Top Ways To Save Cash On Your Startup Restaurant

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Launching a restaurant is your dream. But, the potential cost can be a nightmare. To start a restaurant in the United States, you can plan to spend anywhere from $275,000 up to $425,000 or more just to open the doors according to Restaurant Engine. These numbers are typically well above new entrepreneur estimates. If you’re looking to get going but you don’t want to run out of cash your first week in business, the following tips from The Cocktail Camp can help.

Talk is cheap

So says the common expression. But talking things out through thorough planning can save you from making costly mistakes later. To illustrate, here's an example of a go to market strategy. You and your team can use this planning tool to plan out your startup from conception to execution.

Use the right payment processing

In a world where cash is king, using the wrong point-of-sale system can mean paying exorbitant non-cash adjustment fees. Point-of-sale systems like Square and Vend allow you to conveniently receive payments from customers.

Reduce your personal liabilities

If you run your business as a sole proprietor, you may be held liable if a customer is injured on your property or while eating your food. Reduce your personal financial liabilities by establishing a business structure that protects you. You can use a formation service to save you time and money. There is not a great deal of paperwork involved, and you may also avoid paying too much in taxes.

Skip the dining room

Not every dining establishment needs a fancy seating area. If your food is super casual, and you like the idea of being able to move around from one location to the next, consider renting a food truck, which will cost you somewhere between $2,000 and $3,000 per month. This will give you an opportunity to see which parts of town are most interested in your food and where you can earn the most profits.

By used equipment

During the peak of the pandemic, 17 percent, or more than 110,000 food service establishments, closed, according to Spectrum News 1. Less than half of these are expected to resume service. Take this as an opportunity to find liquidation sales online or in your local area to buy used equipment.

Hire experienced help

In addition to the availability of used equipment, the restaurant catastrophe of 2020 left many experienced chefs, servers, and maître d’s out of a job. You now have a massive pool of experienced talent to choose from. But, as IQ Partners explains, you want to pay them above the industry average. While this might sound counterintuitive, paying top-tier talent what they’re worth will likely result in better performance, less turnaround, and greater efficiency.

Go viral, DIY-style

Advertising is expensive, but, if you can do something truly unique, you can get attention through social/viral word-of-mouth. Lots of restaurants have found positive attention by simply being shared on social media for interesting or humorous happenings. Design fun and creative images for your social media pages to help get the word out. 

Avoid high-interest loans

When you’re starting a business on your own, your options are to either drain your personal savings or take out a loan. Since you still have to pay for your home and family, a loan is likely a better option. But, don’t take out a personal loan, since these are usually designed to have high fees. Instead, look to the Small Business Administration or a credit card with a 0-percent rate for the first 6 to 12 months.

Any time you open a business, there’s going to be an investment. But, you don’t have to drain everything you're worth to get up and running. There are lots of ways to keep you from a cash crunch. From buying used equipment to limiting your personal liability, your business can be run affordably and on your terms.

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