See the poll below to participate in "Who Wants to Start a Restaurant?" It's interesting that of all the businesses that people want to open, restaurants are one of the most popular. If that is your passion and desire, you are probably wondering how to secure the start up capital.
There are many ways to fund your restaurant project. Some forms of financing are more difficult than others. First-time restaurateurs will often find it much more difficult to secure a loan than someone who has previously owned a restaurant or business. Lending institutions and investors have one thing in common. They do not want any bad dept on their record. Whether you secure a loan or not will depend on your ability to convince lenders and investors that your project is low-risk. How do you convince them? Have a great business plan. Make sure that it is evident that you personally have a great deal to lose in a worst case scenario. They want to know that you are investing some of your own cash. That is the key, along with your personal professionalism.
The people that analyze your business plan are highly astute in scrutinizing a business model. If there are any holes in your plan, they will recognize them and you will not get funded. Dress appropriately when going to an interview or meeting. Be professional. Demonstrate confidence, like you have done this many times before. Be prepared to answer questions with accuracy and intelligence about every aspect of your plan.
There are many ways to fund a restaurant.
• Self Funding
• Commercial Bank Loans
• Small Business Administration Loans (SBA)
• Venture Capitol
• Landlord Contributions
• Combination Financing
If there is real estate involved there may be more than one loan in the package. Most lending institutions and investors will want to separate the real estate from the business to protect assets. There are advantages and disadvantages to each of the funding options. I urge you, if your passion is growing to put a restaurant together, do your due diligence when it comes to your Business Plan and in securing funding.
I am writing a book to help you with all of this, which isn't quite ready. Feel free to visit my website ( http://www.nationalrd.com ) and contact me with questions. I love the restaurant business and am more than happy to help you get started the right way.
See the poll below...
Frank Stocco, Food Service Design Consultant
National Restaurant Design