With less working capital requirements, low initial setup costs, and almost negligible staff, and equipment needs, the dynamics of cloud kitchens have gained quite a traction over the traditional dine-in facilities. However, many cloud kitchens fail in times of crisis, not because of their food or services, but the lack of proper financial planning. According to Toptal, more than 60% of cloud kitchens fail in the first year of operation and nearly 80% are closed down by their 5th anniversary. The major reason being the lack of financial planning.
Even with a steady working capital, cloud kitchens struggle to cover overhead expenses, because of a poor cash flow. If you’re a cloud kitchen owner, wouldn’t it be great to have a detailed report every month on your business expenditures, so that you can track your cash flow? But, that would require heavy manual work, you may think. Don’t worry, in this blog, we ‘ll go through the major cashflow challenges cloud kitchen owners face and how a single business credit card can help you solve it all.
The Challenges of Managing a Cloud Kitchen
- Fluctuating Payroll – Like every odd business, cloud kitchen payroll can fluctuate, leading to lots of sleepless nights for owners like you. With peak seasonal pressure, high staff turnover and varying hourly rates, you’d always want your cloud kitchen business to stand strong whatever the times are, and the solution for this, is founderscard’s in-built expense management system that tracks all your payments and helps you manage business spends wisely.
- Lack of Cash Forecast – Wouldn’t it be great if you know your numbers for the future? But, let’s be honest, as a cloud kitchen owner, your least concern is the cash flow scenario forecast. With cash flow forecasting, you can minimize surprise bills, and heightened cash flow pressures in the peak season. Who’s going to do that for you? founderscard’s AI-generated business reports.
- Lack of Contingency Cash – Owning a cloud kitchen comes with the risk of unexpected expenses. Whether that is a bill, a faulty appliance or another cost, it can have a big impact on your cash flow. Operating hand-to-mouth, without a cash buffer means that you run the risk of any such unexpected cost derailing your business completely. With founderscard ‘s best-in-class credit limit, keeping a contingency fund, as well as taking out insurance can safeguard the future of the business.
Defying unexpected pay issues among the exceptional money related droop, Cloud kitchen owners are scrambling to find resources to help them keep afloat and prepare for what may be years-long financial recovery. One of the best ways to maintain the finances of your cloud kitchen can be through founderscard, as apart from managing the finances, it also helps in other monetary issues, including automatic bill payments and easy credit access.