Anyone who opens a restaurant likes to cook, but not necessarily deal with spreadsheets. The problem is that neglecting financial management can be very expensive for the business and compromise its growth plans, warns economist Marcela Kawauti, with the experience of someone who has worked with financial education for 15 years – especially for entrepreneurs.
“Many people find the subject boring, but it is important to manage finances so that this becomes a strategic routine for the business to take off instead of sucking up the energy that the entrepreneur should spend dedicating themselves to their main activity”, says the expert.
She lists five very common practices that sabotage the financial management of restaurants – and explains what the solutions are to better manage the budget and plan for growth.
Invisible expenses
Unplanned purchases or purchases that are not written down, even if they are of low value, escape the entrepreneur's radar. But, added together, they saw a significant amount at the end of the month. “This is money that could be better directed,” says Marcela.
The solution: monitor your cash flow daily and write down everything that comes in and goes out to have better control over invisible expenses.
Inefficient spending
These are poorly planned and can be expensive. An example: shopping at the nearest market, which is more expensive than a supplier. “It is necessary to be efficient in spending and costs, understanding who the best suppliers are and the best ways and times to spend money”, warns the economist.
The solution: plan purchases in detail and buy where the best price is or in large quantities to negotiate a discount.
Lack of long-term vision
It's no use just planning a month's budget: the ideal is to have a long-term vision. “Entrepreneurs need to predict, for example, the seasonality that affects the business in certain months, such as holidays”, says Marcela.
The solution: plan for 12 months taking seasonality into account.
Unnecessary debts
Without financial planning, entrepreneurs fall into the trap of asking for loans to put out fires. “These are expensive and inappropriate debts, such as using an individual's credit card to pay credit bills. In the end, high interest rates overload the legal entity’s budget”, warns the economist.
The solution: resort to cheaper financing lines, such as working capital. And plan for expensive debts, so you have time to research the best credit options.
Mix of accounts
Many entrepreneurs do not separate personal money from what belongs to the business. “Making this division is important because when you need to make an adjustment to the budget, you don’t know where, because everything is mixed up”, says Marcela.
The solution: have separate current accounts and control spreadsheets for individuals and legal entities.
By avoiding these “sabotages”, entrepreneurs can carry out good financial management and begin to better project their costs, income and expenses. “When the month ends, it is important to look back and compare how much the restaurant received and how much it had planned, to improve estimates for the following month”, explains Marcela.
This way it is possible to set more ambitious goals in the planning. “If I want to sell twice as much, I need to put more money into marketing. Every goal has a cost”, adds the economist. Furthermore, it becomes easier to understand how to have money left over at the end of the month – and what to do with it.
Marcela's tip is to divide the destination of profit into three categories: working capital, investment in the business and financial reserve. “It is important to think about how resources can be better spent. Many entrepreneurs know where the costs go but don’t think about the money they receive.”
For more tips from Marcela and other experts on management and restaurant digitalization, watch the Super Lives iFood Takes Off, on the channel iFood for Partners on Youtube.
