More than half the restaurants that open fail in their first two years of service. This is a known fact in the restaurant industry and one of the main reasons the industry is so feared by new entrepreneurs. While its is true that restaurant space is ruthless, there are still those who open up and not just survive the business but also lead the industry. The main reason that enable some new restaurant to survive and grow is that the owners are more focus on their financial management, and doing so in the right way. It may interest you to note that most restaurants lack an excellent financial management system. Usually, first time restaurateurs are more focused on arranging the capital for opening a restaurant, that they forget about the working capital, that is, the money that would sustain the business, until the restaurant business reaches its break even and start generating profits. Its very important that owners must understand and also study the type of restaurant that they want to start with because every restaurant types can be determined by the time of reaching the break- even point.

One thing that every restaurant manager must watch carefully is that they should not spend more than what they receive, in such case the cash-flow of the organization must be manage very well to always ensure that there is consistent cash-flow that will help in the operation of the business. The employees of the restaurant are the key people in helping the business reach a profitable level meaning that employing competent employees and paying them well will mean that you have credible work force who are ready to work hard to ensure the growth of the business. There are a very important things you also need to be taken into account, that is the fixed cost and variable cost of the restaurant, its good you work to ensure that cost are manage to the lowest level.