Which Vendor Should I Pay First: RESTAURANT EDITION

Listen, if we wanted to be rich, we’d have chosen a different career: like investing in cryptocurrencies. Just kidding (go ahead, blow up my twitter and tell me I’m wrong, I won’t answer, because I don’t care). Every year there comes a time when the restaurant sits empty and servers are bored, wanting to go home, playing candy crush on their phones, and slowly driving you insane. You’re burning cash, and every payroll hour that drags by your savings continue to melt away. We’ve all been there, it’s the slow season, and it sucks. Once money really starts getting tight, the question becomes: who do I pay first?


Cutting hours is one thing, but trimming pay and offering to pay employee’s “next week” is a sure way to get yourself in trouble. It’s also a great way to develop a reputation in the area that you really don’t want. Yes, Chad may be playing angry birds on his phone, and Brad might be eating all your food but you have to pay them. Cut payroll/shifts to the bare minimum, and take on a few shifts yourself, but never skip a payroll.

The Taxman (Department of Revenue)

Yup, you read that right. The government is number two here. Listen, you need to pay your payroll and sales taxes, but when push comes to shove, as long as you file your sales tax, you can get an expensive short-term loan from the government. Be careful here, you’re playing with a nuclear reactor, once you get too loose with the payments; you’ll get a face full of nuclear radiation. 

Insurance Companies

Insurance companies are really painful when you are low on cash. They’re not one to pay around with late payments. Once you’re 10-14 days late they’ll cancel your policy and won’t reinstate it without a painfully large fee. If it’s workers comp or health insurance they may not reinstate it at all, and you’ll have to go looking for a new policy.

Liquor Vendors

Some areas are worse than others, but chances are if you’re in a city, you do not want to mess with these folks. They talk to each other, and if you run up an overdue balance with one vendor, the rest of liquor companies will cut you off. It’s called being  “posted,” and its deeply embarrassing.  

Farmers (if you have them)

During the slow season if your in a bad spot, chances are farmers are in a worse spot. These folks work hard for their money, and while they don’t have power over you like liquor or insurance companies; they have their own bills to pay. While they could be lower on your list, they’re higher on ours.


You gotta keep the lights on. I know you’re probably surprised to see them this low on the list. Here’s the thing, it takes a LONG time before they actually shut off service. You can go 60 days without getting a notice, and then when you do, you probably have another 30 days after that. When the day finally does come close, pay the balance due with a credit card, and now you have 90-120 days before you have to pay the balance, probably enough to get you through those dark days.

Food Purveyors

You’re largest expense line is also one of your easiest to fool around with. Listen, food purveyors are a dime a dozen, and you can string them along for a few weeks before they start getting annoyed with you. Many of these purveyors know that it’s the slow season, and will even cut you a little slack. They get it. They’ll also let you know before they cut you off, so you have a chance to wire them money or pay via credit card. If push comes to shove, you can always switch to another purveyor in the meantime. It’s smart to have accounts open at a few different vendors even if you don’t use them much.

Everyone else

Boy, it's not great to be here if you’re a vendor. If you don’t depend on them to keep your business open, they can wait. They’ll call, they’ll be annoyed, they may even send you to collections, but it's your business that’s on the line, and if that means annoying another company that doesn’t experience this kind of slow season, tough.

If you read this and you are questioning the morality of this blog post, be my guest, but at the end of the day, the restaurant business isn’t easy. The seasonality makes life hard. The goal here is to not get yourself into this kind of situation, but sometimes outside economic factors don’t give you a choice.  At the end of the day, the most important thing to remember here is that this is a game of survival. During the busy season, it's remember that you need to stash away some money for the winter. It may be tempting to take a vacation at the end of the summer, but remember, it’s in your businesses best interest to have money for the low season.