6 Keys to Financial Independence for the Restaurant Business Owner

By Lidia Staron, Contributor

If you own a restaurant, then good for you! As an entrepreneur, it is your job to make sure that everything is going to run smoothly so that you will have an income earning machine. You have to strive to the point that your business gets into financial independence, meaning that you do not have to borrow money just for it to continue its operation.

But, in order for you to achieve such a status, you’re going to have to do a number of things to get to that point. Here are some steps to help you set up investment goals to help your business flourish:

1. Create Measurable Goals

 Restaurant owners should create SMART, measurable goals for their business.

There is this concept of “SMART” goals that allow you to achieve whatever it is that you set for yourself. The “M” in the word stands for “Measurable.” In order for you to achieve your goals, there has to be a way for you to quantify it. 

For instance, if your goal is to earn money in three years, that is a vague concept because you did not put an exact amount. You need a measurable goal to attain. However, if you were to say, “I will earn $1 million before I reach the age of 40”, that is something quantifiable because there is a definite figure that you’re aiming for.

It is goal-setting like this that will help you reach what you’ve desired in life; in this case, having your business reach financial independence.

2. Set Reasonable Expectations

The problem with some restaurant operators is that they set unreasonable expectations. For example, if their business only earns net profits of around $50,000 per year, do not expect to earn $1 million in the next two years. Unless something drastic happens, that is just an unattainable goal at their current position. 

What operators and owners can do, however, is set reasonable expectations. So instead of earning $1 million the next two years, set something more realistic like earning $200,000 in the next two years. It is reasonable, it is within the acceptable limits of your earning power, and it is something that is attainable in the near future.

3. Have Multiple Profit/Income Streams

 Restaurants should have multiple revenue streams available to reach financial independence.

With the rising prices of commodities and services, it is impossible to earn a lot of money using only one income stream. Therefore, you have to make it a point to have multiple sources of income if you want your restaurant to stay afloat. 

For restaurants this means looking into other ways of making money than just in-house guests. Look at delivery, carryout, or even merchandising your signature sauces.

Another avenue is personal loans. Although it gets you some money, this should only be acquired if there is a small hiccup in your business. It’s best to avoid loans whenever possible and opt for multiple income streams instead.

4. Have a Plan

Most gurus would tell you to come up with a business plan, especially if you’re going to become a future entrepreneur. A business plan gives you detailed, step-by-step instructions on what to do that will help your business take off. 

Armed with the same concept, restaurant owners should have a plan on where they want to go in life. Set goals along the way and once you’ve reached a certain goal, create new ones. This is so that your work-life will have a definite direction; a specific pathway that leads you to a prosperous and joyful career.

5. Always Keep Your Career or Business Moving Forward

 Restaurant owners should know where they want their business to go and have an exit plan for retirement.

You should always have this mindset of keeping your business and career moving forward. Money is going to be something of great importance, especially when you’re nearing your retirement age.

At some point you’ll also want to have an exit plan. Do you plan on running your restaurant until you pass away? Will you give up most control to trusted managers? Will you sell your business and retire? It’s important to know how you might want to exit the restaurant industry, so you can build that into your business plan and future business decisions.

6. Give Up the Addictions

Addictions are never a good thing. They can break you not only physically and mentally, but it can also put a hole in your pocket as well.

Funding your addictions will require you to spend a lot of money. Drug and alcohol addicts, for example, spend more than half of their earnings just to satisfy their cravings. In the long-term that would mean that you’re probably going to have some problem with your financials.

If you are having a hard time turning on a new leaf, please seek the help of a professional. Look into joining anonymous groups so you can have conversations with people who have suffered the same addictions as you have. They can help guide you to independence.

Conclusions

Your decisions can ultimately affect your financial independence. Attaining measurable goals, setting reasonable expectations, having multiple income streams, always having a plan of action, thinking of always moving forward in life with both your career and business in mind, all of this while slowly rehabilitating yourself from addictions can really help you attain the independence that you seek.

Good luck!


About the Author
Lidia Staron has been working as a writer, editor and literary coach for 5 years. She contributes articles about the role of finance in the strategic planning and decision-making process. You can find really professional insights in her writings.


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