A passion for creating high-quality, homemade food helped launch Arepalicious; a commitment to healthy finances helped it to thrive. Atehortua says he has focused on financial planning, close supplier relationships and careful cash flow monitoring.
“You never know what to expect,” says Atehortua, who financed the opening of the restaurant with a partner, whom he later bought out. “I always try to plan by keeping money in savings, because business can go up and down. Business credit cards and a line of credit can help us manage cash flow to cover regular expenses like ingredients, and unexpected expenses like repairs or replacement equipment.”
Atehortua’s focus on finances is helping him manage current cost increases. For example, a significant percentage of the restaurant’s sales comes through apps like DoorDash and Uber Eats, and many of the containers used for those takeout orders come from China. The cost for the items has risen by almost three times, while a case of eggs that once cost $40 is now $240.
He also keeps in close communication with his suppliers so that he can take advantage of payment plans when he needs to spread his bill payments out over time. This is a good option for vendors who offer flexible payments, but he notes that this is not possible for utilities, taxes and other costs.
When necessary, Atehortua has had to raise prices, but he tries to avoid that step.
“Sometimes raising prices is inevitable, but we can’t do that constantly, because when we change prices, we need to reprint our menus,” he says. “Sometimes, we can adjust recipes and swap in new ingredients, so we don’t always have to pass along price increases to our customers.”
Minimizing price increases is important to Atehortua, because he knows times are difficult for his customers. “People are clearly afraid to spend money,” he says. “We’ve seen the difference. On Mother’s Day weekend, for example, sales were 30% lower than other years. Other restaurants have told me they are experiencing the same thing.”
Even in the best of times, the restaurant business can lack consistent revenue. While the summer is busy thanks to Queens Night Market, and November-December is filled with orders for parties, business can be slow after the holidays.
These fluctuations are the reason Atehortua focuses on sustaining cash flow. To keep building on his financial skills, he has taken small business classes through Queens Night Market to learn more about financing, and he networks with other food vendors to learn what works for them.
Research shows that seeking support during economic challenges could help Latino-owned businesses thrive. In a recent survey, 65% of Latino business owners said they had sought external advice on finance or accounting. Eighty-three percent expressed interest in programs offering financial guidance for their businesses.1
Bottom line: Prepare for all potential financial developments by building up savings when you can and securing financing before you need it. Keep a close eye on cash flow to identify and take steps to address potential dry spells before they hit. Seek out suppliers that offer flexible payment terms. For example, net-60 vendors allow businesses to pay bills within 60 days of when they are due without a penalty.
