Changing the Working Capital Requirement of Your Restaurant Business

May 7, 2010 - PRLog -- Take a few hours and add up all of the expenses you have to cover in order to effectively run your restaurant. Include rent, leases, mortgages, payroll, food costs, paper costs, taxes, utility payments, equipment repairs, insurance, and anything else that you’ve either written a check for or paid out of the register. The number you come up with is your working capital requirement and you can use it to plan the next step for your business or to monitor your current steps to make sure you’re making a profit.http://www.ibank.com/small_business_loans/working_capital_loan.cfm

Many restaurant owners hit a down slope in the past two years and reached out to working capital lenders to help them keep their eating and drinking establishments open. The very first question that a lender has in a situation like that is about the business working capital requirement. If the applicant is unable to answer that question the likelihood of getting a loan goes down. How can you borrow money to put into a business that is losing money when you don’t have any idea how much it costs you to run that business? It sounds like common sense but you’d be surprised how many business owners don’t have a clue what they’re spending.
http://wallstreetblips.dailyradar.com/blog/how_to_get_sba...

Understanding how much money you need to run a business can allow you to make cuts and raise prices to balance out any losses you might be taking. This process isn’t simple and often you will need to apply for some kind of working capital financing to save your ailing restaurant but at least you’ll know what you need to spend it on. The reason why so many restaurants fail in their early years is because the owners don’t look at the entire picture before they seek initial or additional financing. http://www.mybloglog.com/buzz/members/sba-loans-how-to-ge...

Knowing your business is the only way to achieve success in any industry. There are so many unexpected expenses in the restaurant business that it is imperative to know what your standard costs are. It’s a complicated picture with a lot of variables, but once you have it figured out you have a pretty good shot at making your restaurant thrive and grow while others struggle and falter. All you need to do to achieve this is do the math. Add up your debits and credits and make changes where you’re losing money.

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Learn About SBA Loans and how to get SBA funding and How to get SBA financing for your small business.