Financial Planning and Management

Financial planning and management are the foundation of a successful shared kitchen, helping ensure your venture is both financially sustainable and capable of growing over time. Crafting a solid financial strategy begins with understanding your kitchen’s projected operating costs and revenues. Financial forecasts allow kitchen founders and planners to compare different facility designs and service offerings to see which best aligns with their financial goals. By estimating capital needs and anticipating operating expenses, you can develop a realistic budget that not only gets your kitchen up and running but keeps it thriving long-term.

While it’s easy to focus on initial capital costs—such as construction, equipment, and facility upgrades— it’s crucial not to overlook operating costs and revenue forecasts. Your kitchen’s sustainability depends on generating enough net operating income to cover recurring expenses. This chapter delves into the key elements of financial planning, from estimating development costs and creating detailed operating budgets to forecasting revenue streams. Understanding these financial drivers will help you secure loans, attract investors, and ultimately, make informed decisions that support the growth of your facility.

As you balance revenues against costs, you may find that adjustments to your facility’s design or service offerings are necessary. For instance, if a large portion of your income is expected from events, you might need to expand certain amenities, such as bathrooms or parking. Or, if your forecasts show you need to serve a high volume of members, ensuring adequate storage capacity becomes critical. Evaluating these factors early will position your kitchen for financial success and ensure it can adapt to future growth and changing community needs.

Establishing an Entity

Creating a financial plan for a shared kitchen involves several key steps, starting with choosing the right business entity for your project. Establishing a legal entity, such as a Limited Liability Corporation (LLC), S Corporation, C Corporation, or nonprofit, is crucial to protect your personal assets. Each entity type offers different benefits in terms of taxation and liability. See the Business Model Design chapter for additional information about establishing your legal organizational structure. Early legal and accounting consultations are advised to ensure proper setup and avoid significant legal expenses down the road.

Estimating Development Costs

Estimating the development costs for building a shared kitchen in a new or existing space is vital for planning your capital budget and seeking funding. First, do initial facility design and planning work to set parameters for your facility size, equipment, and building requirements. Review the Facility Design and Equipment chapter for more guidance on this process. If you anticipate your project will involve significant renovations or new construction and you do not have construction expertise, find experienced consultants or advisors to help you develop your estimates and pro forma. There are several templates and online classes available to help you get started, but adequately accounting for all the development costs can be challenging if you do not have construction experience. The bottom line is that if you do not know, seek expert guidance to save on expenses in the long run.

Development Pro Forma

Your development pro forma will include your estimated cost for building out your facility, including all construction costs, equipment costs, transaction costs, and expertise needed to complete the job. The pro forma will vary depending on whether you are leasing, buying, renovating, or building from scratch. Typically, a development pro forma for a kitchen incubator will include the following:

• Business entity setup, legal, and accounting fees
• Consulting fees for additional expertise
• Land costs
• Building costs
• Architectural and engineering costs
• Permits and approvals
• Kitchen equipment costs
• Pre-launch expenses (salaries, services, and overhead during the development phase)
• Initial marketing expenses (logo, web design, etc.)

Getting an accurate estimate can be very challenging. Costs to build out a kitchen in an existing space can easily run hundreds of dollars per square foot and can shift over time with market fluctuations. Architects and consultants often provide ballpark estimates, but getting thorough estimates from experienced contractors is the best way to develop accurate projections. Kitchen owners report that construction costs are frequently much higher than the original ballpark estimates or construction bids. This can be due to many things, including:

• The builder’s lack of experience with building commercial kitchens
• Increases in materials and labor costs
• Unanticipated upgrades to systems such as plumbing or electrical that were not initially identified
• Unexpected problems discovered after construction starts
• Renovations needed to meet Americans with Disabilities Act (ADA) or fire code requirements
• Unanticipated streetscape improvement requirements (including sidewalks, lighting, street trees, parking areas, etc.)
• Additional licensing or building department requirements

Sometimes, significant changes to an older existing building (based on the percentage or value of improvements) will trigger new requirements to bring the building up to the current code. These can include costly items such as structural upgrades, energy code improvements, or wastewater infrastructure. It can be worth consulting with the permit department before finalizing plans to make sure you understand the full scope of requirements to obtain complete estimates.

Significant layout or design concept changes, particularly after construction has begun, can add considerable costs. Doing your homework in advance about regulations and building uses, as discussed in the Facility Design and Equipment chapter, can help you avoid costly change orders. Ben Sloan of Tiny Drumsticks, Inc. emphasizes the importance of evaluating costs from a value perspective rather than simply opting for the cheapest option:

I recommend considering higher-priced options during interviews, as they often reflect valuable experience. For instance, a restaurant owner I know chose a cheaper alternative for installing their kitchen hood, saving $35K initially. However, they overlooked crucial details, like the placement of fans and return air. This led to the return air being installed on their back patio instead of the roof, consuming valuable space and requiring additional costs, such as building a fence and addressing noise issues. In the end, the mistake negated the savings and cost them at least $5K per month.

By anticipating and planning for these expenses, you can create a facility that meets the needs of your members while staying compliant with regulations and minimizing unexpected costs. The following breakdown provides a guide to the major expense areas in the development process, helping you structure a realistic and comprehensive budget for your shared kitchen.

By carefully planning your development budget and considering all potential costs and funding sources, you can create a financially sustainable shared kitchen that meets the needs of your members and supports the local food economy.

Equipment Estimates

Getting an equipment estimate from a dealer is usually more manageable if you have an accurate picture of your needs. Review the Facility Design and Equipment chapter for guidance on developing your equipment list. Prices vary significantly between equipment sellers, so be sure to shop around and compare prices from multiple dealers. Some stores will price match or be open to negotiation if you buy a lot of equipment. They may also offer financing for equipment, which can free up your startup capital for other expenses and help with cash flow in the crucial startup period.

Research different brands and models to find the best balance between cost, efficiency, and durability. Look for reviews and recommendations from other shared kitchen operators to guide your choices. Explore multiple sourcing options, including direct purchases from manufacturers, wholesale suppliers, and resellers. Attending industry trade shows can also provide opportunities to compare equipment and negotiate deals.

Consider leasing equipment as an alternative to outright purchases, especially for high-cost items. Leasing can reduce initial capital expenditure and provide flexibility to upgrade equipment. Ensure that any leased equipment includes maintenance and repair services to minimize downtime.

Lastly, establish good working relationships with reliable vendors who supply parts and maintenance services. A network of trusted suppliers is crucial for ensuring quick repairs and replacements, which is essential for keeping your kitchen running smoothly.

Review the Facility Design and Equipment chapter for more information about the design process and factors that can affect your construction budget. Because it is easy to underestimate construction costs, you will want room in your budget, or alternate sources of capital, to cover cost overruns during construction.

Financing or Purchasing Used Equipment

Some kitchens opt to purchase used equipment to save money, while others prefer new, more reliable
options.

New equipment often comes with warranties, which can be valuable. When deciding between new and used, consider both the up-front costs and the potential impact of equipment breakdowns on your operations and revenue. For used equipment, it’s wise to have someone knowledgeable evaluate it to ensure it’s in good working condition. For more details, see the Equipping Your Kitchen section of the Facility Design and Equipment chapter. Ben Sloan of Tiny Drumsticks Corp. puts it this way.

Another option is to finance equipment. Financing is generally pretty easy because a tangible asset is used as collateral. Yes, you are adding debt, but you are also freeing up cash you will definitely want and need as you build a first space (or 10th space)! You can also tax deduct the interest you pay. Again debt is not always fun, but cash flow is so important in running a business.

Estimating Operating Revenues

The revenues in your budget will vary depending on the revenue channels outlined in your business model and the utilization of your rentable spaces. See the Pricing Models chapter for additional discussion on how to set rates and fees for the various spaces rented and services provided. Revenue from space rental may include:

• Usage or rental fees. Typically, this includes the rental fee structure for the different types of members/spaces broken out by type and the estimate based on utilization assumptions. This might include:
• • Member shared kitchen rentals
  • Dedicated private kitchen rentals
  • Ancillary rentals:
    – Special event rentals
    – Special business rentals (photography, filming, consumer research, research and development, etc.)
    – Community rentals such as cooking classes

• Storage fees. Ancillary income for dry, freezer, and refrigerator storage may be included in a rental package or itemized separately based on utilization assumptions.
• Add-on fees. Application fees, surcharges (such as utilities), overage fees, special equipment rental fees, equipment storage fees, etc.
• Incubation services revenues. Classes and workshops, coaching and advising, co-packing or contract manufacturing, and incubator membership fees separate from kitchen rental fees.
• Sales revenues. Pop-ups, retail, markets, food service, catering booking fees, distribution
• Community serving programs. Food access programs, community dinners, workforce training programs, etc.
• Other operating funding. Grants, donations, and sponsorships.

Additional discussion of program and service revenue opportunities can be found in the Services Planning, Community Programming and Services, and Business Incubation Programs chapters. The below shows the revenue types kitchen operators reported as their top three revenue sources in the 2023 Shared Kitchen Survey .

Forecasting Utilization

For many revenue sources, you will need to estimate the amount of usage to determine the estimated rental or fee revenue. This means making assumptions about the usage level for each rentable area or service. It is important to use realistic utilization estimates. Even though your facility may be open 24 hours per day, it will not be rented every hour of every day. Kitchen founders often end up making these common errors in projections:

• Overestimating demand (number of members)
• Overestimating the number of hours each member will use
• Overestimating the number of off-peak hours that will be used
• Failing to account for the time the kitchen will be offline or used for other activities (cleaning, classes, special events, etc.).
• Failing to research licensing regulations that could impact the number or types of businesses that can be accommodated.

Determining capacity involves assessing rentable prep space, storage space, and operational hours. Start by calculating the maximum number of members based on your available prep stations and tiered fee structure, keeping in mind that storage space is often the limiting factor. Consider using time slots and dayparts to maximize usage throughout the day and gradually onboarding members to avoid overbooking while allowing room for growth. Additionally, check local regulations, as some areas may determine capacity based on water usage, storage, and electricity load.

Refer back to your market research to reflect on the estimated demand for your space from different types of members. It may help to create a sample kitchen usage schedule based on your rentable areas and target members. How long do food trucks typically spend in the kitchen before hitting the streets? How long does a caterer need to cook and clean? How long does a farmer need to prep for the farmers’ market? What is the seasonality of demand in your area?

Create a sample roster of members and fill them into a sample schedule. Use numbers gathered from your surveys, interviews, and other market research to create estimates for a mix of businesses. Be sure to reserve time for other kitchen uses, such as classes or copacking. Then, add in downtime for cleaning and maintenance. Calculate the revenue from that usage based on your fee schedule (hourly, monthly, membership, etc.). Add estimates for additional fee revenue from application fees, special equipment fees, and extra services such as package handling or linens. Finally, reduce your estimate to pad for underutilization and evaluate if you will still break even or, ideally, profit. Using multiple years of utilization forecasts to feed into your pro forma (discussed below) is best. You may not reach your target utilization or revenue in year one, so this will help you plan other sources of capital to make up for any shortfall in income in the first few years.

Sample Utilization Forecasts

The following mock utilization forecasts provide an overview of how to estimate revenue based on different levels of kitchen and storage utilization. It assumes a combination of multiple spaces and variable peak and off-peak time, helping you set realistic goals and project your kitchen’s financial performance. While this is an oversimplified method, it provides a foundational picture of the revenue potential so you can develop targets needed for sustainable operations. For more detailed discussions about pricing strategies, refer to the Pricing Models chapter.

Facility Modeling Tools

New Venture Advisors Kitchen Facility HubSizer® and The Food Works Group Shared Commercial Kitchen Facility & Financial Modeling Tool are tools that can help you project utilization and revenues. Links to them are in References .

Food Works Group, in partnership with FoodOps, created a Shared Commercial Kitchen Facility & Financial Modeling Tool as an integrative financial planning resource that helps pre-concept project teams and established operations:

• Conceptualize facility layout and orientation
• Develop localized estimates on buildout costs
• Accurately project capital and key equipment costs
• Model kitchen utilization and operating revenue (kitchen rental, storage, business support services)
• Reflect commensurate operating expenses
• Develop staffing plans and technology solutions, all in pursuit of financial sustainability

The tool is designed to be flexible, with inputs that can be adjusted and assumptions tested, as it supports operations from pre-concept through implementation It can serve as a budget-builder, multi-year pro forma, or long-term planning tool. Contact the Food Works Team to learn more about how this tool might best support your project’s planning and evolution.

Additionally, Oklahoma State Extension offers templates that help you compare “what if” scenarios by entering your numbers and assumptions. They have made their templates user-friendly and include a user guide, but basic familiarity with Microsoft Excel is needed. Information about their Financial Analysis Model for Building/Operating a Commercial Kitchen is available in the References chapter.

Operating Pro Forma

A pro forma is a financial feasibility analysis tool used to more accurately project operating revenues and expenses. The pro forma calculates the anticipated profit from a given business plan. It integrates the estimated startup costs with the projected revenues to determine the expected return, typically over three to five years. To develop your operating pro forma you need to project your revenue (from your utilization forecast and other revenue sources) and operating costs into an operating budget.

Operating Costs

Researching operating costs during the planning stages will save you from surprise expenses that undermine your profitability after you open. Be as thorough as possible in accounting for your costs by getting estimates for things like contract services, insurance, employee benefits, cleaning, and security. You will also have to do your own research to estimate salaries, taxes, utilities, maintenance, and back office expenses like accounting and legal services. Below is a list of typical cost items in a shared kitchen budget. Be sure to look at the additional costs specific to your facility and business model.

Kitchen-related costs are often underestimated by those new to commercial kitchen operations. These include grease trap pumping, hood cleaning, equipment deep cleaning, pest control, laundry services, cleaning supplies and chemicals, equipment maintenance, wastewater fees, etc. Maintenance costs were among the top three highest costs for 41% of respondents participating in the 2023 Shared Kitchen Operator Survey. Setting aside funds in a maintenance reserve account can help ensure you are prepared for unexpected repair expenses.

The first step is to identify all the applicable costs for your facility model. If your team does not have commercial food experience, consult an advisor or experienced food service operator to identify and research recurring kitchen-related costs. Take time to calculate the estimated volume of supplies and cleaning products. If you offer laundry services to your members (in-house or contracted out), include these.

You can develop your budget estimates and pro forma in Excel and other spreadsheet software. If you are not skilled at developing a financial spreadsheet, you can use online tools, YouTube videos, and business assistance programs to learn what to include and how to program it. You might prefer to work with a consultant, accountant, or business advisor who can set one up for you. A well-designed spreadsheet can be a helpful tool for testing different business models and scenarios by allowing you to quickly calculate changes to your utilization, income, and costs and see their impact on the bottom line.

Fixed and Variable Costs

Operating costs are often described as either fixed costs or variable costs. Fixed costs are those that are unchanged by the amount your facility or programs use. Commonly, this would be expenses like rent/mortgage, phone bill, insurance, etc. Variable costs, like utilities and cleaning supplies, will increase depending on how much they are used. Be careful to account for changes in these variable costs when estimating your net income or breakeven. Remember that some expenses, like staffing costs, may remain fixed until you exceed a certain capacity, and then they will increase as you bring on additional help.

Estimating Utilities

Utilities can be among the most challenging costs to estimate since they depend on your facility’s utilization, design and materials, equipment, seasonality, and utility rates. The 2023 Shared Kitchen Operator Survey found that 81% of respondents reported utilities as one of their top three largest costs, the most of any category.

Depending on the size of your facility, you can get a sense of local utility costs by talking to other food operations in your area, such as meal programs, restaurants, and small processors. Still, their operations may be less energyintensive than a shared kitchen with high utilization. Once you have an equipment list for your operation, you can create an estimate using the utility consumption data from the equipment manufacturers and calculate costs for an estimated amount of usage based on your local utility rates.

After you have your equipment estimate, you will need to add additional estimated costs for HVAC, water, heating, office equipment, lights, etc., to get an overall utility estimate.

Once you are operating, you may need to adjust your budget to account for actual utility costs, so it is best to leave some wiggle room in your estimates. You may want to ask your utility provider to conduct a rate analysis to ensure you are being charged the proper rate for your facility. Be certain to monitor your utility consumption compared with your utilization on an ongoing basis to determine if your rental rates are adequate or if special fees are needed to cover heavy uses, such as special equipment. Sensors and energy-tracking monitors can be helpful for understanding and optimizing energy use.

Tracking spikes in your utilities can also tip you off to leaks or malfunctions in your machines. You can use a spreadsheet, online tools from your utility provider, or the Energy Star Portfolio Manager to track usage. See the Green Building Design section of the Facility Design chapter for more information.

Understanding Your Breakeven

As you run financial scenarios, you will want to know your breakeven point. Your breakeven point is where all your costs are covered by your revenues (factoring in variable costs that will increase as utilization increases). If breakeven requires an unrealistic utilization, look at your revenue structure and costs. Do you need to adjust or look for additional revenue/funding sources? If your profitability seems sky high and you wonder why everyone doesn’t run a kitchen, you may be underestimating costs or overestimating utilization/revenues. Reach out to advisors or other kitchen operators for feedback about your numbers.

What is the kitchen’s current financial status?

Data from 2023 Shared Kitchen Operator Survey question “What is the kitchen’s current financial status?” Total responses: 165

It is also beneficial to create different scenarios to test how the budget will turn out under low, medium, and high scenarios. Refer to the utilization section above for a discussion of how to run different utilization scenarios. You want to have a margin that allows you to break even without 100% utilization to make it through the ramp-up period, survive competition, weather tough economic times, and survive potential major equipment failures. Could you sustain the operation at 50% utilization? What does this tell you about the reserves you need to have?

Cash Flow Management

Cash flow is critical for the sustainability of your kitchen. Breaking even or turning a profit annually does not always mean you can cover monthly expenses. Some kitchens experience considerable seasonality in their utilization and may have delays in receiving payment if they bill in arrears. Therefore, it is important to project the monthly net profit to identify any shortfalls. Think ahead about the sources of capital you can cultivate to help manage cash flow. This may include lines of credit from a commercial bank, investors, loans from friends and family, donations, or grants. See the Funding Strategies chapter for potential sources of funding.

Five-Year Projections

It is helpful to create careful projections for the first couple of years when you will be ramping up to full utilization so you can estimate your shortfall and plan to raise these funds through other sources (capital campaign, grants, donations, loans). Think realistically about how long it will take to market the kitchen and onboard new members. Many kitchens underestimate how long it can take to recruit, onboard, invoice, and receive payment from a prospective member. Often, this process can take several months to a year for each business, depending on whether the business is just forming or moving from another location. This delay can leave the kitchen without funds to pay overhead bills and put the facility at risk of closure. See the Member Recruitment and Management , Market Research , and Branding and Marketing chapters for more information on steps you can take before you open to help you generate revenue more quickly.

When calculating your budget for the first year, remember to factor in all the fixed costs, such as rent or loan payments, staff expenses, and contracted services that continue regardless of whether anyone uses the space. Some of these are likely to begin before your opening day. Then, you will need to estimate the variable costs, such as utilities, based on increasing levels of occupancy/utilization during your first couple of years.

Finally, after considering costs and reasonable revenue projections for the first two years, build your estimates for the next three years for a five-year financial vision. It is important to know that this vision will change. The goal of creating pro formas is to determine whether your kitchen plan is likely to succeed and figure out the best way to get there. As you learn more about your members, their preferences and needs, and other potential revenue streams, continue to update and adjust your projections.

How has kitchen revenue changed since opening?

Data from 2023 Shared Kitchen Operator Survey question “Compared to three years ago (or whenever the kitchen opened, if less than three years old), has kitchen revenue increased, decreased, or stayed the same?” Total responses: 165

What is the kitchen’s current financial status?

Data from 2023 Shared Kitchen Operator Survey question “Compared to three years ago (or whenever the kitchen opened, if less than three years old), has kitchen profit (revenue – costs) increased, decreased or stayed the same?” Total responses: 164

Financial Management

A kitchen’s success is intimately tied to its financial success. Even well-funded kitchens must develop and implement strong financial management and tracking systems.

Billing and Invoicing

Tracking and ensuring the accuracy of member accounts for invoicing is arduous. If done manually, you will need to combine monthly charges (for storage and monthly recurring fees) with variable rates and fees from bookings, actual time used in the kitchen, and cancellations. Instead of spending hours reviewing security cameras to see when a member left, consider using some of the software and hardware solutions available. Quickbooks, Freshbooks, Xero, and Wave are common invoicing software packages that provide significant functionality for minimal cost. See the Member Recruitment and Management chapter for more information. As Ben Sloan, founder of TinyDrumsticks, Corp., emphasizes:

Accurate and clear invoicing is essential. It provides an opportunity to demonstrate transparency to your customers, fostering trust and reinforcing your reputation as a fair and honest business. An invoice is more than just a bill; it tells a story, and simplifying each line item to ensure it is easily understood can have a significant impact. I diligently work with my managers to ensure our invoices are correct and clearly convey our message. In business, where money is often a point of contention, clear invoicing shows that we respect both our capital and that of our customers.

It is also important how and when you accept payments for invoices. In managing cash flows, you want to collect payment upfront or in a timely manner. Collecting cash or paper checks can lead to bookkeeping hassles and increased visits to the bank. With the rise in mobile and online payments, it is easy to accept credit cards, automated clearing houses (ACH), or electronic checks. Sites like Square, Stripe, PaySimple, and PayPal can be set up to connect directly to your merchant account.

When managing payments for your shared kitchen, it’s important to balance transaction fees with payment transfer times. ACH transfers, for example, often have lower fees but can take five to seven business days to process. Payment processors, such as QuickBooks Online, PayPal, and Square, typically charge around 2.75%-2.9% plus a small flat fee per transaction. You’ll need to decide whether to absorb these costs or pass them on to your members.

For a more integrated solution, kitchen management platforms like The Food Corridor offer software that not only helps manage kitchen bookings but also automates payment collection. The platform can track and process fees for kitchen usage, equipment rentals, and overages, streamlining operations. Payment processing is built into their system, and they can also integrate with accounting software, like QuickBooks Online, for smoother financial management.

Bookkeeping

Bookkeeping is critical in tracking present and future cash flows and provides the inputs for your financial statements, such as your profit and loss and balance sheet. You will want to create a ledger with the current balance of all your financial accounts. You can use Excel, Google Sheets, or professional software like FreshBooks, Wave, Xero, or QuickBooks Online to do this. Accounting software can automatically download and categorize your bank records, saving you time and making it easier to reconcile them. Using a scheduling and billing platform like The Food Corridor that integrates with Quickbooks Online can save additional time on bookkeeping.

Record all payments made from your accounts in your ledger and include the date, payee, category from your chart of accounts, and check number if a bank check is used. Create a schedule of all upcoming payments anticipated by the kitchen, including rent, utilities, maintenance/cleaning services, software, and staffing. You may also add one-time expenses like large equipment purchases or renovations. These are your accounts payable.

Next, record all incoming revenue that the kitchen receives for any reason using your chart of accounts. These are your accounts receivable. Do not include loans or investments in your profit and loss, as these are not considered revenue and will be reported on your balance sheet.

Review all your transactions and reconcile your ledgers with your bank statements consistently. If you are new to bookkeeping and financial statements, there are bookkeeping videos, training programs, and coaches who can help. If bookkeeping is not your strong suit, hiring a part-time small business bookkeeper or accountant can save you time and money by not having to recreate your ledgers or fix errors in the future. Your small business development center may also have resources to support you.

Financial Statements

Every kitchen should maintain financial statements for tax reporting purposes and for reporting to potential grant funders, investors, and lenders. Profit and loss or income statements show the operating revenues and expenses by category and the kitchen’s profitability for the tax year (or year to date).

The balance sheet shows the entity’s assets, liabilities, and equity at a given point in time, such as the end of the tax year. The profit and loss is used to understand how much the kitchen made while the balance sheet gives a picture of the company’s financial position and what resources it has available.

The cash flow statement shows how much cash flows into and out of the business. It is broken down into operating activities, investing activities, and financing activities, helping you see how much cash each activity generates or uses. Cash flow is different from profitability. Achieving positive cash flow is important for financial health and viability.

Sample Profit and Loss Statements

This sample annual profit and loss (P&L) statement illustrates revenue and expenses for a shared kitchen business model. In this example, the kitchen has yet to reach its demand-based utilization target of 60% utilization for the kitchen during peak hours and 20% utilization during off-peak hours (see example above). However, it has reached 100% utilization of its storage space.

Tracking Financial Performance

Like any business, it is important to track your kitchen’s revenues against your costs in order to ensure long-term financial sustainability. Track your performance by starting with the end in mind (your annual goals) and identifying your key performance indicators (KPIs), to get there. Reviewing your financial performance each month is standard.

Establishing standard reporting of these metrics over time will allow you to identify and address issues and ensure success in meeting your goals. Your most critical numbers should live in your balance sheet, income statement, and cash flow statement. However, tracking other performance metrics, such as utilization, member recruitment and retention, marketing return on investment, and payment timeframes (accounts receivables daily), can help you optimize your operations to meet your goals.

Start by asking what success looks like for your kitchen or organization. This may be the utilization rates of your kitchen spaces plus storage, the number of food businesses you support annually, the percentage of revenues coming from programs or events, and/or your outcomes (such as the economic impact of your programming on the community). Then, develop metrics and tracking to help you reflect on your performance and learn from your efforts over time.

Final Thoughts

Financial planning and management are key to ensuring the long-term success of your shared kitchen. By carefully forecasting costs, projecting revenues, and evaluating various operational scenarios, you can create a solid financial foundation for your kitchen. This planning not only helps you maintain day-to-day operations but also attracts investors and funders by demonstrating your kitchen’s financial viability. As you continue to refine your financial strategy, balancing costs with the evolving needs of your members and community will be critical to achieving sustainability and growth.

In the next chapter, we explore Funding Strategies , where we dive into the different options available to finance your shared kitchen. From impact funding, grants, and loans to tax credits and sponsorships, you’ll discover a range of opportunities to secure the capital needed to bring your kitchen project to life. Whether you’re working on launching your kitchen or scaling it, this chapter will guide you through how to evaluate the best funding sources and build a financial roadmap for success.