Checklist: Preparing for a successful restaurant rebuild
The following financial checklist will guide restaurants
as they adjust to operating under new circumstances.
1. Comprehensive financial data
It’s vital for restaurant owners to maintain timely and precise financial data.
Consider the following:
Maintain accurate, timely, and current books
o Monthly, even weekly reports will be key in accessing government
funding, managing cash flow, and pivoting operations.
Evaluate how operational changes will impact finances
Based on cash flow analysis, review how much staff should be rehired or
retained. Involve advisors, including your accountant, banker, and investors
in developing forecasts, considering:
o Capacity constraints
o 3, 6, or 12 month forecasts in anticipating future cash flows
o Deferred payments coming due, such as taxes, rent, royalties, and loan payments
o Ability to take advantage or extend vendor payment terms
o Options for covering shortfalls
Sample Cash Analysis
The restaurant in this example experienced a loss of sales in April due to COVID-19. The owners pivoted their strategy quickly and were able to increase sales as customers grew tired of cooking at home. Third party delivery apps are taking a large portion of sales (15%), which arguably could increase to 20%.
Despite a strong increase in sales while taking advantage of government wage subsidies and GST/HST deferrals, payment requirements will burn cash with deferrals coming due in June and result in a negative cash position in July. This is despite significant increases in sales each and every month.
April
10,000
100,000
33,000
30,000
15,000
12,000
8,000
2,500
2,000
3,500
2,000
3,000
4,000
-13,000
13,000
15,000
40,000
40,000
50,000
33%
30%
15%
12%
8%
3%
2%
4%
2%
3%
4%
-13%
13%
15%
40%
40%
50%
May
50,000
115,000
37,950
34,500
17,250
13,800
9,200
2,500
2,000
3,500
2,000
3,000
4,000
-14,950
14,950
16,000
-
1,300
51,300
33%
30%
15%
12%
8%
2%
2%
3%
2%
3%
3%
-13%
13%
14%
0%
1%
51%
June
51,300
130,000
42,900
39,000
19,500
15,600
10,400
2,500
2,000
3,500
2,000
3,000
4,000
-16,900
-27,950
17,000
-
-42,250
9,050
33%
30%
15%
12%
8%
2%
2%
3%
2%
2%
3%
-13%
-22%
13%
0%
-33%
9%
July
9,050
145,000
47,850
43,500
21,750
17,400
11,600
2,500
2,000
3,500
2,000
3,000
4,000
-18,850
-
-
-
-32,950
-23,900
33%
30%
15%
12%
8%
2%
1%
2%
1%
2%
3%
-13%
0%
0%
0%
-23%
-16%
Opening Cash
Operating Inflows:
Sales Deposits
Operating Outflows:
Labour Costs
Food and Beverage Purchases
Third party delivery app fees
Rent
Royalty and Ad Fund Payments
Equipment Leases
Repairs and maintenance
Supplies
Advertising
Utilities
Other
Other Items:
GST/HST on Sales
Deferred Amount (GST/HST)
Wage Subsidies Received (CEWS)
Canada Emergency Business Account (CEBA)
Net change in cash
Closing Cash
2. Staffing
How will you adjust staffing levels accordingly as you rebuild? Staffing is traditionally one of the major costs to a franchise restaurant’s operations. Ensure you are optimizing as you rebuild:
Based on cash flow analysis, analyze how much staff you should rehire or retain
Based on changes in traffic patterns, as you rebuild, prepare a plan for
tackling fluctuations
Develop a communication plan for your staff
Update your policies and procedures to ensure the safety of staff
and patrons
Ensure you can manage payroll properly with ongoing changes
3. Inventory
Restaurants should track and review inventory levels on a frequent basis. Regularly conduct the following checks:
Review inventory levels
Analyze and re-negotiate payment terms and lead-time with suppliers
Re-assess inventory levels and consider paring back menu items to adjust
inventory requirements as you rebuild
Project anticipated sales of inventory items
4. Operations & Technology
While you may have pivoted some of your operations, you need to consider how you will operate going forward:
Consider whether you will maintain any operational additions, such as
grocery or delivery
Key steps and systems needed to rebuild (supply chains, staff, etc.)
have been established
Leverage technology, if possible
Continue relationship with food delivery service providers
(Uber Eats, DoorDash)
The following financial checklist will guide restaurants as they adjust to operating
under new circumstances.
Checklist: Preparing for a successful restaurant rebuild
1. Comprehensive financial data
It’s vital for restaurant owners to maintain timely and precise financial data. Consider the following:
Based on cash flow analysis, review how much staff should be rehired or
retained. Involve advisors, including your accountant, banker, and investors
in developing forecasts, considering:
- Capacity constraints
- 3, 6, or 12 month forecasts in anticipating future cash flows
- Deferred payments coming due, such as taxes, rent, royalties, and loan payments
- Ability to take advantage or extend vendor payment terms
- Options for covering shortfalls
Ensure financial data is accurate and can be used to drive important decisions
Maintain accurate, timely, and current books
- Monthly, even weekly reports will be
key in accessing government funding, managing cash flow, and pivoting operations.
Evaluate how operational changes will
impact finances
The restaurant in this example experienced a loss of sales in April due to COVID-19. The owners pivoted their strategy quickly and were able to increase sales as customers grew tired of cooking at home. Third party delivery apps are taking a large portion of sales (15%), which arguably could increase to 20%.
Despite a strong increases in sales while taking advantage of government wage subsidies and GST/HST deferrals, payment requirements will burn cash with deferrals coming due in June and result in a negative cash position in July. This is despite significant increases in sales each and every month.
Sample Cash Analysis
2. Staffing
How will you adjust staffing levels
accordingly as you rebuild? Staffing is traditionally one of the major costs to a franchise restaurant’s operations. Ensure
you are optimizing as you rebuild:
Ensure you can manage payroll properly with ongoing changes
Update your policies and procedures to ensure the safety of staff and patrons
Develop a communication plan for your staff
Based on changes in traffic patterns, as you rebuild, prepare a plan for tackling fluctuations
Based on cash flow analysis, analyze how
much staff you should rehire or retain
3. Inventory
Project anticipated sales of inventory items
Re-assess inventory levels and consider
paring back menu items to adjust inventory requirements as you rebuild
Analyze and re-negotiate payment terms
and lead-time with suppliers
Review inventory levels
Restaurants should track and review
inventory levels on a frequent basis.
Regularly conduct the following checks:
4. Operations & Technology
Continue relationship with food delivery
service providers (Uber Eats, DoorDash)
Leverage technology, if possible
Key steps and systems needed to
rebuild (supply chains, staff, etc.)
have been established
Consider whether you will maintain any operational additions, such as grocery
or delivery
While you may have pivoted some of your operations, you need to consider how you
will operate going forward: