How to Recession-Proof Your Restaurant ASAP?

Updated: Oct 26



We all hear what uncertainty means in everyday conversations. According to the consumer price index, Without Cashflow, Then Everything Else Is Irrelevant. Consumer prices are still climbing rapidly in second quarter of 2022. Inflation is possible, and people are hesitated to spend like they used to. As a business owner, what are you going to do about it? Personally, I think, it starts from where you are. This is the perfect time to look inwards.


Here's Top 6 How to Improve Your Cashflow



1. Know Your Number

As a business owner, you have to know your numbers. Manage overhead costs is essentially necessity. Business overhead costs are expenses that are related to the day-to-day running of a business. Reducing overhead costs is important in a business downturn. When business is slow, cutting overhead costs is normally one of the easiest ways to minimize losses and return your business to normality and ultimately profitability.

Business overheads which usually include

  • Your rental space, insurance and contracts.

  • Your utilities, maintenance, repairs and misc. expenses.

  • Your sales and marketing, inventory, product ordering, vendors, payroll down to your revenue streams.



Your restaurant revenues are usually coming from these areas:

  • Your daily revenue, and sales per table revenue.

  • Your bar/alcohol sales.

  • Your to-go sales, deliver services and referrals.

  • Your ability to upsells, restaurant special promotions, offers and giveaways.

  • Your online orders, reservations, walk-ins, to various traffic leads.


Again you have to know your numbers especially the different between cash inflows and cash outflows. The rule is when your restaurant's cash inflows exceed your outflows, you get positive cash flow. And certainly, this increases your business's cash account and provides money to grow your business.

“The first thing you have to know is yourself. A man who knows himself can step outside himself and watch his own reactions like an observer.”Adam Smith,The Money Game


2. Start Boosting Your Cash Flow. I Mean Now.


Can your business survive a cash crunch? In addition to monitoring your restaurant’s cash flow from week to week is necessity, but also having a Basic Fundamental Understanding of Your Cash Flow Activities is a good way to start.

Understand this, there are two main types of cash flows - cash inflows and cash outflows. However, first of all, let's simplify this cash flow concept. Your restaurant’s cash inflows usually include cash received from customers, money received from selling assets and cash obtained from financing sources. Your cash outflows for a restaurant usually consist of cash spent on operating costs, money used to buy assets and money paid to financing sources, such as dividends distributed to investors.


The basic rule is when your cash inflows exceed your outflows, you get positive cash flow. And in terns, this increases your cash account and provides money to grow your business.