Increase Restaurant Cash Flow
Obviously, the best way to increase a restaurant’s cash flow is to increase sales. This is much easier said than done, especially during the current recession. However, that doesn’t mean increasing a restaurants cash flow is impossible. You can ramp up your advertising with little to no money, using social media sites like Facebook or Twitter. You can run various restaurant promotions, like two-for-one dinner nights or early bird specials to lure in budget-concsious patrons. When sales are slow, it is not the time to slash our advertising budget. Sometimes you need to spend some money (albeit, not very much money) to make some money.
Consider Taking Out a Restaurant Business Loan
A short-term business loan can help keep your restaurant in the black until business resumes. Your local small business bureau is a good place to start. Their mission is to help small, local businesses (that’s be you) stay in business. However, if traditional bank financing isn’t an option some small businesses turn to online lending companies that offer small business loans in the form of cash advances. Often called a merchant cash advance, these companies let businesses borrow against future credit card sales. They typically have higher fees than a traditional bank. For example if you want to borrow say $50,000 you would end up paying as much as $65,000, taken out of future credit card sales, further cutting into your daily cash flow. You can read more about merchant cash advances from About Guide to Business Finance, Rosemary Peavler. While it is tempting to take a cash advance for your restaurant, be careful that you aren’t miring your business deeper in debt.
Decrease Restaurant Overhead
If you find that your restaurant sales are not covering your expenses, it’s a good time to start trimming fat from inventory, payroll and other areas. Analyze your menu usage and see if there are items that aren’t selling. By decreasing your menu you can limit the amount of inventory you need to order each wee. Also cross utilizing menu items helps reduce waste and save money.
Be proactive about asking for help. If you know, you are going to have a hard time making the month’s mortgage payment, call you bank and ask for an extension. They do not want you to go out of business. They may extend your deadline or even restructure your loan, to help you make ends meet.
If certain days of the week are slow, like Monday dinners or Tuesday lunches, reduce the number of staff working- both on the floor and in the kitchen. Now is a good time for the restaurant manager or owner to work some overtime (that’s why you keep them on salary and not hourly). Read more about restaurants can save money.