Article: “Restaurant Financial Red Flags” (Jun.2006)


"After 20 years in the restaurant industry, fifteen as an independent owner/operator and the last five as a consultant, I have experienced and observed just about every type of financial problem imaginable.

As all restaurant veterans already know, this is a business that is very unforgiving when it comes to achieving bottom line profits. Based on the 2004 Restaurant Industry Operations Report published by Deloitte & Touche LLP, average pre-tax profit margins range from 4-7% (4% for Full Service and 7% for Limited Service restaurants). Not only is there little room for financial management missteps, the problem is compounded by the lack of business experience and basic financial skills that most startup restaurateurs bring to the table."

source: "Restaurant Financial Red Flags" by John Nessel (4Hoteliers, Jun.12,2006)

For more restaurant related articles from 4Hoteliers, click here.


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