Now we have come to the last page in the restaurant business plan financials example. This is the startup costs page or even into the final bits of data to complete your calculations.
The first boxes where you enter either the cost of the business if you’re buying it for a franchise fee if you’re buying into a franchise. In the next two boxes if you are buying the land and/or the building the building you would enter the numbers here.
The next box is for the cost of the beginning inventory. This will typically be more than what you would normally carry because you’re going to have to buy at least one of everything to get started even though some of these things it will take you months to go through.
Keep in mind however that this number does not and should not be a really big one because most vendors will supply you with deliveries several times a week and stocking inventory costs money and take space therefore there is no advantage in having more on hand and you absolutely need to make sure you never run out of anything in any given day.
The next box is for the sum total of any deposits the must put down to get started. This usually includes a lease deposit and sometimes deposits for utilities and other requirements. Unfortunately this money is tied up sometimes indefinitely but that is one of the costs of doing business you have to account for.
The last box is for the cost of a liquor license whether it is new one we are transferring from an existing business with the business you are buying. Typically this cost is significantly more than the cost of renewing.
the rest of the boxes will fill in automatically and then total up to tell you exactly how much it will cost you to get the doors of your restaurant open and also the cost of operating a restaurant until he reached the break even point. The break even point is where your restaurant is making at least enough money to pay all of its monthly expenses. Until you reach this point you must make up the difference between sales and expenses and if you fail to account for this money you’ll end up going out of business soon after you’ve gotten started.
The last numbers show the cushion if any between what it will cost you start and reach the break even point and how much funding you actually have.
Once you have gone through this one-time I suggest you save your results and then go back through and start making adjustments each of which you can save a separate files. This way you can come up with difference in our house and test to see how different changes in your numbers affect the bottom line and the amount of money you need to start.
For example: going from buying your equipment to leasing your equipment can significantly reduce the amount of money that you need to start. You can also quickly see things such as what the top amount it makes sense to pay for your lease is and how much more sales you will need to cover your loan payments and so on.
Every number is easy to test and by testing it on paper you can quickly establish what you’ll need to do in the real world without having to learn the hard way with actual cash on the line.