Part 2 of 3 - As a Restaurant Owner or Restaurant Manager Do you know how to rate your growth success? (Read Part 1.)
Last month we talked about the first of two ingredients in the secret recipe for restaurant success. Today we discover the second part of ensuring your success.
You Must Think Like An Investor
When we asked CFO’s and sophisticated investors which one of the financial statements is their favorite and the one they rely on the most, the answer came back as the third financial statement.
This tells us the number one user of the third financial statement is an investor.
As a restaurant owner or restaurant manager, you have possibly invested your life savings to open the doors of your restaurant, and your investment could be from $250K up to $1M. That is an enormous investment which puts you in the category of an investor. Since you are an investor, you must think like one.
Investors watch their money with a premeditated intent that it will grow. They ensure they have a way to know that the invested funds are on the growth track.
Before investing, they demand that it be a secure investment. For instance, if an investor fronts the money for a restaurant of a $1M or $250M, they want to know their investment is safe, that it will multiply, and that they will get a return on their investment.
Multiplication of investment is a high priority in their thinking.
Do you know that 59% of restaurants fail within three years?
With knowledge of this fact it becomes more important to think like an investor and have a plan of action for cash flow. If not, the enormous amount of startup capital will run out within six to twelve months.
Money disappears when you don’t have a plan and you operate without a third financial statement. One of the most significant contributing factors to failures of small business is poor cash flow management. 90% of small business failures are due to poor cash flow.
As an business owner who now thinks like an investor, and uses the third financial statement, you will want to discover three ideas to keep an investor mindset and position your restaurant for success.
Last month we covered the three main areas that affect your cash flow. Today we shared the importance that, as a restaurant owner or restaurant manager, you must think like an investor.
Join us next month when we unfold the three Why’s for keeping the investor mindset, positioning your restaurant for success, and answering the question, “When will I get my investment back out of my business?”