Congratulations, you're open! After weeks of long hours, painters, plumbers and an army of trades, you have customers. The feedback is good, and there are even positive reviews on Facebook. When you're not greeting guests, running to the markets or spending a few hours with family, you're aware that the bank account is not in good shape.
This is the classic opening squeeze, between low income and unexpectedly high costs. You need 'working capital' - a term that you've heard, but it didn't mean much until you were caught in this situation.
So what type of costs appear unexpectedly?
- The great chef you employed turned out to be... not so great. Did not turn up on the third day, and now you've employed expensive agency chefs while you find another one. Recruiting good kitchen staff is a skill that every operator has to learn, and openings rarely go as planned.
- The gun barista you hired is friendly, but inefficient - you're taking a hit on morning trade because of slow service. A replacement is hard to find, and a hoped-for early surge has been missed.
- The 2-group Coffee Machine is clearly not adequate for the busy times – a 3-group machine and a second grinder are needed to serve all the customers.
- Opening took a week longer than expected, because of kitchen equipment delays. Six valuable staff doing nothing on full wages.
- The second-hand display fridge was making strange noises - the solution was a $1500 new motor.
- Word-of-mouth promotion hasn't worked as planned - a month of punchy Facebook ads and letterbox promotions are urgently needed. A couple of months of PR support would also make a big difference.
- The pots and pans you bought for the kitchen are way fewer than needed, so there needs to be an expensive trip to the kitchen supply company.
- You discover that the exhaust canopy and ductwork has not been cleaned for years, creating a potential fire trap. Cleaning cost $1500+
- Toilets have backed up from an unmentionable blockage. Plumber costs $1200.
- A visit from the Health Inspector pings you for wrongly-installed basins and wall tiles - fixing these will mean down-time and money.
When you open a new business you need to spend on promotion, good service and quality product. This is not the time to economise. How can you find an extra cash to get through the first lean months and operate without stress?
The best-made cafe and restaurant plans usually cost way more than expected, especially if it's your first venture.
You've done the spreadsheets, bought equipment carefully, and negotiated hard with the suppliers. And you still end up short or cash for those critical early weeks, when promotion has to be maximised and the doors are still closed.
Don't panic, Silver Chef's Buy Back program can repurchase and finance new equipment that you've purchased in the last 6 months, releasing funds and saving you from cashflow nightmares. Your situation here is not unusual, and flexible funding means you can make the first months of business as good as your vision, without cutting corners. Call Silver Chef on 1300 844 054 to find out more, or message us here