From my own experience at Fourleaf, I found interesting information that makes a success to restaurant such as using high quality materials and providing excellent customer service. This is also including decoration and using quality stuff in the restaurants such as plates, utensils and glasses. The majority of restaurants does not create or have all of these things at once when the restaurants are newly opened. However, it is more like an investment, which the restaurants will need to constantly upgrade its overall quality.
Have you ever walked in to a restaurant where you found various materials and tools were worn-out and lacked of maintenance? On the other hand, you visited another restaurant where it looked super clean and highly maintained. Which restaurant do you think you will choose to visit next time?
Financial management is an important key to run a restaurant business. If you have a big fund for investment, you are a very lucky person from the start to invest in all kinds of high quality materials for your customers. However, if you are the opposite from that person, there must be a gradual upgrade on your existing restaurant to improve such as increasing fund and adding more materials to your restaurant for the better. For instance, you could upgrade your restaurant by adding another kitchen to help speeding up cooking process or expanding seating tables, as well as, changing tools or utensils in the restaurants for the better quality ones. In this case, the customers will always have a perception of your restaurant for actively developing or improving.
Many restaurants aim to focus on making profits and compensation. Some restaurants may even forget that the customers also demand their own compensation and values in return. Most of the successful restaurants that I have observed and associated, they are likely to never stop improving their restaurants since the first day of its operation. There is always development process in these successful restaurants.
There are many ways to upgrade your restaurant. I will give you a visual example – a restaurant bought a new coffee machine, which is better at improving coffee taste; or a new high power cooker hood that can improve smell and environment of the restaurant. Another example to see is when some restaurants may buy an air filter in order to freshen up the atmosphere in the restaurants or change customers’ chairs for the ones that are more comfortable to sit. This additional investment can be seen as act of economization in a long term.
This is the restaurant upgrade we are talking about. It is a way to give values back to the customers. I can assure you that the customers will feel the values that given to them especially those regular customers. Some restaurant owners may completely forget that in order to develop the restaurant, it needs to invest with certain amount of fund. If you have not planned or prepared for the investment, it would be make the situation more difficult when you need to use it. Nevertheless, in this article, I would like to talk about 2 methods to increase your fund for your future restaurant development.
The restaurant upgrade can be done in these two methods as follows.
1. Selling shares to increase fund
2. Saving up money for investment on restaurant expansion
Selling Shares to Increase Fund
It is a popular way that many restaurants are approaching. Once a restaurant has operated for a certain period of time and has gained credibility, as well as, reputation, it is likely to attract investors. What you can do in this case is, increase registered capital and receive money coming in from the investors. Overall, the value of shares will depend on mutual agreement on how much the shares will be sold and bought. An advantage of this method is you can still go on with the process even when your business does not have adequate money circulation or profits. This is due to some investors pay more attention on the popularity or the brand of the restaurant rather than its actual financial performance. These investors usually believe that they have the right to oversee the restaurant’s direction and operation. This is definitely a disadvantage in terms of losing control over ownership of the restaurant. However, the restaurant may have a good investor who can cooperate and increase a business opportunity, as well. With this reason, this method is very popular among many restaurants in terms of quick expansion and upgrade.
Saving Up Money for Investment on Restaurant Expansion
This second method can effectively work with a reputable restaurant or the one that has adequate money circulation and profits. Usually this type of restaurant can survive on its own. For instance, a restaurant with high profits has a manager who always saves up a certain amount of money for future investment to repeatedly develop the restaurant all the time. An advantage of the method is that you still have full control over ownership of the restaurant. Furthermore, you have the full right to oversee and manage the restaurant. However, this method may slow down the process of the restaurant expansion or upgrade. At the same time, the compensation that you will receive will not be shared with any shareholders.
Based on your regular financial plan on monthly expense, wage and compensation, you may want to consider adding another category such as fund for future investment. You have to calculate to see how many percent you can divide from the profits. For instance, a restaurant can save up their fund for future investment on restaurant upgrade at 5% monthly based on its profits. You can make a goal that every six-month, you will use that money for investment. Another goal you can make is, after 12 months, you will invest on expanding the area of the restaurant by adding a kitchen and spending the money for other restaurant upgrades.
There are different advantages of both methods on upgrading your restaurant. However, both methods aim to perpetually develop your business. Hence, this is a tip to have the customers wanting to visit your restaurant again and again or lead you to expand you restaurant in a new location for new target customers.
– A restaurant upgrade is an act of returning values back to customers
– It helps making your regular customers feel that your restaurant constantly developing and improving its overall quality
– There are sources of fund by either increasing or saving it