In this article we will provide 4 Simple Cash Flow Tips for Restaurants Owners seeking capital.
Is Positive cash flow imperative to the success of any small business?. Of course it is and it’s particularly important for entrepreneurs who are owners of restaurants. If you don’t manage cash flow properly, you can’t cover payroll, fund, a marketing campaign, pay vendors and purchase inventory. In order to deal with cash flow issues you need to learn how to manage income and expenses. These tips will help you manage cash flow better.
Most important, coping with cash flow crunches in your restaurant begins with recognizing how to manage them. Of course, if you’re tired of the feast or famine cycle where your cash reserves are concerned, check out these tips for getting on the right track.
Tip No 1: When was the last time you evaluated your menus. If the price of inventory is rising you may reconsider in offering that product on your menu. You may have items in your menu which are not profitable. You may have an item that the price is too high and the margin is too low. Why continue to sell that product on your menu? Aside from pricing you should reconsider in adding and highlighting products that are profitable on your menu. Not every product is profitable so you want to make sure that profitable products stand out from the rest with pictures, promotions and good descriptions.
Tip No 2: Use the Internet to increase traffic. There are numerous ways to increase traffic on the internet. Facebook posts are relatively inexpensive in relationship to the amount of traffic you can generate. Also, try using paid ads on Yelp.com. Groupon is another alternative. Groupon has a back end cost and not a front end cost but it can help you increase sales. If you need a digital marketing specialistto help you get traffic there are inexpensive solutions in the market.
Tip No 3: Track your cash flow weekly. You accountant may be great but the may not be assessing your cash flow weekly. Today there automated cloud base solutions that integrate directly with your bank account and every single transaction is posted immediately. Cloud base accounting is great because you can print out reports weekly. You don’t need a lot of reports. All you need to do is track your earnings and your expenses and determine the percentage of what each expense represents. Today, you can
obtain accountingsoftware on the cloud for FREE.
Tip No 4: Negotiate with Vendors. There are two areas you want to negotiate with vendors. The first area is discounts for bulk purchases. To make bulk purchases you may need more capital. You may save anywhere from 10% to 50% on the purchase of inventory. Also, renegotiate payment terms. Ask for 30 to 90 days net if you can. Specially when its slow season you want to stretch your payments as far out as you can to buy time.
These four tips can help you manage cash flow better and improve your company’s financial health.
By: Gil Zapata
Gil Zapata is the founder of Lendinero and is passionate about helping small businesses.
