You might have heard that 9 out of 10 new restaurants will fail in their first year. Yeah, well, it’s not the case.
Research done at Cornell University and Michigan State University a few years ago found that after the first year 27% of the restaurants will close; after 3 years about 50% will no longer be in business, and after five years – 60%.
After 10 years about 70% of the restaurants will no longer be in business. These are big numbers, but not as bad as 90% quoted by some television star chef.
Here are some facts about saving money when running a restaurant and why using a lease is the best way to go:
- Restaurant’s biggest expense is commercial refrigeration.
- Tablecloth maintenance is a hassle, but you have to do it. They say that a dirty tablecloth can break a restaurant. Pay attention to this detail and be ready with plenty of replacements right away.
- Bar Equipment – Coasters, napkins, plastic cups and stirrers are often given free by distributors, if you are in good standing with him.
- Catering equipment can help you in the off season. It will also help you make more by not engaging your staff or your real-estate.
- Point of Sale (POS) systems. They allow streamlining the order and payment process. Not only it helps your servers issue the bill faster, it can also collect customer data and let you see who they are and how much they spend on average.
- Unless you have a high end restaurant, where every dish is presented in an artistic way, the dishes you use should be sturdy. They have to go through many washes in hot water and are designed to withstand rough handling and heat.
- It’s costly to keep broken equipment. Items are less efficient and burn more electricity. Be vigilant in keeping and maintaining your equipment and stay on top when they need replacing.
- Preserve cash flow by leasing equipment instead of buying. Even for used equipment you pay cash and get something that is a few years old. When leasing the down payments is much lower, and you can get the latest technology out there. Some leases allow replacement or upgrade when the need arises. You are not stuck with old equipment that does not serve your needs anymore.
You can usually lease the following:
- Restaurant boots
- Ice machines
- Warming equipment
- Vending machines
- Bakery equipment
- Catering equipment
- POS systems
Think smart and be one of the 50% that did make it past the 5 years post.