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If you don’t plan and track your restaurant budget properly, you're setting yourself up for failure.
When we developed our strategy pack for restaurant owners, we saw a lot of restaurant owners struggling with finances and planning.
They were disorganized, had no grasp of cash flow, and were drowning in financial troubles despite having substantial revenue.
Don’t let this be you—stand out and succeed.
We’ve created a small, free tool to help you get started: our Budget Tracker and Planner. Let’s turn your restaurant's finances around and set you on the path to success!
Get the budget tracker tailored for restaurants
Most restaurant owners don't know how to plan and track their budget. This spreadsheet will help you.
Example of a full budget for restaurants
Here is an example of a (very) detailed budget for a restaurant, to give you some inspiration
1. Rent and Utilities
| Item | Description | Monthly Cost | Annual Cost |
|---|---|---|---|
| Rent | Lease for restaurant space | $5,000 | $60,000 |
| Electricity | Power consumption for kitchen & dining | $800 | $9,600 |
| Water | Water usage | $200 | $2,400 |
| Gas | Gas for cooking and heating | $300 | $3,600 |
| Internet & Phone | Internet service and business phone | $150 | $1,800 |
| Waste Removal | Garbage and recycling services | $100 | $1,200 |
| Pest Control | Monthly pest control services | $50 | $600 |
| Insurance | Property and liability insurance | $500 | $6,000 |
2. Salaries & Wages
| Position | Number of Employees | Monthly Cost per Employee | Total Monthly Cost | Annual Cost |
|---|---|---|---|---|
| Head Chef | 1 | $4,000 | $4,000 | $48,000 |
| Sous Chef | 1 | $3,000 | $3,000 | $36,000 |
| Line Cooks | 2 | $2,000 | $4,000 | $48,000 |
| Dishwasher | 1 | $2,000 | $2,000 | $24,000 |
| Servers | 4 | $2,000 | $8,000 | $96,000 |
| Host/Hostess | 1 | $2,000 | $2,000 | $24,000 |
| Manager | 1 | $3,500 | $3,500 | $42,000 |
3. Food & Beverage Costs
| Item | Description | Monthly Cost | Annual Cost |
|---|---|---|---|
| Food Inventory | Fresh produce, meats, seafood, etc. | $10,000 | $120,000 |
| Beverage Inventory | Alcoholic and non-alcoholic beverages | $3,000 | $36,000 |
| Condiments & Spices | Seasonings, sauces, dressings, etc. | $500 | $6,000 |
| Cleaning Supplies | Detergents, sanitizers, etc. | $200 | $2,400 |
| Paper Goods | Napkins, paper towels, to-go containers | $300 | $3,600 |
| Kitchen Utensils | Smallwares, cutlery, and kitchen tools | $200 | $2,400 |
| Dishware & Glassware | Plates, bowls, glasses, etc. | $200 | $2,400 |
4. Marketing & Advertising
| Item | Description | Monthly Cost | Annual Cost |
|---|---|---|---|
| Online Advertising | Google Ads, Facebook Ads, etc. | $300 | $3,600 |
| Social Media Management | Managing social media accounts | $500 | $6,000 |
| Print Advertising | Flyers, posters, newspaper ads | $200 | $2,400 |
| Website Maintenance | Hosting, domain, updates | $100 | $1,200 |
| Email Marketing | Email campaigns and newsletters | $150 | $1,800 |
| Promotional Events | Special events and promotions | $200 | $2,400 |
5. Miscellaneous Expenses
| Item | Description | Monthly Cost | Annual Cost |
|---|---|---|---|
| Equipment Maintenance | Regular maintenance of kitchen equipment | $500 | $6,000 |
| Uniforms | Staff uniforms and aprons | $200 | $2,400 |
| Licenses & Permits | Health permits, liquor licenses, etc. | $100 | $1,200 |
| POS System | Point of Sale software and hardware | $150 | $1,800 |
| Contingency Fund | Emergency repairs and unexpected costs | $500 | $6,000 |
| Office Supplies | Stationery, pens, printer ink, etc. | $100 | $1,200 |
| Staff Training | Training programs and materials | $200 | $2,400 |
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What are the biggest expenses for a restaurant?
Be careful with these killers. Here are five major costs every restaurant owner needs to consider, along with some tips on how to handle them wisely.
- Food and beverage costsThese can eat up a big chunk of your budget. You’re dealing with perishables, and prices can fluctuate based on seasonality, supply chain issues, and quality. To keep these costs in check, you should focus on portion control, negotiate better prices with suppliers, and minimize waste. Finally, it's easy to overspend by buying too much or opting for high-end ingredients that don’t add enough value.
- The staff at your restaurantYour staff is your backbone, but paying for their wages, benefits, and training can be expensive. This cost is always high because you need a certain number of employees to provide good service and keep things running smoothly. You can optimize labor costs by scheduling efficiently, cross-training staff, and monitoring productivity. However, be careful not to underpay or overwork your staff, as this can lead to high turnover and poor service.
- Rent and utilities of your restaurantPrime locations come with high rent, but they can attract more customers. Utilities like electricity, gas, and water are essential but add up quickly. To optimize these costs, negotiate favorable lease terms and invest in energy-efficient appliances and lighting. Overspending often happens when you choose a location that's too big or too fancy for your needs.
- MarketingYou need to get the word out about your restaurant, but advertising can be pricey, whether it's online ads, social media campaigns, or traditional media. Optimize this expense by focusing on cost-effective methods like the ones we give in our pack. Overspending can happen if you invest in flashy campaigns without a clear return on investment.
- Kitchen equipment and maintenance costsThis includes everything from kitchen appliances to dining furniture. These are expensive because quality equipment and regular maintenance are crucial for smooth operations and customer satisfaction. Optimize by investing in durable, energy-efficient equipment and maintaining it regularly to avoid costly breakdowns. You can overspend by going for the latest high-tech gadgets you don’t really need.
How to spend less with your restaurant?
Here are practical tips to help you, as a restaurant owner, optimize your budget and manage expenses more effectively.
| Expense | Tips to Optimize |
|---|---|
| Food Costs | Partner with local farmers for fresh, seasonal produce at lower prices. |
| Labor Costs | Implement a scheduling software to optimize staff hours and reduce overtime. |
| Utilities | Install LED lighting and energy-efficient kitchen equipment. |
| Marketing | Run social media contests for your restaurant and collaborate with local influencers for free exposure. |
| Cleaning Supplies | Train staff on efficient use of cleaning supplies to reduce waste. |
| Equipment Maintenance | Set up a maintenance log for regular equipment checks and servicing. |
| Rent/Mortgage | Negotiate lease terms during renewal or consider moving to a less expensive location. |
| Insurance | Regularly review insurance policies to ensure they meet current needs and compare rates annually. |
| Packaging | Use cost-effective, eco-friendly packaging and offer discounts for customers bringing their own containers. |
| Tableware | Purchase high-quality, durable tableware that can withstand frequent use. |
| POS System | Choose a POS system that offers essential features with low transaction fees and integrates with other systems. |
| Staff Training | Conduct regular in-house training sessions and use free online resources. |
| Waste Management | Implement a food waste tracking system to minimize waste and donate excess food. |
| Technology | Invest in multi-functional kitchen appliances and utilize restaurant management software for reservations and orders. |
| Linen and Laundry | Partner with a cost-effective linen service and consider reusable napkins and tablecloths. |
| Menu Printing | Use digital menu boards or QR codes for menu access to reduce printing costs. |
| Licensing and Permits | Stay up-to-date with local regulations to avoid fines and costly renewals. |
| Transportation | Plan delivery routes to maximize efficiency and reduce fuel costs. |
| Office Supplies | Purchase supplies in bulk and go paperless where possible with digital order systems. |
| Inventory Management | Use inventory management software to track stock levels and reduce spoilage. |
| Pest Control | Schedule monthly pest control services and maintain cleanliness standards to prevent infestations. |
| Music and Entertainment | Use a streaming service for background music and host local musicians during off-peak times. |
| Uniforms | Choose durable, easy-to-clean uniforms and offer staff a stipend for maintenance instead of using an external service. |
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Expenses that are just useless for a restaurant
Yes, some expenses for your restaurants are just useless. They don't contribute to increasing revenue or improving customer experience.
| Restaurant Expense | Reason It's Useless |
|---|---|
| Expensive Decorations | Overly lavish decorations don't necessarily attract more customers and can be a drain on the budget. |
| Premium Liquor Brands | Unless you are a high-end bar, most customers are satisfied with mid-range options. |
| Excessive Menu Items | A large menu increases inventory costs and leads to more food waste. |
| High-End Equipment | Top-of-the-line kitchen equipment is not always necessary and can be cost-prohibitive. |
| Paper Advertising | Traditional paper ads often have a lower return on investment. Don’t include them in the marketing strategy of your restaurant |
| Multiple Uniform Styles | Having various uniform styles increases costs without adding significant value to the customer experience. |
| Excessive Staff | Overstaffing leads to higher labor costs without necessarily improving service quality. |
| Premium Subscription Services | Expensive subscriptions for music or magazines often go unnoticed by customers. |
| Exclusive Ingredients | Using rare ingredients can inflate costs and complicate supply chains. |
| Costly Furniture | High-end furniture is not always appreciated by customers and can be a significant expense. |
| Custom Printed Napkins | Personalized napkins are a minor detail that most customers overlook, and they can be expensive. |
| Unnecessary Software | Paying for software with features you don’t use is a waste of resources. |
| Premium Water Brands | Most customers are content with filtered tap water, making expensive bottled water unnecessary. |
| Extra Delivery Vehicles | Maintaining a larger fleet than needed increases operational costs. |
| Excessive Membership Fees | Paying for multiple industry memberships often yields little benefit. |
| Overly Frequent Renovations | Constantly updating decor and layout can be costly and disrupt operations. |
| Expensive Table Centerpieces | Elaborate centerpieces are often ignored by customers and add to the cost. |
| High-End Tableware | Luxury tableware is prone to damage and expensive to replace, often going unnoticed by customers. |
| Excessive Staff Meetings | Too many meetings can reduce productivity and increase labor costs. |
| Expensive Menu Designs | Frequently redesigning menus is costly and often unnecessary. |
| Unused Promotional Materials | Ordering more promotional items than needed leads to waste and unnecessary expense.Get our marketing budget planner template. |
| Paid Directory Listings | Many free listing options are available, making paid listings often redundant. |
| High-End Catering Equipment | Specialized catering equipment is often unnecessary and adds to costs without a proportional benefit. |
Stop working with a tight budget for your restaurant!
Managing a budget for a restaurant when funds are tight can feel like a nightmare. It's like being in a jail where any unexpected expense can drown you.
This constant pressure makes it nearly impossible to invest in growth projects, leaving you always chasing after expenses. It's a life filled with stress and sleepless nights.
Yes, you can continue down this path, scraping together pennies and barely making ends meet. But there's another part of the equation you might be overlooking. Instead of just trying to cut costs, you can focus on growing your revenue. More income means more breathing room and more money to spend.
And no, you don't necessarily have to spend money to grow. There are plenty of zero-cost initiatives and strategies that can help you increase your revenue by 10%, 20%, or more. We've detailed all of these strategies in our guides, after studying dozens of restaurants just like yours. Get them now!
Make your restaurant more profitable
We have studied the strategies of the best restaurants in the world. All their tactics are explained in our pack!
