Oct
24
Running A Restaurant In A Tough Economy – Alternative Funding Sources
Now. Here is the question: Were you ever, at any point in your life, employed in the restaurant industry? There is a 50% chance that your answer will be: “Yes.” because 50% of adults in the U.S. were, at some point in their lives, employed in the restaurant industry.
How do we know that? Well, here are the statistics -> http://www.restaurant.org/research/facts/
According to the statistics 30% of adults got their first job experience in the restaurant. Also, restaurant business employs 12.9 million which makes it one of the largest private-sector employers.
So, since restaurants, one way or another, do play an important role in our lives, let’s take a look at how restaurant owners cope with the current economic crisis.
As you probably guessed, it is anything but easy for them, these days. Especially now that we are witnessing a drastic increase of the food prices, for anything from wheat and flour to rice and corn – the prices are surging. Families are cutting down on their discretionary dining spending. In 2010 average annual expenditure on food away from home was $2,505 and even where restaurants are full, it is noted that tables are ordering not as much as before, guests tend to share an entree or an appetizer, order less expensive dishes, skip a dessert and order a glass of wine rather than the bottle. High unemployment numbers and the fact that banks are turning down restaurant owners with less then perfect credit rating pretty much draws a picture of how restaurant business are doing today. Recent “Bennigan’s”, “Steak and Ale” and “Village Inn” bankruptcies probably add to it.
It is, also, worth noting that the average American’s annual number of dinners out remained constant at 22 a year, the number of restaurants grew by 14% between 2001-2007, while in 2011 we witnessed the decline by 6,863 independent restaurants. Still, in 2012 restaurant industry recorded $632 billion in sales and this means that, even in hard times, surviving in restaurant business can be more than just surviving, it is still a profitable business for many.
Capital expenditure for equipment, expansion or remodelling are the prerequisites for survival and advancement in the restaurant business. Also, as in any business, regular daily cash-flow is of the utmost importance. Being able to cover the operating costs, cost of food and labour is more often then not, also a question of survival for the restaurant owners. Inability to upgrade equipment, hire new staff or renovate facilities may cause serious damage to restaurants. As we know, owning a restaurant is still a profitable business for many, so short cash-flow issues should not be a reason for panic or despair, especially when alternative funding solutions for restaurants are available and this is where Liberty Capital Group comes in.
For more information on financing for restaurants talk to our representative. Call (888) 511-6223 now!
Roanoke City responds to string of restaurant closures
