Cash Management Planning For Your Restaurant

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Pinpoint your desired end result, devise a strategy to achieve it, and stay the course.


Have you seen the movie Training Day? The flick takes you through an elongated 24 hour period of rookie LAPD narcotics cop, Jake Hoyt (Ethan Hawke) on his first-day ride along with veteran detective, Alonzo Harris (Denzel). Long story short, Jake gets far more than he bargained for when he strapped on his seatbelt that morning. Training Day has perhaps one of my favorite movie quotes of all-time, and let me tell you, nobody says it better than Denzel: “This shit’s chess! It ain’t checkers!” I honestly can’t even read that without hearing his voice behind the words. While Denzel, in this film, may have been a crooked cop doling out what he personally deemed as justice, his words were spot on. Denzel was talking about a plan.

A plan with strategic, calculated moves that will put you in position to reach whatever end result you see as fit. Don’t judge, but I was watching this the other night and when I heard that quote for, oh probably the 100th time, all of the sudden cash management popped into my head. News flash – it’s the exact same principle.


Throughout this month we’ve dipped our toes into various cash management tactics. We talked about understanding operational days as they relate to your cash flow and utilizing that knowledge to ease your daily worriment of money in the bank, enabling yourself to focus exclusively on your guest. We’ve also discussed best practices through nixing Vendor Terms and performing payroll on a weekly basis; decisions that ultimately impact your team members positively. Employing strategies like these is the ONLY way to start effectively managing your cash to put yourself in a position so you can begin to prioritize your debt.

This is where the bigger picture comes into play. In our Effective Cash Management article, we advised two simple rules to follow for effectively managing your cash derived from investments.

1. Don’t be afraid of the dark;

2. Don’t sell your soul.

If you follow the rules and position your operation to grow in a robust and healthy manner, you will start to see your bottom line slowly rise over time; however, that’s only a piece of the picture.

It’s critical to remember that no matter what you see on your bottom line, you remain fully aware that it’s merely the operational side of things. Yes, you may be profitable on your P/L, but what about the money you need to have in place to reduce your debt?


Using a break-even analysis tool is a great way to bring expenses you typically see on your balance sheet (debt servicing and capitalized expenses) to life. It will allow you to take off your rose-colored glasses and give you a more rounded picture of your true cash position, and THEN you can start to prioritize your debt – intelligently. Again, remember that cash management is like chess; think of the moves you need to make before you make them. Maybe mom can wait for the money you owe her on the loan she gave so you can instead start to pay off your high-interest loans first, like your SBA loans… King Kong ain’t got shit on you!