Tips to Start Your Restaurant

Lots of people dream of starting their own restaurant, but very few people can do it with just the cash and assets they personally have available. A restaurant is not the kind of business you can start on a shoestring, or easily bootstrap you way into a bigger operation. As a result, the financing of a restaurant startup is often the most challenging aspect of getting started for any entrepreneur looking to get into this field.

The first step in any financing plan is to have a very well thought out restaurant business plan. You can’t begin to finance a project of this magnitude without a very good understanding of what you are actually going to end up getting. Well, you can, but the results are almost always a disaster!

Equally, or maybe even more important in some cases, is a financial plan that shows you the exact cost you will incur to launch your restaurant, including not only the cost of getting to the point of opening the doors, but also the amount of additional capital required to keep the doors open until you reach the break even point- where the business generates enough cash to pay all its bills every month.

Once you have your restaurant business plan and some carefully crafted financial projections in hand, you can begin evaluating your options for financing. The first place to always look is your own funds. Not only are these the easiest to get, but few other people are likely to put any money into your restaurant if they know that you yourself aren’t investing in the business. Continue reading…

So you want to start your own restaurant business but your worried you can’t raise the finance you need to set your business up, if so this article is for you. I will cover the different options that you may want to think about where you can get finance for your new restaurant business, the following are: -

· Your friends and family - you may think this is the best option if they have the finance available for you, but you have to remember they will only have a certain amount of money available and proberly wouldn’t be able to give you more if you ran into trouble and also you may feel bad not being able to repay them as quickly as you thought you might be able to, as making a profit in a business can take a good year or even more. You will also have to discuss what interest you would give them, all this may cause problems with your relationships with the person or persons is it worth it, give it a thought.

· Your savings - if you have a good amount of savings you may be able to use them for your new restaurant business, it depends on the amount you have saved. This amount may run out quickly and if it does you would have to have a plan b in which you could get finance from elsewhere.

· Credit Cards - they offer you money to buy items but if you wanted cash from these they usually charge a daily interest rate for this. Credit cards also have a maximum limit on these depending on your credit history this might be only £3,500 and this wouldn’t get you far in setting up your business so you would have to take out more than one card, but also you have to pay a minimum amount every month and when your setting your business up and have no income coming up you may not be able to afford the minimum payments every month.

· Home Equity - using your home as equity can be a very risky, what happens if your business doesn’t work out the way you think it would and you couldn’t pay bills etc. your house may be taken away from you leaving you with no house to live in, you need to seriously think this one through is it worth the risk? Continue reading…

I’m often asked: what is the best way to finance a new business venture. This question is usually followed by “So, do you ever invest in new business ventures?”

The answers, respectively, are: 1. there is no “best” way to fund a new business; and 2. I do invest in new business ventures, but darn it I can’t today because I left my checkbook in my other suit.

The truth is there are a variety of ways to finance a new business and which way is best for you depends totally on your product, your market, your financial requirements, your burn rate, and most importantly, your personal and financial situation.

So with that in mind, here are a few of the most common ways to finance a new business without hitting old Tim up for a loan. Keep in mind that all methods have pros and cons and some (or most) may not work for your specific situation. No matter what financing method you choose thoroughly investigate the ups and downs and don’t jump in with both feet until you’re sure you’ll land on solid ground.

Savings and Investments

The first source you should consider tapping is your own savings and investments. I’m a huge fan of self-financing when it comes to business because it doesn’t make you responsible to others should the business fail. The bad thing is that it if things do go under, it will be your money that goes down with the ship. If you’re not willing to risk your own capital you certainly shouldn’t be willing to risk anyone else’s.

Friends and Family

After tapping their own savings and investments, many entrepreneurs turn to friends and family for help. This works well for some, but here’s the creed I live by: NEVER borrow money from anyone you have to eat Thanksgiving dinner with. Nothing causes tension in a family like lending money that is never paid back. And notice I say “lending money” rather than investing money. Venture capitalists invest money. Your relatives lend you money. They will expect it back someday even if they say they won’t. Remember, when a loved one invests in your business they are emotionally investing in you. It would be tough to tell mom and dad that their favorite son lost their life savings because his business went down the drain. Continue reading…

When it comes to financing your restaurant business, there are several ways you can go. Banks and commercial lenders will ask that you put a portion of your own money into your restaurant business, before they will think about lending to you. You will fare better if you have experience in the restaurant business, the stronger, the better. If you have a strong background working in a restaurant, you should be able to get your loan without too much red tape. If you do not have a great deal of experience, you may want to gather more by taking a job with a restaurant. You may also want to take a college course in restaurant management.

You can obtain financing several ways.

• The Small Business Association– they have several regular and specialty loans to suit your particular situation.

• Your own money– IRA accounts, home mortgage, personal savings and other assets, and friends or members of your family.

• Angel Investors– private investors who will lend money for small and large business ventures. There is quite a large group of Angel Investors in the United States. You can find them at the angeldeals website, and by networking with those who have started a business of their own.

• Commercial financing companies, banks, and other lending institutions, public and private.

• Friends and relatives– when you borrow the money from relatives it can be a pretty touchy business. Make sure you keep the loan on a business level, make sure you have legal papers drawn up stating how the loan will be repaid, and how much interest will be paid.

• Home mortgage– depending on how much equity you have in your home, you may be able to obtain a mortgage to finance your restaurant business.

• Life insurance policies– You may have monetary value built up in your life insurance, and you are able to borrow against the cash value and pay a lower interest rate.

• Government programs– In the right circumstances, the office of Housing and Urban Development (HUD) will give loans to restore a building. They will not provide a loan to finance your restaurant business, but they will lend money to renovate. HUD’s loan application asks you to describe your business plan. This statement will include an idea of how much income your business will bring in within a certain time, show when you will need to draw cash from the loan and how that cash will be used, and you will be asked to explain how you would repay the loan. Continue reading…

Business start up loans- an assurance for financial assistance for establishing new entrepreneurships. If you personally desire for setting up your own venture, you can take the help of these loans. With these loans, you can easily finance your new production.

Business start up loans are available in two forms-secured as well as unsecured. If you want to arrange money in the secured way, you will have to place something against the lending amount. Usually, the right of a security is kept with borrowers until the amount is repaid fully. Borrowers can use their any valuable asset as security. One can use his home, other real estate, automobile, jewelry etc. as a security. Here, it needs to be mentioned that if your security is more worthy than the lending amount, it will ensure you about getting a higher amount. On the other hand, in case of choosing the unsecured option, borrowers are not asked for pledging anything against the lending amount. This option offers tenants as well to finance their business.

In case of secured option, the interest rate is lower, as these loans are secured on borrowers’ property. But, it increases the probability of collateral repossession. Though, unsecured loans are available at a higher rate, but such kind of risk is absent in this option. Due to this reason, not only tenants, but many home owners also prefer to capitalize their business with unsecured option.

However, as business start up loans, borrowers can avail the amount, ranging from ? 5000 to ?100000. Based on the borrowed amount and lenders’ policies, the repayment period is determined. In general, this period is decided in between 3-25 years.

Normally, before offering business start up loans, lenders try to verify the business type, borrowers’ repayment capacity, sustainability of the business etc. Therefore, enclosing some necessary documents with the application form is necessary. These are like,

•A brief about the business, which should be mentioned clearly

•Required amount should be mentioned Continue reading…

Running a small business can be a difficult undertaking luckily there are a number of ways you can receive help that you may not even have to worry about paying back. The government offers a number of grants to small businesses to do a variety of things in order to increase the chances of that small business succeeding. The first thing to do is check and see if you qualify for any grants. One of the ways to do this is to check with the chamber of commerce or the better business bureau.

These locations may have information on grants that can help out small business owners who are looking to set up shop in that area. There are many areas that offer grants to small businesses just to get them to open up or they may be offered in order to keep a small business alive within a given area, which may be suffering from a lack of businesses. You can also check with a number of websites, which can list grants that are available to small businesses within your area. The types of grants vary. There are grants for equipment, rental expenses, there are even some grants that can help to pay employee expenses such as for benefits or can help you with your living expenses if you are a single employee business. Continue reading…

Small business startup loans aims at providing financial help to people who want to start their own small business. Small business startup loans can be availed by both good credit holders and bad credit holders. It is basically of two types, secured and unsecured. To avail a secured small business startup loan you’ll have to place one of your properties as collateral against the loan amount. This can be any of your personal property like car, jewelry, bank balance or can be your commercial property also. On the other hand you don’t have to place any collateral in order to avail an unsecured small business startup loan, but the interest rate is slightly higher compared to secured small business startup loan. The loan amount that can be availed with small business startup loans ranges from £ 5000- £75000. The loan amount depends upon various factors like credit status, repayment ability, value of collateral etc. The repayment duration of small business startup loans is quite flexible and ranges from 5 - 25 years. The interest rate of small business startup loans is quite low. You can further lower it opting for secured small business startup loans. Lenders charge slightly higher interest rate from bad credit borrowers due to the risk factor.

There are certain prerequisites fro availing small business startup loans. These are

1. Business profile document- you will have to mention all the details regarding the type of business you want to start, what are the requirements, your plans to make it successful venture etc.

2. Loan request document- in this document you will have to mention the details regarding the type of loan, amount of loan, period for which you want to avail the loan etc. you can also mention any special perk that you want in this document. Continue reading…

What is the biggest problem facing business owners? It’s simple. Not enough money. Money is the lifeblood of business. The goal of creating a business is to make money, but before you actually make money, you need to spend money.

You need to spend money to get started. Depending on your business, your start-up costs can range from minimal to enormous. An internet business doesn’t take much to get started. A brick and mortar business requires substantial capital investment. Buying a franchise can cost tens of thousands of dollars. Whatever your business, you need money to get started. Most businesses start out undercapitalized and never catch up.

You also need money to run the business. “The cost of doing business” is more than a phrase. It is a harsh reality. You have to pay for facilities, personnel, sales, marketing, advertising, supplies, licenses, taxes, fees, and myriad of other expenses. Most businesses start out anemic and end up bleeding to death. There is simply not enough money to create a profitable business.

So what do you do? You can apply for bank loans and venture capital. You can borrow money from friends and relatives. You can use your own money. Each of these methods has advantages and disadvantages.

One of the easiest and most effective ways to get money is to use cash advances on credit cards. Yes, the interest rates and fees are high. But it all becomes a matter of economics. If a cash advance keeps you in business, it buys you time to create a profitable business.

How do you get lines of credit on credit cards? One of the most important business decisions you can make is to set up a business structure that will allow you to build business credit.

One option is to do business as a sole proprietor. This is a truly risky proposition, since you are mixing your personal and business finances. Under a DBA business structure, you cannot build corporate credit apart from your own personal credit. A failure in the business means a failure in your personal financial life. Continue reading…

Many would-be entrepreneurs who are long on vision but short on capital think that “angel” investors are the way to go for start-up capital, and they very well may be. Before approaching them, here are 10.5 things you should know:

• 1) Angel investors generally participate in the early stages of a company’s growth; they will plan an exit strategy to recoup the capital they have invested within 3-5 years. At that point they expect their companies to have enough of a track record to be able to attract capital from sources that can invest a greater amount but are more risk-averse; for example, though a sale of the company. This may be through a public offering of shares (an Initial Public Offering, or IPO). Angel investors will typically sell their shares in your company at that point.
• 2) They want to make money and will cull over many proposals to find companies that they feel will be successful. Even so, they are realistic enough to know that not all of their angel investments will succeed. The success rate is typically around 30-50%. Therefore, they try to balance long shot investments with those that are more likely to succeed.
• 3) Unlike venture capitalists, they are often motivated not only by the prospect of making money but also by the desire to be involved in the operations of their companies as advisors or mentors. Often angel investors are people with management expertise themselves; they may want to nurture the growth of their companies by participating in such management activities as strategic planning or marketing.
• 4) They will want to know a lot of things about you and your proposed venture, foremost among them whether you have put your own money into it: have you, or are you willing to, take out a second mortgage on your house to fund it? Have your friends and family invested in it? In the language of angel investors, this is known as “having skin in the game.” If you can’t answer yes to these questions, they will probably conclude that you don’t have enough confidence that your idea will succeed in the marketplace to put yourself on the line. Why, then, should they have enough confidence to invest in your venture?
• 5) To a certain extent, they will expect you to understand the limits of their knowledge: what they know and don’t know, and to present your proposal accordingly. One of the things they will probably not know is the extent to which your idea is unique and protectable - particularly if it involves intellectual property, as many new companies do today. Speak to these issues without prompting.
• 6) They look for certain personal characteristics. Have you shown that you have integrity? Do you communicate clearly? Listening, which is perhaps better called “hearing,” is both a necessary and rare skill. And express yourself in a lucid fashion; this includes speaking English to them rather than the language or jargon of your field or its technical details. Continue reading…

• 6 Ways To Fund Your New Business
• Seven Alternative Sources of Capital for Setting Up a Business
• How To Finance Your Restaurant Business

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According to a report recently released by the Census Bureau of the Department of Commerce, minority-owned businesses grew more than four times as fast as U.S. firms overall. Since 1992, these businesses have increased from 2.1 million to about 2.8 million firms.

Part of the reason for this unexpected growth is because the government is making more grant money available.

Minority Grant Money is a type of funding given to deserving individuals belonging to a minority. The funds may be for the purpose of fostering education, benefiting a community where most of the population is made of minorities, and generally facilitating development in every avenue.

Grant money may also be given for projects, or for things like research, scholarships, or seed money. A project or a program is a creative plan of action that has a specific goal, usually community-based. Grantors generally want to fund new and innovative programs. So if you have a new program in mind that has never been done before and designed to help forward the cause of minority groups, then its possible for you to get government funding for that program.

However, if you feel that your idea is not innovative enough, take heart. There are instances where grant money is used to fund programs that have already been implemented. The only criteria, in this case, is that all previous programs similar to yours should have proven successful.

Info: Minority small business grants can assist in starting a new business or maturing an existing business. There are several small business grants available that are strictly for the minority population including the disabled, elderly, and women.

If you are an small business owner that is a minority and you are looking to obtain one of the small business grants you need to be able to tell them how your business would survive if you didn’t get the grant. The minority small business grants board will be looking for a three to five year business plan from you. They will want to see where you have been and where you plan to take your business.

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