Question

explain how the planning and budgeting process works (or should work) in the restaurant industry

Answer 1

The budget planning is very important in the restaurant industry. A restaurant budget can be defined as a financial limit that helps the business to determine to be sustainable and is healthy. In the process the main goal in the budget planning should be to reach the maximum potential for the revenue and eliminate over spending and waste. A good budget plan assists in eliminating the over-spending on materials and leverages such as alcohol, food, and janitorial supplies as well as administrative expenses like the payroll and advertising.

The main steps in the process are:

-- Define the costs in restaurant: The initial step of how to manage finances in restaurant is to know the business expenses such as food, liquor, beverages, marketing and labor supplies

-- Calculate the restaurant’s costs: The computation of the restaurant’s costs in such a precise approach can assist to determine what adjustments need to be made when looking back at the figures at the end of each month.

-- Use restaurant sales forecasting: The expense evaluation at the end of each month is important and similarly the restaurant sales forecasting.

-- Track your restaurant’s sales: The forecasting and track of the restaurant’s sales can help in finding the deviations

-- Measure your sales against your costs: If there are deviations, it is important to take the necessary measures to boost the sales higher than the costs.

-- Optimize restaurant finance management: The budget should aim at increasing the revenue, and decreasing the expenses

-- Maintain healthy restaurant cash management: A healthy cash management has been useful and significant to maintain a stable, consistent and profitable business.