Save costs, create cash flow, a survival for restaurants

Cash Flow It is one of the important things in doing business, no matter what type of business it is. Especially in the restaurant business, cash flow is very important because most restaurant businesses have daily expenses that require cash flow. But it is often found that there are still a number of restaurant operators who neglect cash flow. Because it may be seen that each day there are still sales and there is enough money circulating in the system to cover expenses, which is a very risky matter and has already shown results in the crisis that affects sales. When cash flow reserves are insufficient, many stores are unable to continue.

This Covid-19 crisis has made us rethink the basics that have always been taught for running a restaurant business, which are: Must have at least 6 months of reserve funds This means that in the next 6 months, even if there are no sales, the business will still have reserve funds to pay various expenses so that the business can continue to operate because doing business requires time to be successful. Therefore, this is a good opportunity to re-emphasize cash flow. We have cost management guidelines to create cash flow for the shop to continue. Even though there have been relaxations in measures to allow restaurants to open for dine-in services, in this initial phase... It is unlikely that income will return to pre-COVID-19 levels. Due to various environmental factors, when income decreases, it will affect cash flow as well.

So, the first thing that entrepreneurs need to deal with is

1. The matter of food costs cost , which of course when we open a shop, we have to buy raw materials. And originally, when there was a lockdown, we might buy raw materials on a daily basis. When they ran out, we closed the shop. But when it's open for dine-in, buying things on a daily basis may not be suitable. We have to buy at least 2 days' worth of supplies in order to make stock management easier.

When there is a stock reserve, it is equivalent to putting cash flow into it, which is where operators must carefully calculate the daily usage.  Learn professional techniques for storing ingredients. In the free online course here

2. Change your shopping behavior to match your cash flow. From the original purchase in packs to save money, to get promotions or whatever, you may have to think about purchasing a smaller quantity to be enough for 2-3 days of use and then assess your cash flow on a daily basis and adjust it as needed because we want to maintain the cash flow as much as possible first. However, we must also consider that:

Is this type of purchase worth the travel and shipping costs?

3. Assessment of market situation, customer needs or competition Because the ingredients, some types of menus that may have sold well before Covid-19 may not be like that anymore because customers have other options or other forms of competition in the market that do better than us. We have to assess in order to avoid ordering a lot of that ingredient. For example, grilled shrimp, which used to be a best-selling menu of some restaurants, may not be today because the market is flooded with shrimp. There are many options, the prices are very competitive, giving customers a better option to compare prices than us, etc.

4. Investing in packaging and various equipment according to the safety standards set by the CCSA or local government agencies, such as Table Shield or table dividers, look at the suitability for the type of shop, type of customer group. If you can save on investment while still meeting the set standards, you should choose to do it. The same goes for containers. Does the packaging need to be the best? Is it special or different? How much importance does the customer give to this part? These are things that the entrepreneur must analyze. Otherwise, the cash invested in this cost may be more than necessary. You can read.

How to choose the right packaging for delivery, convenient for the store, comfortable for customers, here. This is a guideline that some entrepreneurs may still overlook in terms of managing food costs, which account for the largest proportion of restaurant business costs. If entrepreneurs can manage this cost to reduce it without affecting product quality, it will help the business have a more liquid cash flow. The current situation, according to the assessments of various analysts, it will take until the end of the year or 1 year for the economy to recover again. Therefore, for business people, maintaining cash flow as much as possible is important. Wherever you can save, you must do it. Or try to follow our initial recommendations. Click here to read other articles.