put together your original restaurant business plan.
Once you actually became a restaurant owner, it likely became more challenging to go back and revisit all those charts and graphs. A budget doesn’t have to be chiseled in stone, it should be something you periodically review to make sure it’s still realistic and working for you.
If you haven’t done it in a while, it’s time to review your restaurant budget in three key steps.
1. Evaluate your current reality.
Pull all your numbers from past years, and also your original restaurant business plan.
- What matches?
- Where were you off in your estimations?
- What did you overlook completely?
- Do you notice any trends?
2. Plan your new reality.
Using this data, reevaluate your original restaurant budget and create one that is more realistic for this point in time. Work off your real data, and also include factors beyond your control such as increased labor costs and rising food costs.
3. Live your new reality.
Devise a system to help you stay on budget and on track. Set up a schedule to review how you are doing with your restaurant budget, to make sure you’re sticking to it. Rely on your restaurant POS software to guide you. Maybe monthly works for you, or even quarterly. If number crunching doesn’t come naturally to you, check out some apps you can put right on your phone to help you stay on track.
When working on your new budget keep in mind these often overlooked expenses.
- Dues and fees: Do you belong to a neighborhood association? Do any of your credit cards or banks charge you fees? Does your rent have additional costs associated with garbage collection or common area maintenance? These can add up quickly if you forget to include them.
- Office supplies: Your attention may be focused on the kitchen and the dining room, but you’ll also have expenses for the work that makes it all happen. This can include your laptop and phone, as well as the WiFi to keep them running. You also have hosting fees associated with your website and possibly fees associated with your newsletter service. Don’t forget all those other boring things like printer ink, pens, and paper.
- Social Media: I know you’re thinking that the benefit of social media is that it’s free to sign up and use, right? But that is exactly why a lot of restaurateurs don’t account for the hidden costs that go into successful social media use. The biggest one is someone’s time who has the skills to effectively use social media. Also, more and more social media platforms are making it challenging for businesses to operate solely without using some of their paid features, so budget for some ads, sponsored content, and post boosts.
- The unexpected: No matter how well you plan, there are always going to be surprise expenses along the way. They could be something tangible like a fridge breaking and be needing a fast repair or replacement, or something less tangible like a weekend blizzard with a parking ban. Always keep a chunk of money set aside for surprises, and be sure to replenish that fund when you eventually use it.
An accurate restaurant budget that you can stick to takes a lot of pressure off of you when you think about how to start a restaurant, but it also is a long-term necessity. With a restaurant budget in place, now you’re free to focus on the important things, like delivering delicious food with excellent restaurant customer service.
Source: Kristin Crane for Restaurant Insider