If you are starting your restaurant, you need to be extra keen, especially when it comes to producing your financial plan. Restaurant business plan financial models can be useful in several aspects. They may be presented to an investor, board or used to secure a bank loan. Whatever reason you have for such, you need to make sure you have a financially sound model. If you are not confident enough to make it for yourself, seek professional assistance. Why? Because these models are crucial when it comes to decisions that affect your business. Here are some mistakes you have to avoid when coming up with one.
An ideal financial model should not be too simple. A person going through the model should find all the information they need there and should not rely on their knowledge. At the same time, it should not be too complicated that someone reading it can’t figure out what’s contained in the documents. You need to formulate it in such a way that you relay all the information there in a crafty, yet easily understandable way. Also, avoid using complex formulas- short and straightforward formulas is the way to go.
The model should be able to indicate even the slightest shifts in your business. For example, if the change in the price of an ingredient is affecting profits, do you have to adjust it manually? If yes, then you need to adjust your financial model. It should be able to indicate even the slightest of changes to ensure you have a foothold of your financials. Remember, business is about being able to detect even the smallest shifts in circumstances and highlighting/noting their effects.
Arrange the model in a way that makes it easy to understand by the readers. If required, you may create a different page for each aspect. One page could be a detailed version, while the other could be kept in simple terms. The best way to go about with this, is by creating a sheet of your financial model, and hyperlink certain texts, so readers can go straight to that link, without having to read every unnecessary detail, that they don’t particularly have to read through.
Avoid errors like formula errors. This will help you get accurate figures. You should conduct error checks regularly. You can do this by using the available automatic error checkers. Sanity checks are also essential. Sanity checks will go a long way in helping you avoid getting inflated or deflated figures, which will lead to some very costly mistakes. Also, make sure you have consistent formats like bordering, descriptions, styles, labels etc. to avoid confusing the person reading your report.
The thing about models is, as much as you want to be detailed, there are some things you surely need to avoid. One of them is hard coded numbers. In case you hard code, indicate somewhere within the document or create a key below, to avoid confusion when going through it afterwards. With this information, you can easily make your own financial models. Consult professionals for the best possible outcomes, especially if you want to run a successful and well-established restaurant.