How to Utilize a Cash Advance for Your Restaurant or Bar
A cash advance can help any small business owner in a pinch. It’s a short-term loan that allows you to get cash fast and then pay it back quickly to get out of debt sooner. Restaurants and bars are prime borrowers for cash advances.
Food establishments provide an exciting opportunity for you and your community. You already have a fabulous menu and gorgeous decor, so let’s discuss your finances. Here’s a helpful breakdown of where you should allocate the money in your budget:
- Food – 25%
- Rent – 10%
- Labor – 15%
- Overhead – 20%
- Advertising – 10%
It’s wise to hold onto the remaining 20% of your budget for emergencies.
In reality, the restaurant business is a challenging industry to navigate. Making money is always a great byproduct of doing what you love, but in order to make money, you need to make sure you don’t overspend.
Many restaurants find themselves overspending in five common areas because the cost to operate a restaurant or bar is no small amount. The average cost per week hovers around $3000 per seat.
And that’s only if you don’t own the building! However, small businesses have opportunities to use additional financing to help them through difficult situations. If you find yourself overspending in these common areas, maybe a cash advance is for you.
Buying all of the equipment and appliances you need to run a commercial kitchen gets expensive very quickly. It’s easy to overspend on the biggest and the best, when you may not need it for your purposes.
Check out second-hand options or shop online and only purchase what you need now. Gently used equipment is much cheaper and still has a lot of life left. You may be able to take advantage of another nearby restaurant going out of business.
If you can’t afford to buy used, or you can’t find what you need, getting the professional equipment you need to operate your business may require some equipment financing. You can use a cash advance to help purchase equipment now and then pay it back over time.
An alternative lender can help you apply and get approved in minutes, so you have the cash you need in less than twenty-four hours. A lender with experience helping restaurants will know what you need and can get it for you quickly.
Aside from your kitchen equipment, you may need some pieces of technology to help you operate smoothly. Financial software for bookkeeping and a point of sale are essential, but you may find that you enjoy equipping your staff with the latest gadgets to take orders or allow patrons to pay at their tables.
None of this is inherently bad, but up-front costs, as well as maintenance, add up quickly. Be sure that what you purchase is essential to your business model until you can afford that little extra.
Try negotiating for the best prices to keep costs down and use a cash advance to cover the expenses that you can’t. You may not need as much extra cash as you thought, meaning you can still stay well within your monthly budget, even with the repayment terms.
Sales and Marketing
Effective marketing is no small feat. Doing market research, figuring out what’s effective, designing marketing materials, and then sending them out takes a lot of time and costs a lot of money. It’s no wonder this is one of the primary areas in which small businesses overspend.
Big advertising agencies look good on the outside. They offer high dollar contracts to distribute flashy marketing materials, claiming they can increase your awareness, traffic, and revenue. But it’s easy to spend more than your budget on something that doesn’t work like you thought it would.
You don’t need fancy marketing techniques to market your business. You can focus on some of the following areas that don’t cost as much to get some buzz going:
- Social media
- Hand out flyers on your own
TV could still be a viable source of advertising for your brand, but social media is a very close second and definitely worth your time.
If you need additional funding for marketing, a cash advance is the right choice because one big marketing push is an occasional expense. A cash advance gets you the money you need now and allows you to pay it back quickly with the proceeds you’ll get from your marketing.
Designing, decorating, and furnishing your dining room or bar room is expensive whether you are just starting out or remodeling. Expenses like this add up quickly against your tight budget. You could make decisions like choosing the chandelier or the paintings and stay away from significant renovations like moving walls.
You can deliver the same bang for your buck by making your current configuration work and focus on creating an atmosphere and an experience with paint colors, landscaping, unique upholstery, or varying lighting levels.
Use social media to find tips for designing on a budget. Also, keep in mind you may need a certain amount of reserves in case you have an emergency. When there’s a leak in the bathroom, not only do you have to fix the leak, you have to repair the ceiling, the wall, the floor, or whatever else got damaged.
A cash advance could help you when the decorating bug bites. Refresh your dining room to give your patrons a better experience and give your restaurant a makeover. Use a cash advance in an emergency when you have no choice but to replace damaged decorations.
Yes, restaurants have to have food. But that doesn’t mean you should buy food you don’t need. Make smart menu choices, don’t overbuy, and find a way to manage your food budget.
You don’t always need the most expensive food vendor. Local farms and co-ops give you affordable choices and help you build relationships with suppliers so you can work with them to lock in prices.
You can also streamline purchasing by reducing the number of menu offerings you have. This not only helps pare down purchasing but could make your kitchen more efficient, saving money in fewer employees and creating higher table turnover.
Pay attention to portion sizes as well. You may be able to reduce portion size and leave the cost of the item alone, raising your profit margin. However, if you still find you need a little extra cash, a cash advance could get you through until the next big rush.
While restaurants and bars have a multitude of expenses, you should still do your best to stick to a budget and save money where you can. However, even if you have excellent budgeting and future planning, you may still need help.
Quick Loans Direct offers cash advances to food establishments that need funding quickly. Fast applications and same day funding could get you into the cash advance you need now, even if you don’t think you qualify.