Restaurant Owners Experiencing a Liquidity Crisis – 7 Tips to Improve Your Financial Position

There is frequent media coverage regarding restaurant owners since the industry was one of the hardest hit by the pandemic. Despite their best efforts, some restaurant owners have struggled to return to a viable financial situation. In addition to repaying the government loans, restaurant owners’ fixed costs (rent, raw materials, employee salaries) have also increased significantly. Furthermore, finding qualified workers and contending with high turnover is challenging. And to make matters worse, accessing credit is now more difficult. Furthermore, consumers are also affected by inflation and visit restaurants less often. In a nutshell, restaurant owners are faced with many challenges.

If this sounds familiar, fortunately, there are solutions to help you improve your financial situation.

1. Find a good manager

First and foremost, you should bear in mind that being a restaurant owner and excellent chef doesn’t necessarily mean that you’re a good manager. After all, no one can be good at everything! The important thing is to surround yourself with people who complement you and are skilled in fields that you are not. Ask your contacts to help you find a good manager. Then you can focus on what you do best: cooking.

2. Change your business hours

Are Monday evenings not profitable due to fewer customers? Don’t hesitate to close the restaurant if certain evenings are quiet. You can review your opening hours every season.

3. Adapt your menu

Reduce the number of choices on your menu and keep the most popular and most profitable dishes. This will also help you avoid food waste.

4. Maximize your income

Offer delivery services and takeout meals to diversify your clientele and increase your sales. If you developed this service during the pandemic, you’re already halfway there!
Introduce special offers and organize events to attract clients outside of peak hours. For example, on Tuesday evenings, you could offer a second dish at 50% off.

5. Use technology to innovate

Bring your business up to date by using technology. For example, you can use technology to:

• Build or improve your website and Google Business Profile.
• Introduce an integrated management system to track sales, manage stock and improve your business’s operational efficiency.
• Use social media to increase your visibility and attract new customers.

Naturally, these initiatives are not free. However, you should view them as long-term investments.

6. Improve your cash management

Draw up a detailed budget of all your expenses and projected revenues. Track any discrepancies and make adjustments as quickly as possible.
Try to negotiate volume rebates with your suppliers.

7. Train your employees

Encourage versatility in your team to ensure the restaurant is as efficient as possible. Offer your staff on-the-job training. This will benefit both you and them.

However, if, despite all this advice, your financial situation remains unsustainable and you’re worried about your debt, don’t hesitate to contact us. Our experts know the ins and outs of the restaurant sector and have helped many restaurant owners in the same situation as you.