A Common Restaurant Business Disaster


Unfortunately, here is a very common restaurant business scenario for you to contemplate:

You have decided to open a restaurant and you have, in your hand, what you think will be enough cash to make it happen. Next, you quit your job and began putting your deal together, but as you become more involved in the process you realize that it will cost more money than you planned.

Then you think, if I’m very careful, I can stretch my cash and make this happen. You also realize that it’s far too late to turn back now and you think that you need to hurry and get your restaurant business open so you can begin to make some money.

By doing that you may sign a lease which favors your landlord instead of you. At the same time, you may sign a lease in a terrible location for a restaurant business.

Since you are low on cash and in a hurry, you may decide to purchase a sign and remodel the building for your restaurant business later, after your open and making money.

Well, it was a battle for time, but you made it open before you ran out of money, but here is the problem. You’re open, and that is great. The problem is you don’t have any customers. No one will stop and eat at your restaurant business because your place doesn’t even look like it is open.

Regardless, you continue every day but you are still not busy. Since you opened without any cash you will begin to hurt financially and soon the stress will begin to creep into your life. Your stress level will reach such a heightened level that every time you get a customer you are assuring yourself that they will never return. Your customers will see the stress on your face and they can sense that something is wrong.

When people look for a place to eat they do not want to feel the way they feel at your place. Stress is a terrible thing which usually makes a bad situation even worse. After a month or so of this unbearable stress, you may begin to think about your life before open a shop and how great it really was.

Next, you may begin to think about how you could get back to your old life and get out of the restaurant business. You decide that you will simply sell the place, and then you realize that your sales are so low that no one in their right mind would even consider buying the place.

Next, you decide that you will simply close your restaurant business but as you begin to add up each of your expenses, such as your lease, your bank note, your suppliers, taxes, labor costs and so on you realize you can’t afford to close. You are losing money every day and you cannot afford to stay open.

It’s a tough situation, but the key to preventing this scenario from taking place is to have enough cash in the beginning. A new restaurant business cost much more than is normally allowed for. Before you quit your regular job, investigate all of your costs first. Make a trip to a restaurant business equipment company and price some equipment.

Once you have, honestly, determined the cost of opening your restaurant business make sure you not only have enough cash to pay all of these preopening expenses, including your opening food order, but then allow for an additional $5,000 which will see you through the first several months.

Plan for more cash than you think you will need to open your new restaurant business and take time with your location selection. If you handle these two steps properly you can avoid many problems and give yourself the chance you need.

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