If you’re running a bar or a restaurant, you know how critical it is to know where you stand on finances. That’s money in and money out, simple as that..or is it? The hospitality business traditionally has a horrendously small profit margin. What is an average profit margin for a typical restaurant? If you’re profiting 5%-10% you’re doing pretty well. So it is so imperative to know all your costs up front and to project your spending the best you can. Initially starting out, it’s really all about revenue and that’s a no brainer. You may have an amazing concept, but if you can’t get it fully funded and off the ground, well there you go. Aside from revenue, you need a good place on rent, need strong staffing and good pricing. If you’re managing things properly, then your profit margins start to increase and you start to own a business and not a money pit.
There are so many factors to consider when opening a bar or restaurant. Food cost being one of the big ones. A good rule of thumb for food cost is around 30%. So be prepared for that. If you’re paying more, you need to shop around. Employee theft is also a real concern. You’re going to need a way to manage those factors. Also how are you going to keep track of food cost and your inventory? Well you need a good restaurant POS system. There are many great products out there, talk to several vendors to make sure you get the right solution for your industry. Get an onsite demo if you can, so you see exactly what you’re getting and working with. Also, I’d recommend working with someone local. When your stuff isn’t working, you need someone there pronto. Check review sites on POS systems and take them seriously. I know a lot of my products for starting my business came from referrals, so be sure to talk to industry insiders to find out what they’re using. Rather than dropping a lot of money up front on a, you might want to consider doing a lease to keep that revenue for emergencies and keep your monthly expenses in a manageable position. This is so important because you need to keep track of that money in and money out; it’s the heart of your business. When you’re ready to find the perfect solution, check out Buyerzone or visit POSUSA.com which are both great resources to compare POS system prices and providers, they have a great form you can fill out and you’ll get multiple quotes from vendors in your area. The key is to compare quotes and let the vendors work to earn your business.
Ok, I’ve gone on enough for now. Now get to work and open that restaurant & bar. 🙂