As with most other business opportunities, when you decide to open a restaurant, there are many costs associated and one of the first, and key elements to getting on your way is to develop a budget.
First, let’s look at some ways to make sure your budget is both realistic and successful in helping you meet your financial and business goals:
- Be realistic; understand all of the different costs and make sure you are realistic when budgeting for each, the only person you hurt by low balling numbers is yourself, because you will have to take the money from somewhere. This means try and focus on the reality of costs as opposed to what you hope things cost.
- Know what you have; assess all of your sources of financing from loans to personal investments to make sure you know just how much you have to invest and spend on your new business. This will help set the parameters and boundaries for your budget and your spending.
- Be strict; once you know what you can afford and what is realistic, try your very best to be as strict as possible with your budget. This means that sometimes you have to say no to things you may love, or understand that by opting for them, you are making a sacrifice elsewhere.
- Consult with an expert; asking for help from an accountant, a financial advisor, or both, can help you cover all your bases and ensure that you are on the right track, or can actually do the budget for you (with your help of course).
- Use technology; leverage one of the many different apps or software that exist solely for budgeting, some even as specific as to focus on restaurant and hospitality budgets and finances. These apps and software can make setting up your initial budget easy and straight forward and give you the control you need to start and eventually run your business.
- forecasting; make sure not just to budget for start up and initial costs, but understand what you can expect to be paying for everything from rent to food costs in 3 months, a year and even farther, if you are capable.
- Data is your friend; use data that is available to you to make informed decisions, forecasts and budgetary calls. There is lots of market research available through a number of different sources and platforms that can help you confirm whether your gut feeling is right or wrong.
- Ask your fellow restauranteurs; sometimes more practical budgeting and financial advice can come from those who have been where you are before, in this case, other restaurant owners. They can be great sources of information and advice when it comes to budgeting for opening a new restaurant.