As an aspiring restaurateur or an experienced professional, budgeting is no doubt one of your daily concerns. The flow of money requires particular vigilance, especially in a sector as competitive as yours.
It is essential to consider past history, but also to forecast future revenues and expenses. This will allow you to make the right decisions and implement the right strategies should reality deviate from the projections in your budget forecast.
Check frequently that your cash flow matches your financial projections, increase your revenues, reduce your expenses, use a professional or a specialized software, we take stock of the solutions that will allow you to balance your budget.
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Monitor actual expendituresÂ
If your budget is well done, most of the financial estimates detailing your fixed and variable expenses as well as the revenues of your establishment will be confirmed, but you will certainly not be able to calculate everything to the penny.
As any restaurateur will tell you, there are projections on the one hand and the reality on the other. It is crucial to regularly compare your real time numbers with your projected budget so that you can adjust when expenses are higher or revenues are lower than you anticipated.
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4 tips to reduce your facility's expenses
To turn your budget into a positive one, there are also some strategies you can implement to reduce your expenses and control your costs.Â
1. Limit the cost of raw material
Once you have identified your major expenses, there are a number of ways to reduce costs. One of them may be tobuy ingredients in bulk to negotiate better prices. However, be careful not to overextend yourself or you will find yourself with a large amount of inventory at the end of the week. Favouring seasonal products and reducing the number of intermediaries are also part of the strategies you can consider.
2. Reduce waste
To reduce your expenses, declare war on waste. To do this, you can buy just-in-time and order only the quantity you think will be consumed during a given period. The result? Less chance of food ending up in the trash. But beware of running out of stock.
Reducing waste also means using proper cooking techniques, storing food properly, and taking into account food that is at risk of going to waste when planning menus.
👉 Going further: 8 tips to avoid food waste
3. Assess your human resources needs
Take the time toregularly evaluate your employees'salaries and overtime to ensure that they are in line with your budget. Make sure your employees are doing the job they were hired to do and that they are meeting the goals you have set for them. These should be ambitious, but achievable.
Finally, let them know about your facility's budget issues. This is a good way to involve them in your budget forecast.
4. Ban unnecessary or unused equipment
Unnecessary or unused materials and equipment should also be given special attention. Assume that anything that takes up space costs you money. You pay rent or pay off a loan to store it. If it's not needed, you might as well get rid of it. To do this, don't hesitate to make a regular inventory of all the goods you own and ask your staff about their real use. Is the power of the grill appropriate? Is it worth keeping a juicer in the kitchen when you don't offer juice on the menu?Â
Another reason for dropping some devices may be training issues. Have your staff been trained to use your cash register to its full potential?
Also check the consumption of your kitchen equipment. Shouldn't you renew a cooking appliance that uses too much energy?
👉 Going further: How to reduce your restaurant's electricity bill?
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6 ideas to increase your point of sale revenues
To keep your budget balanced or, better yet, to have more money coming in than going out, you can focus your efforts on increasing your revenues.
1. Increase your marketing budgetÂ
Lack of visibility can be a hindrance to the development of your business and limit your income. It is therefore important to allocate a portion of your funds to marketing activities that you can analyze and control from your accounting software.
Local press, radio or TV advertising, billboards, social networks, SEO, SEA, websites, trade shows, promotional events, collaboration with influencers, the means to get known are numerous, but must be selected carefully and take into account the return on investment (ROI).
Being visible is one thing, but are you present on the communication channels that your target audience prefers?Â
2. Increase the rotation per table
One way to increase your restaurant's revenue is to increase the number of covers served per shift without rushing customers. To do this, start by calculating your turnover rate during your opening hours. To do this, simply divide the number of customers seated by the number of tables available at the end of the period in question. Once you have this figure in mind, it's time to take action.
You can:
- Train your staff to ensure that they are always organized and proactive,
- Be diplomatic and subtle during busy periods by asking customers if they have finished their meal, if they want to continue their discussion at the bar or if they want to order something else.
- adopt a reservation system,
- use all the space available in your room or terrace,
- adapt the size of the table to the number of people,
- reduce waiting time.
The reduction of waiting time at the time of the order, of the cashing and even of the service, here is a ready-made transition for the next paragraph: the digitalization.
3. Differentiate yourself from the competitionÂ
When you were developing your business plan, you probably did a thorough study of the competition. One of the keys to making more revenue than the rival establishment is to propose a differentiating offer to attract more customers. More affordable prices, better quality ingredients, animation, an innovative concept, technological solutions, a loyalty program, be creative to convince your clientele to prefer your restaurant to your competitor's.
4. Analyze trends in the restaurant industry
It's important to stay informed about emerging trends in the restaurant industry so you know what works best and what your target audience is likely to be receptive to. Don't be afraid to reinvent yourself!
The growing interest in vegetarian cuisine, for example, may prompt you to include more animal-free dishes on your menu. The success of food halls could give you the idea of organizing a cultural event every week. The attraction of local products, products from short circuits or organic, the omnipresent role of technology in our lives, the desire to discover new flavors are all avenues to explore.Â
5. Diversify the products and services offered in your restaurant
There are 1,001 ways to diversify your revenue streams. One obvious way is omnichannel sales, so that you are no longer entirely dependent on in-store sales. Even if the French still go to restaurants, they increasingly want to be able to order online or have their food delivered.
Have you ever thought about offering one or more of the following options?Â
- Hosting cultural events
- Offer a catering service
- Rent your space for seminars
- Create a recipe book and make it available for sale
- Organize cooking classes
We'd love to hear your ideas!
Your establishment, even when it is closed to the general public, will continue to make money and amortize your fixed costs for a lower investment.Â
👉 To go further: how to increase your sales?
6. Digitize your entire restaurant
‍Digitizing a restaurant represents a certain investment, but given its positive impact, it will quickly pay for itself.
A quick tour of proven digital solutions is in order:
- The order terminal to increase the average shopping cart by 25% and save time for your customers and your teams. Once adopted, you won't be able to do without it, especially during rush periods.
- Online ordering to appeal to a wider range of customers. That is: those who swear by click&collect, those for whom delivery has become a habit and those who visit your restaurant but prefer to enjoy their meal outside. In short, all the people who probably wouldn't be interested in your establishment without this super convenient innovation!
- The QR code, placed directly on the tables, to allow customers to consult the menu, order and pay in total autonomy. A time saving for you, your waiters and your customers.
- The kitchen production screen to improve staff productivity, reduce order errors, serve food in a more timely manner and reduce wait times.
By adopting these technologies, you ensure an optimal customer experience and give the image of an innovative restaurant that cares about the well-being of everyone who eats there. Logically, satisfied customers will come back and others will soon enter your establishment for the very first time. Each of these solutions is in fact an opportunity to increase your revenues.Â
👉 To learn more about the Innovorder ecosystem that will boost the profitability of your outlet, contact one of our experts!
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Evaluate your profit margins
By adopting the above strategies, you can balance your budget and ensure that revenues exceed expenses.
Increasing your cash flow is always a good thing. It's a performance indicator that business is good and your restaurant has a bright future ahead of it. Now, you'd better make sure that this cash flow is coming from the products and services that make the margins margins. This will allow you to increase your profits to reinvest in your establishment (digitization, staff salaries, renovation, expansion), start a franchise chain, pay off your credit faster, save money, etc.
👉 Margin and profitability in food service: understanding it all .
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Getting helpÂ
It is tempting to want to take care of all the tasks related to budgeting your restaurant yourself so that you don't have to pay a professional and save money, but believe us, this investment will quickly pay off. Thanks to his or her precise projections and knowledge of accounting, an accountant will provide you with a solid tool that you can use to manage your establishment's finances in an optimal manner.
You can also rely on management software, such as IO Analyticswhich will allow you to have an overview of your restaurant's activity, track your expenses and establish budgets. Other software can also help you manage inventory as well as the flow of raw materials and human resources.
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Find out how Innovorder can help you achieve your goals by contacting a consultant today!
