First time in business and my friend and I want to start a casual dining wine bar on Sydney northern beaches. Going through financial projections and wondering what benchmark we should be using for profit margins. We have the funds to fit it out so no borrowings and another $50k to start. Any advice would be helpful?
Best to go to a local accountant, and look at a profit and loss with him,of a small dining bar, ask themif they have a similar profile client,and then understand, that there are a lot of places,which needs some cash injection, and will that 50K be enough, I am not sure.
4 Weeks Rent Bond to be paid upfront
Staff Hire and one months pay
Cost of goods
Cost of running the place
Most businesses have a gestation period, and also note that Dining Bar is a seasonal business, Winter Sales will be down, you need to have a lot more money in your pocket.
Also, you are not going to make profit till it becomes popular...it may take 6 months worth of costs of running in savings. You need to have a peace of mind, so that you can concentrate on the business of the Business.
The ATO publish standards for various industries like wages, cogs etc.
I am out at the moment but I’ll try and get you a link.
There is also a company called benchmarking.com and you can buy a industry specific report.
Don’t be constrained by other people’s benchmarks. Start with what you want tour profit to be then your wage and work backwards to create you desired sales.
When you have KPI’s and goals things are easier to achieve.
We have an office at manly. Drop in for a coffee.
Work out your overheads (fixed costs), look at your costings for produce etc. and expected number of customers per week. You can then sort out your pricing, which will give you the profit margin. Plenty of P&L and Cash Flow reports available to work with.
You can get hold of reported benchmark figures, which may give a reasonable idea of the margins applicable (range rather than specifics).
For a wine bar with casual dining, stock levels will be paramount to your success, and re-ordering etc.. Make sure you have looked into those requirements - nothing worse for a customer than for their favourite/preferred wine to be sold out. Your early reputation is soo important. Don't over-stock either (kills cash flow).
Catch-up with AJ above, or Brendan Curran (another NSW Accountant on here) for advice. I assume you have drawn up a business plan (to some level). If not, put everything else aside and get into that process. Fail to plan - plan to fail!