Running a bar or restaurant isn’t just about great drinks, killer food, or a beautiful space. That’s the fun part. The real game—the part that keeps you in business—is cash flow forecasting for hospitality success.
When we launched Black Rock, we believed whisky lovers would turn up. But turning up doesn’t cover rent. It doesn’t pay suppliers. It doesn’t keep the lights on. That’s what cash flow is for. Master it, and you’ll give yourself a real shot. Ignore it, and you’ll be calling the auction house to sell your back bar before the year’s out.
Here’s how to stay in control from day one.
1. Profit and Cash Flow Are Not the Same Thing
A basic mistake: thinking that because a business is profitable, it’s safe. It’s not.
You can be making money on paper, but if your cash is tied up in stock, unpaid invoices, or upfront supplier payments, your bank balance might still be in free fall.
Profit is what’s left after costs.
Cash flow is when money actually moves.
Example:
If your venue is owed £20,000 from event deposits, but you’ve got £15,000 in supplier bills due next week, and only £5,000 in your account, you’re in trouble—even if you’re “profitable.”
2. Forecast Cash Flow Weekly—Not Monthly
If you’re only looking at your numbers once a month, you’re already behind. Hospitality moves fast—you need to know where your cash stands every week.
A 12-week rolling cash flow forecast tells you:
What’s coming in (expected revenue from bookings, events, or regulars).
What’s going out (rent, wages, supplier payments).
Where the gaps are (so you can fix them before they become a crisis).
At Black Rock, we didn’t just hope the numbers would work. We tracked them constantly - and still do. If the weekend was looking slow, we’d push bookings or tweak stock orders. No guesswork—just control over the metrics in our command.
3. Don’t Let Suppliers Drain Your Cash
One of the biggest cash flow killers? Paying suppliers before you get paid. You can’t run a business if you’re always behind. The fix? Negotiate better terms from the start.
What to do:
Ask for 30-60 day payment terms—most suppliers would rather keep a steady client than demand upfront cash.
Order smart—don’t overstock just because you got a discount on bulk.
Match supplier payments to sales cycles—so you’re paying them AFTER your peak trading days, not before.
Get this right, and you’ll never be in a situation where you’re waiting for the weekend’s cash just to pay last week’s bills.
4. Keep Fixed Costs Low (Because They’re Relentless)
Rent, rates, insurance, wages—they don’t care if you had a bad week. That’s why you keep them lean from the start.
Rule of thumb: Rent should be no more than 5-10% of your projected turnover.
At Black Rock, we deliberately picked a smaller, high-impact space instead of blowing cash on a big, unnecessary site. That meant we could actually invest in things that made money—like the drinks and experience—rather than bleeding cash into square footage we didn’t need.
What you can do:
Go lean first—hire only essential roles and scale as demand grows.
Avoid high-fixed leases—negotiate revenue-based rent if possible.
Cut vanity spending—a slick buildout means nothing if you can’t afford to operate.
5. Keep a Cash Buffer (Because Something Will Go Wrong)
In hospitality, the only certainty is uncertainty. Maybe your main fridge dies mid-service. Maybe a supplier jacks up prices. Maybe a freak storm means no one turns up for a week. It happens.
Best practice: Have at least 3 months’ worth of operating expenses in reserve. If you don’t, one bad month could wipe you out.
6. Generate Upfront Cash (Instead of Relying on Daily Sales)
If you’re only relying on nightly sales, you’re limiting opportunities to bolster cashflow. Smart operators bring in cash before service even begins.
How?
Gift cards & memberships – Get money upfront and redeem later.
Prepaid events & tasting menus – Secure cash before costs even hit.
Wholesale or retail – Sell branded merchandise, bottled cocktails, or at-home kits.
7. Track Cash Flow Daily—Not Monthly
If you’re only reviewing cash flow once a month, you might already be in trouble by the time you spot an issue.
The best operators track this daily:
Know your revenue vs. costs every single day.
Adjust staffing to match quiet days.
Spot waste—over-pouring, spillage, stock errors.
Margins in hospitality are thin. If you let cash slip through the cracks, it’ll kill your business before you even realise it.
Final Thoughts: Cash Flow is the Game
Here’s the truth: Cash flow isn’t an accounting exercise—it’s a survival strategy.
Forecast weekly, not monthly.
Negotiate supplier terms that work for you.
Keep fixed costs low—especially rent.
Have a cash buffer for the bad months.
Use pre-paid revenue streams to stay ahead.
Track cash flow daily—NOT monthly.
Get this right, and your business doesn’t just survive—it thrives.
Comments