Your business may be doing well right now.


But when you stop to think about it, it’s perfectly sensible to assume your business will be affected by circumstances beyond your control from time to time – world events, disasters, change in seasons, competitors, road construction, the economy, and so on.

More than likely, you’re optimistic about your future in business. Most entrepreneurs are. But if you don’t temper your enthusiasm with realism, you could be blindsided by an unfortunate turn of events.

Therefore, you need to save for a rainy day and be prepared for unexpected expenses. If you aren’t proactive in anticipating issues, your business could end up folding.

Here are several reasons why even restaurants need to save for a rainy day.


You launch your restaurant with the best people you can find. And, they’re going to be with you forever, right?

Well, per Nation’s Restaurant News, hospitality turnover rose to 72.1% in 2015. You would be naïve to assume that you’ll go unaffected, even if you have the best training, systems, and incentives in place for your workers.

Replacing employees and training new hires is expensive. And entrepreneurs aren’t always aware of the resources required to onboard new team members and prepare them for what’s ahead.

If you do cut corners, know that your customer service will suffer. Unfortunately, even if you serve one of the best burgers in town, if the quality of your service is poor, some of your customers will happily settle for a slightly lesser burger if they can get proper care and attention at a different location.

Customer expectations are changing fast. Can you keep up?

Permits & Licenses

Obtaining permits and licenses can add up. Requirements are different from one municipality to another, but it’s best not to assume you’ll be able to get away with “just the minimum.” Standards are getting stricter, and getting permits is often time-consuming.

If you need to construct or renovate your restaurant, the ongoing costs will continue to mount until the day you can open for business. Typically, business owners have no money coming in until opening day If you don’t have a little extra cash set aside, permits and licenses could run you into the ground – fast.

And, as requirements continue to change, you may need to obtain additional licenses and permits, even as you’re getting your business off the ground.

There’s a good chance you’ll also need music licenses, which can cost around $1,000 per year, according to Nerd Wallet. You risk getting fined or sued if you don’t have your paperwork in order.

Hidden Costs Of Food

Again, you’ll launch your eatery with the best of intentions. But this does not mean that your menu isn’t liable to change, especially in the early stages. There’s a good chance you will be making some tweaks based on the preferences of your customers. And, perhaps two or three years down the line, you’ll be making some changes again so you can keep your menu options fresh and relevant to your customers.

Additionally, certain menu items have other costs associated with them. Think of a steak sandwich. The steak isn’t the only cost involved – you must account for the bun, the sides that go along with the dish, napkin usage, condiments, and the like.

Some business owners are caught off guard by these added costs. You must take a more holistic view of everything that goes onto a dish and how your customers will be consuming certain menu items.


Other common unforeseen costs for restauranteurs include construction hiccups, digital and print branding assets (like menus, logos, or your website, which may need to be updated periodically), insurance and damage deposits, demands from the chefs, changes in the kitchen, and the like.

From this we can see that saving for a rainy day isn’t just wisdom passed on from one generation to the next. In the restaurant business, it’s essential for your survival.