FREE TOOL · FINANCIAL HEALTH SCORECARD

Is your restaurant's financial foundation solid?

Answer a few questions and get an honest score — no email, no pitch. The questions adapt based on whether you're pre-opening or already operating.

TIME TO COMPLETE~5 minutes

COSTFree

Where are you right now? This determines which questions you get.

01 · THE NUMBERS

What you should know cold

These are the metrics that separate operators who understand their business from operators who are surprised by it.

Do you know your food cost percentage right now?

Food cost % = Cost of Goods Sold ÷ Food Revenue × 100

Benchmark: Casual dining 28–32% · Full service 30–35% · Fast casual 25–30%. If you're outside your range and don't know why, that's the issue.

Yes — I know it and it's within a healthy range for my concept

Yes — I know it, but it's outside the benchmark range

Roughly — I have a general sense but not a precise number

No — I don't track this regularly

Do you know your labor cost percentage this month?

Labor cost % = Total labor (wages + taxes + benefits) ÷ Total Revenue × 100

Benchmark: 25–35% depending on concept and service model. The number alone isn't the issue — not knowing it is.

Yes — I know it and track it weekly or monthly

Roughly — I have a ballpark but not a precise figure

No — I don't track labor cost as a percentage

Do you know your prime cost — and what is it?

Prime cost = Food & beverage cost + Total labor. The single most important number in your P&L.

Benchmark: Under 60% is healthy. 60–65% is workable with tight control. Over 65% and you are fighting math every single week.

Yes — I know it and it's under 60%

Yes — I know it and it's between 60–65%

Yes — I know it, but it's over 65%

No — I don't calculate prime cost

Do you produce and actually review a monthly P&L?

Yes — every month, within 2 weeks of month-end

Sometimes — it happens but not consistently

My accountant handles it — I see it at tax time

No — I run on gut and bank balance

Do you know the weekly revenue you need to break even?

Your break-even isn't just covering food and labor — it includes rent, utilities, insurance, loan payments, and every other fixed cost. If the number in your head doesn't include debt service, it's wrong.

Yes — I have a specific number and it includes debt service

Roughly — I have a general sense but it's not a precise calculation

No — I don't have a break-even number

02 · CASH & LEVERAGE

Operating cash flow vs. free cash flow

The most dangerous mistake in restaurant finance: your P&L shows profit but your bank account is shrinking. Knowing why is the difference between managing a business and being managed by it.

Operating Cash Flow is what the restaurant generates from operations — revenue minus the day-to-day cost of running it. Free Cash Flow is what's left after debt service: SBA loans, equipment financing, investor returns. A restaurant can show positive operating cash flow and negative free cash flow. That gap is where operators get into trouble.

How many weeks of operating expenses do you have in cash right now?

Operating expenses = everything it costs to keep the doors open for one week, not including debt payments

8+ weeksHealthy buffer — you can weather a slow month

4–8 weeksAdequate — manageable with close attention

2–4 weeksTight — one bad week can create a cascade

Under 2 weeksAt risk — this is a survival situation

After your monthly debt payments, do you have positive free cash flow?

Debt payments = SBA loan, equipment financing, investor distributions, any fixed debt obligations

Yes — comfortably positive after all debt service

Yes — but barely. It's close every month

No — debt service is consuming my operating cash flow

I don't separate operating cash flow from free cash flow

Do you have a debt schedule?

A debt schedule lists every loan and financing obligation: lender, balance, interest rate, monthly payment, and maturity date.

Yes — documented and reviewed regularly

Sort of — I know what I owe but it's not formally tracked

No — I don't have a formal debt schedule

I have no debt obligations

Do you have a line of credit available if revenue drops?

Yes — available and not fully drawn

No — and I'd like to establish one

No — and my cash position makes this urgent

Are all vendor accounts current — nothing past due?

Yes — all vendors are current

Mostly — a few accounts are slightly past due

No — several vendors are past due

03 · SYSTEMS & INFRASTRUCTURE

The back office holding it together

Your financial data is only as good as the system producing it. Most operators discover their books are wrong at the worst possible time — when they're applying for a loan, facing an audit, or trying to understand why they're out of cash.

What are you using for bookkeeping?

QuickBooks or dedicated accounting software — current and reconciledChart of accounts configured for the concept

Spreadsheets — I manage it manually

My accountant handles it — I don't see the books until tax time

Nothing formal — I run off bank statements

Are your books current within the last 30 days?

Yes — reconciled and current within 30 days

Within 60 days — a bit behind but reasonably current

More than 60 days behind, or I'm not sure

Are you running payroll through a dedicated payroll platform?

Toast Payroll, Gusto, ADP, Paychex, QuickBooks Payroll — any platform that handles tax filings automatically

Yes — on a platform that handles tax filings automatically

No — I process payroll manually or informally

Do you have a dedicated business bank account, completely separate from personal?

Yes — business and personal are fully separated

No — there's some commingling

01 · FINANCIAL PLANNING & PROJECTIONS

Do you know what you're opening into?

The financial model you build before you sign a lease will either protect you or haunt you. Most pre-opening operators have one — but most are missing the numbers that actually matter.

Do you have a complete pro forma P&L for your first 12 months?

A pro forma projects revenue, cost of goods, labor, and all operating expenses month by month. Not a napkin number — a working model.

Yes — built with realistic assumptions, reviewed and stress-tested

Yes — but it's high-level and probably optimistic

Partially — I have revenue estimates but not a full model

No — I don't have a formal pro forma

Does your break-even revenue target include monthly debt service?

Most pre-opening models show a P&L break-even — the revenue needed to cover operating costs. The real break-even is higher, because it also has to cover your loan payments. If your model doesn't include debt service, you're working with the wrong number.

Yes — debt service is built into my break-even calculation

Partially — I've thought about it but haven't fully modeled it

No — my break-even is based on operating expenses only

I don't have a break-even target yet

Have you stress-tested your projections at 70–75% of expected revenue?

Most new restaurants don't hit their revenue projections in the first 6 months. Running the numbers at 70% of your target tells you how long you can survive a slow ramp — and whether your capital structure can handle it.

Yes — I've modeled a downside scenario and know the impact

Informally — I've thought about it but haven't run the numbers

No — my model uses one revenue scenario

Have you built a costed menu — food cost % calculated per item?

Menu costing tells you what it actually costs to produce each dish and whether your pricing supports your target food cost %.

Yes — full menu costed with target margins built in

Partially — some items costed, working through the rest

No — menu is set but not formally costed yet

Menu is still being developed

02 · CAPITAL STRUCTURE & WORKING CAPITAL

How you're funding it — and what's left after

Being overleveraged going into an opening is the most common financial mistake in this industry. The build cost is only part of the problem. The gap between opening day and cash-flow-positive is where operators run out of money.

Operating Cash Flow is what the restaurant will generate from running the business. Free Cash Flow is what's left after debt service — loan payments, equipment financing, investor obligations. Model both before you open, not after. The difference between the two is your real margin for error.

After the build-out is fully funded, how much operating capital will you have in the bank?

This is the cash that covers payroll, food orders, rent, and every other bill from opening day until revenue catches up. Build costs almost always run over. Timelines almost always slip. Plan for both.

6+ months of projected operating expensesStrong position — you have room to ramp

3–6 monthsWorkable — if the build comes in on budget and on time

1–3 monthsThin — a delay or cost overrun puts you in crisis before you open

Less than 1 month — or the build will consume most of our capital

Have you calculated your projected monthly debt service and what % of projected revenue it represents?

Monthly debt service over 10% of projected revenue is a warning sign. Over 15% is a structural problem that makes profitability very difficult regardless of how well the restaurant performs operationally.

Yes — under 5% of projected monthly revenue

Yes — 5–10% of projected monthly revenue

Yes — 10–15% of projected monthly revenue

Over 15%, or I haven't calculated this

Do you have a complete debt schedule — every obligation, rate, payment, and maturity?

Yes — every loan and financing obligation is documented

Partially — I know what I owe but it's not formally laid out

No — financing is still being figured out

Self-funded — no debt obligations

Do you have a line of credit in place or in process?

A line of credit pre-opening is much easier to get than post-opening. Banks lend on projections before you open; after, they lend on performance — which takes time to establish.

Yes — line is approved and in place

In process — applied or in conversation with a lender

No — haven't pursued one yet

03 · BACK OFFICE SETUP

The infrastructure before the doors open

These are the things that most operators treat as afterthoughts — and then spend their first year untangling. Setting them up right pre-opening takes days. Fixing them post-opening takes months.

Have you formed your business entity?

LLC, S-Corp, or other structure — properly filed and with an operating agreement in place

Yes — entity formed, operating agreement in place

In process — working with an attorney on it

No — not yet formed

Do you have a dedicated business bank account open?

Yes — business account open and completely separate from personal

No — not yet

Have you set up accounting software with a restaurant-specific chart of accounts?

QuickBooks Online is the standard. A restaurant chart of accounts separates food cost, beverage cost, labor by type, and every cost center in a way that generic setups don't.

Yes — software set up, chart of accounts configured for my concept

Software selected, but setup isn't complete

No — planning to handle this closer to opening

Have you selected a payroll platform?

Toast Payroll, Gusto, ADP, Paychex, QuickBooks Payroll. Tip credit, overtime, and multi-rate payroll for restaurants is complicated — the platform matters.

Yes — platform selected and ready for onboarding employees

Evaluating options — haven't decided yet

No — haven't gotten to this yet

04 · BUILD-OUT FINANCIAL DISCIPLINE

Tracking the money before revenue exists

The period between signing a lease and opening the doors is the highest-risk financial window of the entire business. Every dollar out is a real dollar. Revenue is hypothetical. How you track the build determines how much you have left when you open.

Do you have a detailed line-item startup cost budget?

Permits, design, construction, equipment, smallwares, POS, pre-opening labor, marketing, licenses, deposits, working capital — every category, not just a round number.

Yes — every cost category itemized with realistic estimates

General budget — major categories covered but not line-item detail

No — working from a total number without a breakdown

Are you actively tracking actuals against the budget as money goes out?

Yes — every payment is tracked against budget in real time

Informally — I'm keeping track but not against a formal budget

No — not tracking actuals against budget yet

Have you built a week-by-week cash flow from lease signing to opening day?

This maps every dollar going out before a dollar comes in — construction draws, equipment deposits, pre-opening payroll, licensing fees, training costs. It tells you when you'll hit your lowest cash point and whether you have enough to get through it.

Yes — week-by-week cash flow modeled through opening

Partially — general timeline but not week-by-week cash mapping

No — haven't modeled pre-opening cash flow

Have you set aside a contingency fund of at least 10% of your total build cost?

Restaurant build-outs routinely run 10–20% over budget. A contingency fund isn't pessimism — it's the single most reliable predictor of whether you'll make it to opening day fully capitalized.

Yes — 15% or more set aside as contingency

Yes — 10–15% contingency reserved

Less than 10% — tight but something is set aside

No contingency — budget is fully committed

No email required. Results appear below.

YOUR RESULTS

—/100

Want to talk through what you found?

Whether your score is a 90 or a 40, there's usually one or two things that move the needle most. I'll tell you what they are in a 30-minute call — no pitch, no package.

Let's talk ellis@reihospitality.com