The current economic crisis is scaring and keeping many entrepreneurs awake at night. At this point, you may be asking yourself: “My restaurant is in crisis, how can I recover my business and avoid having to close?” We've separated some important tips on the subject of strategic financial planning for restaurants, you can't miss it!
Renegotiate debts with suppliers
The crisis tightened and your company's billing may have dropped dramatically. In this scenario, the first and most critical attitude in terms of strategic financial planning is not to let yourself fall into despair.
In the current scenario, many companies are open to trading securities, therefore, get in touch with your suppliers, explain the delicate moment your restaurant is going through, demonstrate your interest in keeping accounts up to date, as you always have and request differentiated payment conditions, such as longer terms and exemption or reduction of late interest.
To do this, survey the titles that your company has open with suppliers, try to prepare a payment plan and schedule according to the current economic condition of your restaurant and present it to your suppliers.
The chances of being able to negotiate the bonds, extend payments and find better conditions are great and need to be explored.
Do a financial analysis and reduce costs
Our second tip in terms of financial strategic planning concerns cost reduction.
Many people are afraid of the term “cost reduction”, however, this will not always be a negative thing. After all, a simple but well-crafted cost reduction can save your company and your employees' jobs.
To apply the cost reduction strategy, analyse all expenses and commitments assumed by the company, no matter how small their values and impact on cash.
After the analysis, check among these expenses, those that can be reduced or eliminated at this time of difficulties.
Optimize your finances and reduce your restaurant's expenses to face the crisis in better conditions.
Keep control and organisation of accounts payable and receivable
Keep track of accounts payable and also accounts receivable from your restaurant, one of the most important steps in strategic financial planning is precisely this.
The entrepreneur needs to understand closely the real economic situation of his company, for this to know in detail his movement of accounts payable and receivable becomes something fundamental for the survival of the business.
Organize these issues very carefully, so that you can make the best strategies and decisions in the face of the crisis, avoiding unforeseen events and unpleasant surprises.
Control and monitor the company's cash flow
When we talk about strategic financial planning, many people tend to confuse the company's cash flow with accounts payable and receivable. However, there is a big difference between them.
Cash flow sets up a forecast and allows us to know not only the company's current cash situation but also future inflows and outflows. Having this kind of control is fundamental to the success of a company and its survival in times of crisis.
When revenues drop drastically, for example, measures need to be taken in return to reduce impacts on cash shortly, perhaps today the company still has cash resources to assume all commitments, but what about the future? Therefore, cash flow control is essential.
Therefore, the lack of cash flow control should be another critical warning sign for restaurants and companies in general.
Find alternatives to generate revenue
And last but not least, in terms of strategic financial planning, find alternatives to increase your company's revenues and turnover in this crisis period!
Have you ever thought about investing in delivery at your restaurant? Come and talk to one of our consultants here at Ondway!