True story – wasting money in business

True story - wasting money in business

In my first few months of owning a restaurant, we needed to prepare and order for the Christmas break.  We had only been in business for 2 months, and had no idea about stock levels or how much we would need when the suppliers closed during this time, so we relied on the staff to help us with our order.

We were told it got really, really busy and we had best have a high level of stock to store.

I did no plan, no research or calculations on how much product was sold in a 1 week period, which was the length of time that the supplier was closed over the Xmas break. 

So I put in a big order, to the total cost of around $5000. 

This was a massive delivery, and the supplier would have been jumping for joy at the amount. 

The stock lasted us for 6 months and put a big strain on storage and expenses/cash flow, and even some of it was close to expiry at the end and had to be sold off in specials to get rid of it.

This was a big lesson on preparing a plan on inventory management and also cash-flow management.



When you don’t plan, you don’t have a direction in which to go or propel you forward and you spend money unnecessarily and put strain on cash-flow and inventory management.


I’m busy, I have no idea, I’ll listen to my staff as they know more than me, I don’t want to run out, I want to be able to supply the anticipated demand.


Inventory management, cash-flow is not important in the business; operations and staff have a higher priority.



Get advice from the supplier if you are in your first year of business, and see if you can review a previous invoice or competitor order for the same seasonality

Calculate your sales for a complete week and purchase that amount or maybe 2 weeks

Do not guess.


For new restaurant owners and managers, make life easier for you and your staff by having documented structures and systems – check out our Hospitality Manual Collection at this link -

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