Using Business Financing To Increase Your Restaurant’s Annual Profit
As a restaurant owner, your job description is endless. Whether it be serving customers, lending an extra hand in the kitchen on a busy night, bussing tables, or greeting guests, your plate is always full. Most business owners do not have immediate access to additional capital to take their business to the next level. Nevertheless, this should not squash your hopes and dreams of expanding your establishment.
Finding the ideal financing company to back your establishment is crucial. Whether you’re looking to expand, renovate, or purchase new equipment for your location, National Business Capital is here to show you how the right business loan can help grow your establishment while increasing your annual profit.
How The Right Financing Company Helps Your Profit
Let’s take a look of the following example: In this example our restaurant owner takes out a business loan of $50,000. They use the funds to add 10 tables & 40 chairs which costs $10,000. They install a new bar and CO2 system totaling $12,500 while adding new heating and lighting which costs $10,000. They also do $12,500 worth of structural renovations. Finally they spend $5,000 on table supplies and decor all for a grand total of $50,000. (Click the images to enlarge)
Next we will examine the loan breakdown. We already know that the restaurant owner has borrowed $50,000. The loan is for a 12 month term. Being that banks have tightened up their guidelines the business owner obtained a short term alternative financing program. These programs come with a higher rate of interest than what the bank offers. Even with the higher rate the business owner was still able to turn a significant profit.
So now let’s examine the sales increase breakdown. The below numbers are based off industry norms and we are being conservative as you will notice we are only using 5 days out of the work week. Most successful restaurants are open 7 days per week so the numbers may be even higher.
- $240 in Daily Sales for every 1 Table Added (Based upon $40 Average Ticket Per Table x 6 Daily Operating Hours)
- $240 in Daily Sales per Table x 10 Tables = $2,400 in Daily Sales
- $2,400 in Daily Sales minus 81% for Expenses (National Average) = $456 in Additional Daily Profit
- $456 in Additional Daily Profit x 5 days per week x 52 weeks =
- $118,560 in Additional Profit Annually By Adding 10 Tables
So, now our restaurant owner has $118,560 in additional annual revenue. They pay their loan back which leaves them $53,560 in added revenue for the year. We believe that most restaurant owners would agree that this deal makes sense. The below picture is a final recap of the whole scenario.
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