My Restaurant's Cash Flow is Terrible

"body">you how many restaurants never did inventory,
Restaurateurs are some of the most creativeyou'd understand all the failures. Inventory is how
people I know, I've never seen more smallyou control cash flow, if you over order, your
businesses opened on a credit card, or without amoney is tied up in something that has no value,
lot of cash. It's phenomenal to think that peoplecash is king. Proper inventory involves work, it's
can't find the money for a down payment on anot easy keeping up with your inventory on a
house, yet restaurateurs open restaurants everydaily basis. This is exactly what it takes to
day without any money in the bank. Our industrymaintain proper food and liquor costs, while
is alluring and provocative. People are throwingminimizing theft and spoilage.
their hard earned money to be part of the glamorThe old adage of taking inventory once a month
our industry is known for. Everyone wants to beis dead, you need to take a complete inventory
a big shot, or work the dining room on a busyonce a week. Imagine that you are in a seasonal
night. Friends call you, begging for a reservationbusiness, July and August are your peak months.
when you're sold out. Many of us don't haveIf you take inventory monthly and your July
college degrees, our credit cards are maxed outnumbers are way off, you won't even realize it till
and yet doctors, lawyers and engineers areprobably mid August, by that time your season is
envious of us.over and you just blew your year. Control your
The problem with our industry is, mostcash, implement systems with checks and
restaurants fail. The percentages are staggering,balances. We periodically have someone from our
yet when restaurants fail, there is alwaysoffice audit the inventory process with the Chef
someone willing to pick up the lease and open aor Restaurant Manager. How would you know if
new concept in the same location. It's completelyyour numbers were tampered with? It's important
mind blowing. I look at some restaurants and Ito recognize that inventory is cash, (your cash).
know that they won't make it before they evenYou would never leave a pile of cash out on your
open. I've spoken to many new restaurateurs andcounter, you'd put it in the bank, and then only
I can't believe the lack of experience theyafter you'd counted it. Your inventory is your
possess, or even the skill set to give themselvesrestaurant's bank account, protect it like it's all the
a fighting chance.money you have, because in a lot of instances, it
Most businesses focus on marketing, the idea is, ifis. Don't tie up your money in perishable products,
you can get enough people to come through theaudit your Chef's purchasing, give him or her
front door, you can pay your bills. This is a greatperimeters on purchasing. If you're a family
theory, the problem is, if you don't have systemsrestaurant, you don't need to purchase fresh
in place, chances are you'll blow the experiencetruffles.
and your customers will tell their friends of theirI think if Restaurateurs spent more time
bad experience and probably never return.controlling their inventory, instead of walking
Training and systems are the life blood of a wellaround the dining room or lounge, comping drinks
run restaurant, training is an entire topic all on it'sand pretending to be big shots. We'd see a
own. I want to focus on systems, specificallysignificant reduction in restaurant failures. Guard
inventory controls. Inventory is one of the mostyour inventory, count it often, protect it like it's a
important components in your business. If I toldhorde of gold, and watch your business prosper.