Managing Restaurant Bankruptcy Risk Factors

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Can my restaurant go bankrupt?

Can you make success out of failure, strength out of weakness, and opportunity out of chaos?

Liquidity and cash flow

The first thing you should pay attention to is shifting your focus from calculating profits and losses to the current and future liquidity that will be available to your restaurant.

Where cash flows are the most important challenge facing most restaurants.

Before the Corona crisis, your restaurant and many restaurants were recording an increase in sales and revenues, and you were seizing a good share of the market, but now, cash flow is the most important

You must have sufficient liquidity or reliable and fast sources to obtain it in order to be able to withstand until the crisis is over. You have to follow the cash flows on a daily basis. If you don't, then you are asleep, your fate is cloudy, and your face is wandering

In light of the liquidity crisis and the continued decline in demand, this climate will force you to

1- Labor reduction

2- Stop the expansion process

3- Reducing the menu

4- Reducing marketing expenses "and this is not recommended at all."

As your continuity in the market depends on reducing expenses and saving more money

Narrow the circle of your interests and limit your focus to the fixed assets that are invaluable and there is no room for neglecting them, as they are the heart of your commercial activities and the first thing for you is to redefine the sector or target group that you will continue to deal with. And even studying the nature of the consumer that will continue to be targeted

Pick the suppliers you will continue to do business with and then drop everything below that.

This method will put you on the offensive, and your humble attitude will turn into an opportunity to build a restaurant that can withstand the storm and weather it.

Any method that brings you money, use it, even delivery applications, despite their weakness or lack of profitability, but as long as they give you an excellent cash flow, take advantage of them.

finally

- If a severe storm comes, bow to it until it passes.

And remember that your money today are not the same as your money yesterday, nor are they the same money tomorrow.

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