3 Major Financial Concerns for Restaurant Start Ups

Starting a restaurant can be an exciting and rewarding experience. However, along with the opening of a restaurant comes a number of serious financial concerns. Failing to address financial concerns for your restaurant startup can be a very costly mistake. Here are some of the top major financial concerns for restaurant start ups.


Restaurants can be held liable for things like slip and falls that result in an injury, damage to property, injuries to employees, etc. Without proper insurance coverage, liabilities could easily bankrupt a restaurant.

For this reason, it is critical for entrepreneurs in the restaurant business to make sure that they have all of the proper insurance coverage that they need. After all, in many cases, insurance is all that stands between a restaurant and complete financial disaster.

High Expenses

The expenses that it takes to run a restaurant can be very high. In fact, labor and food costs for restaurants can often account for 60-70% of gross sales. This means that start ups in the restaurant industry need to make sure that they have enough operating capital to handle all of the costs when they open their restaurants.

A failure to have enough capital to pay high expenses can quickly result in a failed restaurant. This is not want you want. So make sure you prepare for high expenses!

Bad Accounting

Restaurants often have large inventory requirements, many employees, and many transactions that take place every single day. All of these things need to be adequately kept track of by the accountant who looks after the restaurant.

Mistakes in accounting can very quickly lead to financial problems. For example, if a certain amount of money is budgeted for food costs for the week, however twice that amount is really needed, then this can cause large issues. In order to stay viable in the restaurant industry, restaurant start ups need to make sure to not neglect their accounting.

Although there are a number of serious financial risks that can accompany starting a restaurant, success can still be achieved in this industry. If you are going to open a restaurant, just make sure that you stay organized, and that you don’t neglect these major financial concerns for restaurant start ups!

Karin Jakovljevic

About the author

Karin Jakovljevic

Karin Jakovljevic is the head of marketing at Ximble, a powerful, cloud-based workforce management system, simplifying employee scheduling and time tracking for retailers, restaurants and small businesses.

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