Restaurants are an essential feature in any community. They’re a place for people to meet up with friends, family, and coworkers. Instead of preparing a meal at home and cleaning up after dinner, you can take your family to a restaurant and eat a meal without worrying about checking the oven or scrubbing pans.
Unfortunately, it’s hard for restaurants to succeed, and many close their doors less than a year after opening. Restaurant owners can improve their restaurant chain’s chances of success by preparing a comprehensive business plan that includes a detailed budget. Understanding your expenses and financing options can help you make intelligent business decisions before opening your doors. Let’s look at some expenses you should include in your budget and how to secure financing for your restaurant chain.
You can acquire kitchen equipment with direct financing.
Every restaurant needs kitchen equipment. Your cooks need refrigerators and freezers for storing foods. They also need food prep tables to prepare dishes and a stove. You’ll also need microwave ovens, dishwashers, and food warming equipment. Depending on what’s on your menu, you may also need ice machines, deep fryers, and mixers.
When shopping for kitchen equipment, you can opt to work with an equipment supplier that offers direct financing. You don’t have to purchase your equipment to take advantage of direct financing, either. You can use vendor financing to lease kitchen equipment affordably and secure the items you need to set up your kitchens. This is a great option for new restaurant owners who want to ensure employees have everything they need without overspending on equipment.
You should invest in security.
Unfortunately, employers must consider theft when preparing a budget. Employee theft costs employers billions each year, and employee theft isn’t the only threat to your revenue. Thieves and consumers can also steal from your business, making it harder for you to cover your operating expenses. In addition to the financial losses from stolen funds or property, you’ll also pay higher insurance rates if you have multiple claims.
Install security cameras before opening your restaurants. Verkada bullet, fisheye, and dome series cameras are options for monitoring entryways and other locations inside and outside your restaurants. Verkada cameras can deter thieves from targeting your establishments, preventing losses. You can also use their environmental sensors to monitor conditions in your restaurant from any location. Verkada also has access control systems you can use to prevent unauthorized access to your restaurant or rooms within your establishment, enabling you to secure valuables.
You’ll need funds to pay your employees and suppliers.
You’ll need fresh produce, meat, and other grocery items, including condiments and beverages, to operate. You’ll also need funds to pay your employees. Restaurants need cooks, hosts, and servers. You may also need a bookkeeper to look after your accounts.
You’ll also need to include funds for service providers. You may set up an account with a local laundromat that cleans tablecloths, aprons, and dishcloths. You may also need to contact a cleaning company to clean your restaurant.
You can apply for guaranteed loans.
The U.S. Small Business Administration (SBA) offers valuable resources for aspiring business owners. You can apply for loans guaranteed by the SBA. When you’re approved for a guaranteed loan, you can apply to one of the SBA-approved lenders who comply with SBA loan guidelines, ensuring you receive a reasonable interest rate. Since the SBA guarantees the loan, you have a better chance of being approved for the funds you need.
SBA loans include microloans of up to $50,000. These small loans enable you to cover business expansion costs or pay for essentials such as supplies and equipment. You can borrow up to $5 with a 7(a) loan and use those funds to cover operating expenses.
Securing restaurant financing starts with creating a budget outlining your startup and operating costs. You can consider direct financing for some essentials and apply for SBA loans to cover other operating expenses.