4 Things You Must Do When Budgeting For Restaurant Repairs
One of the most important aspects of any restaurant is creating and managing an effective maintenance budget. Typically during an economic downturn, these allow you to keep an eye on how your equipment is performing and where repairs have to be made. Too many restaurant owners fail to track this properly, resulting in some sticky times that require small business loans to be taken. However, you can avoid this entirely by practicing proper budget control for maintenance and repairs.
Get an Emergency Fund Going
If you've any financial sense -- which to own a restaurant you must have! -- then you've already created an emergency fund for your personal life. Typically, this is your 'go to' fund for times of crisis -- when your car breaks down, your house needs extensive repairs or business is moving slow. You should extend this piece of financial wisdom into your business life as well, in order to create a pot of money that you can dip into should things go wrong.
Your maintenance fund should apply to all equipment and tools owned by your restaurant that may need repairing and/or replacing at some point. This includes things such as kitchen equipment, freezers and air conditioning, all the way down to the carpets and floors in your restaurant's dining area.
You can keep your repair costs at a minimum by practicing a proper maintenance schedule. Preventing problems before they occur is a much cheaper strategy than replacing damaged equipment, so make sure you're on top of everything at all times. When something does go awry, you can use your restaurant's emergency fund to fix the problem without eating in to your company's capital.
Accounting For Maintenance and Repair
As a good rule of thumb, set aside around one to three percent of your sales figures for maintenance. This is low enough that it won't affect your liquid capital, but high enough that it will accumulate into a sizable amount over a short period of time. You shouldn't pluck a random number from thin air, however. Rather, go through each item in your inventory and gauge the likelihood of problems occurring based on the component's age, quality and any warranties that may apply.
Develop a Proper Budget Strategy
If you've been in the restaurant game for a while, you'll have a good idea for things that can (and will!) go wrong. By now, you'll understand where the maintenance costs are coming from, what the common problems are and how much you have to spend to fix them. By analyzing your restaurant's financial history, you can make projections about the forthcoming year and adjust your budget accordingly.
When piecing your budget together, make sure to consider every sort of restaurant expense your company will face. Additionally, you should constantly update your budget based on the condition of your restaurant's equipment. It may seem time consuming, but carrying out regular inspections of your equipment can help reduce costs in the long run.
Another way to make your budget as flexible as possible is to draw up budgets for shorter periods of time. Rather than putting together a year-long budget in December, consider creating new budgets every three months or so, allowing you to constantly update and change your financial projections.
Using Budgeting Tools Effectively
Gone are the days when budgets were created by manually counting stock and making assumptions on the year to come. Technology has brought with a wealth of options, allowing restaurant owners to accurately predict what's coming in and out of their business.
Point-of-sale systems are great for getting an overall sense of how your business is going. These track every sale made by your business and can give detailed breakdowns on what's selling, what's not and how much stock you have left in your inventory. This allows you to keep an eye on things without manually carrying out stock takes, etc.
You can also maintain a tight repair budget by instructing your employees to take proper care of the restaurant's equipment. One of the biggest sources of maintenance costs in restaurants lies with freezers. Freezers are one of, if not the most, vital pieces of equipment in any restaurant and should be cared for accordingly. If any problems arise, then you should contact a qualified refrigeration technician who will be able to address the problem quickly and effectively. Continue to read more.