Think of cash flow forecasting like planning a dinner service—you need ingredients prepped before guests arrive. For restaurants, you've got major expenses like rent, staff, and inventory hitting your account before any revenue flows in. Skip this planning and you'll find yourself profitable on paper but scrambling to pay bills.
What is a cash flow forecast?
A cash flow forecast maps out all your income and expenses month by month. Unlike a standard budget, you're tracking timing—not just amounts.
Restaurants need this more than most businesses because:
- You pay rent and staff regardless of covers served
- You purchase inventory before selling it
- Seasonal swings create feast-or-famine cycles
- Equipment failures hit without warning
Planning income
Start with realistic monthly revenue projections. Factor in:
💡 Example revenue planning:
Bistro with 40 seats, open 6 days weekly:
- Average 25 covers daily
- Average check: €32.50
- Monthly: 25 × 6 × 4.3 = 645 covers
- Revenue: 645 × €32.50 = €20,963
Monthly revenue: €21,000
- Seasonal patterns: December might jump 30%, January could drop 40%
- Vacation periods: Summer slowdowns vary by location
- Special events: Mother's Day and Valentine's create revenue spikes
- Ramp-up phase: New restaurants build slowly
Fixed costs per month
These expenses hit regardless of how busy you are:
- Rent: Usually your largest line item
- Payroll: Base salaries plus payroll taxes
- Insurance: General liability, property, workers' comp
- Utilities: Baseline gas, electric, water consumption
- Technology: POS systems, internet, phone service
- Equipment depreciation: Kitchen gear, furniture
- Professional services: Accounting, legal fees
💡 Example fixed costs:
- Rent: €3,500
- Core staff: €8,000
- Insurance: €400
- Base utilities: €600
- Other fixed: €500
Total fixed costs: €13,000
Calculating variable costs
These fluctuate with your sales volume:
- Food purchases: Typically 28-35% of revenue
- Hourly labor: Extra servers and kitchen help during rushes
- Variable utilities: More cooking equals higher gas bills
- Cleaning supplies: Busier nights mean more dishes
- Disposables: Napkins, takeout containers, cleaning materials
⚠️ Note:
Express variable costs as revenue percentages. At €21,000 revenue with 32% food cost, you'll spend €6,720 on ingredients—not a fixed €6,000.
Building in a cash flow buffer
Smart operators plan for surprises:
- Equipment failures: Walk-in coolers, ovens, dishwashers break down
- Slow seasons: Revenue dips require cash reserves
- Supplier terms: Some vendors demand payment upfront
- Tax obligations: Quarterly VAT and annual income taxes
- Emergency repairs: Plumbing, HVAC, pest control issues
💡 Buffer rule of thumb:
Maintain 2-3 months of fixed costs in reserves.
With €13,000 monthly fixed costs = €26,000-€39,000 minimum account balance.
Monthly monitoring
Cash flow forecasting isn't a set-it-and-forget-it task. Review monthly:
- Revenue variance: How far off were your projections?
- Surprise expenses: Did equipment break or repairs pop up?
- Payment timing: Are you current with suppliers or falling behind?
- Account balance: Are you maintaining your minimum buffer?
A pattern we see repeatedly in restaurant financials is this: operators who track daily revenue and costs can pivot faster than those checking numbers monthly. Real-time tracking shows performance so you can adjust your forecast before cash gets tight.
How do you set up a cash flow forecast? (step by step)
Calculate your monthly revenue forecast
Estimate realistic revenue per month. Use: average covers × average bill × working days. Take into account seasons and startup period.
List all fixed costs
Create an overview of costs you always have: rent, fixed staff, insurance, energy (base), phone, depreciation. These are the same regardless of your revenue.
Calculate variable costs as a percentage
Determine food cost (28-35%), extra staff, extra energy and other costs as a percentage of revenue. At lower revenue these costs are also lower.
Plan your cash flow buffer
Calculate at least 2-3 months of fixed costs as a buffer. This covers unexpected expenses, seasonal dips and tax payments.
Monitor monthly and adjust
Compare actual figures with your forecast. If there are major deviations adjust the coming months or take action.
✨ Pro tip
Build seasonal variance into your forecasts by tracking actual vs. projected revenue for 12 consecutive months. You'll discover patterns like January's 40% drop or December's 30% surge that make next year's cash planning bulletproof.
Calculate this yourself?
In the KitchenNmbrs app you can do this in just a few clicks. 7 days free, no credit card.
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Frequently asked questions
How much buffer should I keep in my business account?
Maintain at least 2-3 months of fixed costs as a safety net. If your monthly fixed expenses total €12,000, keep €24,000-€36,000 available for unexpected costs or slow periods.
Should I include VAT in my cash flow forecast?
Absolutely, but track it separately from operating expenses. You collect VAT from customers but remit it quarterly to tax authorities. Plan these payments as major outflows in March, June, September, and December.
What are typical unexpected expenses in restaurants?
Refrigeration repairs often cost €1,000-€5,000, while oven or dishwasher replacements run €500-€3,000. Don't forget broken dishware, pest control, or sudden utility rate hikes. These surprises make your cash buffer essential.
📚 Sources consulted
- EU Verordening 852/2004 — Levensmiddelenhygiëne (2004) — Official source
- EU Verordening 853/2004 — Hygiënevoorschriften voor levensmiddelen van dierlijke oorsprong (2004) — Official source
- EU Verordening 1169/2011 — Voedselinformatie aan consumenten (2011) — Official source
- NVWA — Hygiënecode voor de horeca (2024) — Official source
- NVWA — Allergenen in voedsel (2024) — Official source
- Codex Alimentarius — International Food Standards (2024) — Official source
- FSA — Safer food, better business (HACCP) (2024) — Official source
- BVL — Lebensmittelhygiene (HACCP) (2024) — Official source
- Warenwetbesluit Bereiding en behandeling van levensmiddelen (2024) — Official source
- WHO — Foodborne diseases estimates (2024) — Official source
Food Standards Agency (FSA) — https://www.food.gov.uk
The HACCP standards shown in this application are for informational purposes only. KitchenNmbrs does not guarantee that displayed values are current or complete. Always consult the FSA or your local authority for the latest regulations.
Written by
Jeffrey Smit
Founder & CEO of KitchenNmbrs
Jeffrey Smit built KitchenNmbrs from 8 years of hands-on experience as kitchen manager at 1NUL8 Group in Rotterdam. His mission: give every restaurant owner control over food cost.
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