Collection of talks by hotel leaders spreading ideas about what is important.
How to make a budget for your restaurant?
What will you learn in this video?
If you are thinking about how to make a budget for your restaurant, then this tutorial will help you.
In this video, we will learn how to make a food and beverage budget for your restaurant in 3 simple steps.
This video will be useful for first-time managers or for experienced supervisors who want to learn how to make the budget. If you have not yet made a budget, this video will guide you through the process in a simple manner.
And if you are a pro at making budgets for your restaurant, do let me know in the comment, how you make the budget.
Ok, let’s get started. In this tutorial, we will not be making a zero-based budget. we will use the information we already have from the previous years and then make the budget. If you do not know what is a zero-based budget, click the link in the notes below and watch that tutorial.
Usually, the budget-making process will start 2 to 3 months before the financial period. So if your accounting year starts in January next year, you may begin the process of making the budget in October.
You will have actualized data on your revenue, covers, and average per cover till September. so now you will need to forecast the revenue for the next 3 months to get the estimated revenue for the current year.
Once you have that number, it becomes the base for the budget exercise.
Now on to the 2nd step. This step does not involve working with numbers at all. Your job is to identify the key factors that you think will affect your restaurant business next year.
Understand the market scenario, is the market looking up or is a slowdown coming? Look at competitors. What new things did they do during the year? If any new competition is coming up nearby, understand the threat that will pose to your business.
This stage is called understanding your strengths, weaknesses, opportunities, and threats. Once you know that, you are in a better position to plan your budget for the next year.
While making the swot also plan what will you do to make the most of each quadrant. How will you capitalize on your strengths and opportunities? What will you do about the threats and weaknesses?
If you have multiple outlets in your hotel, make sure you do this for all the outlets. This is a key step that you need to finish so that you have an idea about the market conditions.
What you do in this stage will help you form the numbers later on.
In the third step, you need to calculate the all-day dining budget.
In most hotels, you get an allocation for breakfast from rooms. That is your Average per cover for breakfast.
Also, you will need to know how many rooms are being budgeted for the year. Ask the revenue manager for that data. Once you have the rooms occupied number, multiply that by your in-house guest capture percentage.
That will give you the number of guests who will eat in the restaurant for breakfast. Multiply that by the APC and get your breakfast revenue.
If your hotel gets non-residents for breakfast, add that revenue as well.
For calculating lunch and dinner sales, you need to look at in-house guest capture in the same way you calculated breakfast.
For non-residents, you will use a combination of history and your knowledge from step 2 about the market to gauge how many covers you will do. You can also use the information from step 2 to plan strategies like food festivals or pop-up events to increase footfall into your restaurant.
Some key factors to keep in mind while planning the budget will also be your menu price revision schedule. As you increase the price, your APC will also go up thereby increasing revenue.
Your revenue may also increase with the food festival you planned for the next year in step 2.
Total up the revenue for each meal period for both residents and non-resident guests and you will get your outlet budget.
Do the same for all the other outlets, add them up and then you will get your hotel budget.
With these 3 steps, you can easily make your restaurant budget.
If you want to purchase a template to make the budget easily, click here. The template has formulas already in the sheet which will help you make the budget with ease.