Write a business plan. In my next article i will be discussing the sources for raising money for purchasing a restaurant bar or club.
Before the recession hit in 2008 most restaurateurs financed their eateries through the u s.
How to get money to start a restaurant. The plan should include the amount of money that you ll need to make weekly monthly and yearly. However there are ways to reduce your expenses such as purchasing used kitchen equipment advertising your services on social media and getting food supplies from local farmers. It should include your overhead or what it costs to run the restaurant.
It s not easy to get the money you need to open a restaurant these days. Grants for restaurants are instead provided by corporations or in some cases state agencies. A liquor license for instance costs anywhere between 300 and 14 000 depending on where your restaurant is located.
Grants are traditionally reserved for nonprofit organizations and federal agencies are actually not allowed to issue grants to for profit businesses. 2010 fourth quarter issue 4 open a bar open a nightclub open a restaurant. Based on these factors the total cost of opening a restaurant will be 175 000 to 750 500 and up.
If you have no money and no business experience it might be a good idea to explore restaurant incubators in your area. This includes paying staff rent utilities cost of food and advertising. To help you with your financing options take a look at 12 ways to get financing to start a new restaurant.
There are several types of business financing that restaurateurs can rely on such as short term loans business lines of credit equipment financing and merchant cash advances. Pilotworks for example is a food business incubator allowing enterprising entrepreneurs to rent commercial kitchens in six cities. It will also help you develop your strategy and flesh out the feasibility of your restaurant s details.
Unless you have raised the appropriate money to start a business i would strongly recommend that you do not proceed to purchase a business. Opening a new restaurant requires a lot of planning and implementation not to mention an infusion of cash. Below are the main components of a restaurant business plan.
Grants to start a restaurant are rare. Start in a restaurant incubator. This is when people who have a lot of money invest in your restaurant.
Your first option for funding is finding investors to give you the money to open your business. An easy way to test drive owning a restaurant is to do some self catering jobs. Writing a thorough restaurant business plan is essential for reaching to investors and applying for restaurant loans to start your restaurant.
Expect to pay around 40 000 to 200 000 for kitchen and bar equipment. Start with a catering business. And you may have the best luck securing this type of funding from alternative online lenders.
How to get funding to start a restaurant.