A full restaurant can still go bankrupt
It sounds paradoxical, but it's reality: a restaurant with 80 covers per evening and happy customers can find itself unable to pay suppliers on the 15th. The problem isn't revenue — it's cash flow.
Cash flow is the difference between money coming in and money going out. A restaurant can be profitable annually but have months where outflows exceed inflows — and without liquidity in those months, you're in serious trouble. Nearly a quarter of restaurant closures are caused by liquidity problems, not lack of customers.
The restaurant payment cycle
Restaurants have a unique advantage: you collect immediately and pay later. Customers pay at the meal. Suppliers get paid in 30-60 days. Rent on the 1st. Salaries on the 27th. Tax payments quarterly.
This gap is an advantage — but also a trap. Today's cash isn't "yours": part goes to suppliers in 30 days, part to taxes in 3 months.
How to forecast cash flow
- Estimate weekly revenue from historical data
- List all fixed monthly outflows: rent, salaries, insurance, loan payments
- Estimate variable outflows: food suppliers (28-33% of revenue), maintenance, marketing
- Map the timing: know when each payment is due
- Calculate cumulative balance: if it drops below zero any week, solve it in advance
The 5 cash flow traps
1. Seasonality — Save 10-15% of strong months' revenue for weak months. 2. VAT isn't yours — Transfer net VAT monthly to a separate account. 3. Year-end bonuses and severance — Accrue monthly so you're not hit with a lump sum. 4. Emergency repairs — Keep 1-2 months of fixed costs as reserve. 5. Growing too fast — Finance growth with proper instruments, not operating cash flow.
Cash flow management tools
- Dedicated bank account: separate business from personal
- Reserve account: for VAT, bonuses, emergency fund
- Quarterly forecast: update with actual data
- Real-time dashboard: BiteBase shows current balance, upcoming payments and revenue forecasts
Managing supplier relationships
- Negotiate 30-60 day payment terms
- Pay on time for leverage when you need flexibility
- Consolidate suppliers for fewer payment dates
- Monitor due dates with BiteBase's payment calendar
When to seek financing
Seek financing proactively, not in crisis. Good reasons: revenue-generating investments, covering predictable seasonality, equipment leasing. Bad reasons: covering operating losses, paying late taxes.
Common mistakes
- Mixing personal and business accounts
- Confusing revenue with profit — €30,000 revenue doesn't mean €30,000 profit
- Not planning for tax payments — VAT, social contributions, income tax are all predictable
- Paying for investments from operating cash — Use leasing instead
FAQ
How much minimum liquidity should I keep? 1-2 months of fixed costs as reserve.
How do I handle a low-revenue month? If predicted: use your reserve. If unexpected: cut variable costs, negotiate with suppliers, consider a credit line.
Does my accountant help with cash flow? Accountants handle bookkeeping and taxes, not daily operational cash flow. That's your job (or your management software's).