Making a Budget Proposal Restaurant Cafe Bakery: What Should Be Included
Do you intend to build your own restaurant café bakery? If you do, you will need a proposal to attract potential lenders or investors. What you should know is that potential lenders or investors are more attracted to your financial projections rather than your restaurant concept. So, having a good budget proposal restaurant cafe bakery is very important.
The Budget Part of the Proposal
A proposal budget and a project budget is quite similar. The difference between the two is that the former is a projection or expectation while the latter is a guide that must be followed through until the project is finished. While it is ‘only’ a projection or expectation, you should try to make it as realistic as possible.
Factors That Should Be Included
There are four important factors that you should include in your budget proposal restaurant cafe bakery. These four factors are income statements, cash flow projections, balance sheets, and breakeven analysis.
1. Income Statements
At this part, you should present the projected incomes, expenses as well as profits. Creating monthly basis income statements for at least the first year is a good start for a startup restaurant.
2. Cash Flow Projections
This part should show the expected cash revenues as well as disbursements for expenses. The cast flow projections should demonstrate your ability to manage cash flow and show a good credit risk, which is very important.
3. Balance Sheet
The balance sheet is basically a summary of liabilities, assets, and equity of your restaurant at a given period. For a startup restaurant, the period should be at the time the business opens. Unless your restaurant is an incorporated business, factors like income tax, medical, pensions, etc. are not applicable.
4. Breakeven Analysis
The last one is a breakeven analysis. This part should demonstrate to potential lenders or investors the minimum amount of sales needed for your restaurant to make a profit.
A Good Rule to Follow
The budget part is perhaps the most important part of the proposal. If your business is new, it is basically a forecast for your business. Here’s a good rule to follow: overestimate your expenses and underestimate your income.
Since the budget proposal restaurant cafe bakery is very important to gain support from potential lenders or investors, you need to make it as good as possible. The above should help you to create a good proposal. Be realistic with the numbers, be clear and detailed, and be professional. We hope this article helps. Good luck!