Pay Attention to Unexpected Costs When Starting a Restaurant Business
The restaurant is one business that has the potential to not die with time. But, to start a restaurant business, you don’t just make a delicious menu or provide a comfortable place. There are many things you need to consider. One of them and the most important is the budget.
A budget plan can help you to find out the capital you have, estimate the total expenses, to predict the profits that will be obtained.
What are some unexpected costs that you might face?
Fixed costs such as rent, electricity, water, and employee salaries, have become a definite concern in a budget. However, there are unexpected costs that are often overlooked. Unexpected costs can arise due to economic uncertainty, politics, and natural disasters. Using a cash advance from the bank or any lender can help certainly help you when something like this happens. The importance of planning for unexpected costs is to avoid losses that may come. Here we summarize some unexpected costs that you should consider in your budget plan.
1. Operational Cost
Operations include various technologies and certifications to support your restaurant’s administrative and operational activities. For example, such as the POS system (point of sale system) for payment purposes, internet network, legal services for BPOM (Food and Drug Supervisory Agency) certification, halal certification, and so on. Certifications or licenses are sometimes needed to prove that your business is safe and credible to the public.
2. Insurance Fee
Before buying or renting your premises, check with your insurance company about property insurance. Don’t wait until you sign the contract to find out the insurance costs are very high. If your building has a history of problems or is in a high-crime area, you’re more likely to pay more.
You will also need a comprehensive insurance plan to reduce insurance risk for yourself and your restaurant. You may face at least one unforeseen lawsuit, so make sure you’re covered. The unexpected expense of paying lawsuits can destroy your reputation and business. Even if your business is free from any faults, you will still have to face expensive legal fees. Some examples of lawsuits can include:
- Burns caused by too hot coffee,
- Robbery in a dimly lit parking lot,
- Bad ratings of your employees,
- and others.
3. Cost of Basic Materials
Even though you have made careful planning regarding food prices and so on, it is undeniable that the prices of basic commodities are fluctuating variables. Factors such as the price situation abroad and the dollar exchange rate, climatic conditions, distribution and speculation factors greatly influence the fluctuations in the price of basic commodities. Therefore, it is important to keep filling in for unexpected costs which include the cost of increasing the price of basic commodities. This needs to be done so that you can adjust your selling price and profits later even if there is an increase or decrease in the price of basic commodities.
4. Reconstruction and Decoration Costs
Before opening a restaurant, of course you have to think about how the appearance of your place of business can attract the attention of customers. Therefore, the cost of reconstruction and decoration is one thing that you should not miss in the calculation. The costs involved are certainly not small and many things can happen before, during, and even after reconstruction. For example, when the material used turns out to be of poor quality so it must be replaced.
5. Marketing Cost
Marketing for restaurants is now more than just billboards and banners, it also takes effort from digital marketing to attract customers’ attention. The application of digital marketing also increases the presence and proximity of your restaurant brand to potential customers. The costs required for marketing yourself are not small and vary greatly, for that you have to decide whether to take care of marketing independently or in-house or through agency services.
6. Repair and Maintenance Cost
Every kitchen equipment and physical building will certainly have a time limit before finally needing to be repaired. If at the time of opening your kitchen equipment you have problems, it’s a good idea to have an unexpected cost plan to overcome them. Because not infrequently the cost of repairing and maintaining both kitchen equipment and the restaurant building itself costs a lot of money.
Unexpected expenses are very important to plan in your budget before opening a restaurant. Therefore, you can start to identify what costs you will need in unexpected costs. This is important so that you can make anticipatory steps to minimize risks when starting to open a restaurant.