How to Make a Budget in Restaurants

Planning an accurate budget will help your restaurant succeed.

The budget is an important tool to help your restaurant succeed. It allows you to track your sales and expenses. It helps you determine which company or products to choose, and it monitors whether or not you are making a profit for the year. A restaurant budget should include all operating costs, and should be based on expected income for the year. Once you have been in business for a few years you will be able to predict slower times of the year for your restaurant.

Instructions

1. List the amount you need to pay in rent or on a mortgage, any utilities you pay, maintenance costs and licenses you will have to pay for the entire year. You can break down these payments into monthly installments to make it easier to plan for them.

2. Determine the amount you will spend on supplies each month. If you have been open for a few months, you should be able to predict how much to spend each month on food and other supplies. Although market costs may change for such items as fresh seafood and vegetables, you should have a general idea of how much supplies will cost each month.

3. Estimate your cost for employees each month. In addition to determining the amount you will pay in salaries, you need to estimate payroll taxes and the cost of any benefits you provide for your employees.

4. Add together any miscellaneous expenses you have for the month. This may include marketing and advertising costs, insurance for your business and any monthly fees if you are running a franchised business.

5. Predict how much you will bring in each month. The first year of business this may be difficult to do. In subsequent years, you can base the number on sales for previous years, making adjustments according to economic conditions in your area.

6. Compare the total of your monthly expenses with your predicted sales. If your expenses exceed your sales you need to reduce your expenses. Adjusting your menu to include less-expensive items or reducing your staff during slow business hours are two strategies to cut expenses.

7. Track your budget each month and make adjustments as needed. If your sales improve you can increase your food order and adjust your budget accordingly throughout the month.

Tips & Warnings

• Be sure to pay your payroll taxes as well as any other taxes on time; you do not want to lose your business because you owe back taxes.

References

• Inc.: How to Start a Business Budget
• The Wisdom Journal; 10 Tips for Drafting Your Written Business Budget; Tom Walker; March 2008
• Restaurant Equipment and Supplies: Basic Tips for Creating and Using an Annual Budget in Your Restaurant