Another option for funding your start-up restaurant is receiving financing from investors. Restauranteurs often present their business plan before acquaintances within the industry and other willing parties. Gaining investors requires finding the right contacts and soundly proving your ability to make your new restaurant a success. Some tips for finding investors include the following:
- Present your operational skills. Many investors are impressed when the owner approaches them with tangible skills, such as culinary skills or a background in accounting. Any experience in the food service industry is extremely helpful as well, not only for your investing parties, but for your own success.
- Offer incentives. Usually, investors receive equity in the restaurant business. This means that investors share a portion of the profits from the business, but lose only their investment if the restaurant does poorly. Still, some restaurant owners recommend giving investors something valuable in return for their investment. If you are able to pay back a portion of the invested money at a decent interest rate, you may attract more investing parties. However, being locked into interest payments may present a hardship for a restaurant owner who is just starting out. Always look at what is best for your situation.
- Look for several investors. Instead of trying to find one or two investors to cover your entire start-up funding needs, look for several investors to contribute smaller amounts. This is usually more agreeable to potential investors and an easier sell for the restaurant owner.
Prospective restaurant owners often find that they are best able to fund their start-up restaurants with a combination of financing sources. For instance, restaurant owners may obtain their start-up capital from a combination of their own savings, an SBA loan and investor dollars. Many first-time restaurant owners need to try multiple avenues for the start-up capital they need, and it is not always an easy process. Although it may be difficult at first, perseverance usually pays off when it comes to securing funding for your new restaurant.
ON A SIDE NOTE, I STARTED A GROUP Everything Food Service. Please join. It will be anything having to do with restaurant leases, kitechen set up, recipes, planning etc!!
Part One Restaurant Owner in Attleboro,MA to Realtor in Attleboro, Mass
Part Two From Restaurant Owner to Realtor In Attleboro, Mass
Part Three Existing Restaurant or Vanilla Box
Way to fund a restaurant- Different finance options
CHEERS!
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