The Best Ways to Avoid Restaurant Bankruptcy
Though different research has yielded varying results, it is understood that starting a restaurant is one of the most risky business moves you can make. There is a lot that goes into running a successful restaurant business, and with such a high turnaround for employees, and such a saturated marketplace, it can be difficult to distinguish yourself. When you know what problems a typical restaurant faces though, you can make a proper plan that will help ensure your survival.
Some Simply Steps To Avoid Bankruptcy
Restaurant bankruptcy can be extremely difficult to recover from, but if you do your due diligence, then you will have the best chance of not only surviving, but also thriving in your business. Some of the steps to take start with:
- Getting Your Capital In Order: Most new businesses take a significant amount of time to become profitable. To ensure you can weather the storm, you should be putting up at least 50% of the start-up capital. More important, have at least 15-20% extra money on top of your budget when you start, and make sure you can cover payroll for the first six months or longer prior to starting.
- Have A Proper Business Plan: Though some people think of a business plan as a simple strategy, it goes well beyond that. Instead, make sure you have a restaurant attorney, marketing specialist, accountant, and other professionals in place. Furthermore, regularly update your performance projections and plan accordingly.
- Build a Family: One of the greatest costs for restaurants is the turnover rate. If you can build a strong community for your employees, you can benefit from a lower turnover, and keep more of your profits.
- Monitor New Developments: Finally, make sure to keep up to date with any new laws or developments among your competitors. This will ensure you remain at the top of your game and don’t fall behind due to some new technology.
Though no one can ever guarantee success, following these steps will give your new restaurant its best chance of survival.
Taking the Steps
Since you know what steps you need to take, the next part of the process is actually following them. Even if your restaurant is already operating and you find that one or more of these have not been followed, start now. The longer you wait, the more likely you are to face the pain of bankruptcy.
Ultimately, one of the best ways to ensure you never have to worry about dealing with bankruptcy is to do the proper amount of planning ahead of time. This sort of due diligence can go a long way to protecting your restaurant, and ensure that you remain in business for years to come. When you find that you have questions about ensuring your restaurant survives through the tough times and wish to consult with a Boston restaurant attorney about restaurant bankruptcy protection, contact Lewis Sassoon of Sassoon & Cymrot for individual guidance and consultation.