Most restaurateurs fail to adequately and properly plan for the unexpected costs of their business. It is imperative you plan for everything – every contingency possible – to ensure your business succeeds in this high-stake hospitality industry. However, even if you fail to remember it all, you should still pursue your dream of owning a restaurant business.
It’s not uncommon for a business to be in the red for the first five to 10 years of the business before they see real profits coming in. It takes hard work and dedication to make a restaurant business successful. It also takes you looking realistically at your budget – where should you spend and where should you be saving?
Where are some areas you can save some money in?
Technology
Yes, your business will need technology if it is to survive and thrive, but it’s also the one area of the company that extra spending takes place. Ask yourself if your business really needs all the high-tech equipment you see advertised. Can your business survive using older tech equipment? If you can get away with the less expensive models, save yourself the cash and do it.
Marketing
In the past, your company may have needed the help of a marketing firm to spread the word about your restaurant. Today, the Internet is a restaurateur’s best friend. You’ve got all kinds of social media platforms that you can use – Facebook, Twitter, Instagram, etc. You don’t have to spend a lot of money to make an impact with your social media marketing campaign.
If you don’t feel you have the time to handle the day-to-day dealings of running a social media business (and chances are you won’t), hire a freelancer to contend with it for you. Freelancers are much cheaper than a firm.
Music
Many restaurants and retail stores have background music playing for their customers to enjoy while eating. Bear in mind that playing music in a restaurant comes with a cost. Since you are a commercial entity, you’ll need to pay a rights to music fee. This fee is a minimal cost compared to others you’ll deal with in the business, but it is one most restaurant entrepreneurs overlook and shouldn’t.
Utilities
All restaurant owners know they have to pay utilities, but they don’t ever consider the actual cost of using them. In fact, the cost may catch some owners off guard. Before you sign a contract, consider looking at the utility situation. If a prior business was located there, did they pay off their bill? Some utilities will force you to pay another entity’s debt before establishing the location in your name.
It’s unfortunate but does happen.