When you’re considering opening a restaurant, funding is the first topic of discussion. Restaurant financing is the same as any other business financing in that you have to shell out a large chunk of money for start-up costs and work diligently over several years to break even. There are a handful of options for you when it comes to financing this special business endeavor, and you can draw from any or all of them in order to help finance your restaurant.
Out of Pocket
Saving your hard earned money for a business venture is both rewarding and difficult. You don’t have to completely deplete your savings account, but taking some of your own money and putting it toward your restaurant financing shows other investors that you are serious and have faith that this is going to work. No one else will put up money for you if you aren’t willing to do it yourself, and taking from your savings can be the incentive others need to hop onboard.
Loans
Securing a bank loan isn’t as frightening as popular opinion leads you to believe. Banks are willing to make an investment in you as long as you have the collateral and credit history to ensure that it’s a sound investment. Banks can offer more money than you may have in your savings, and that can be just enough to put you over the hump.
Friends and Family
There isn’t a more intimate way to obtain restaurant financing than by asking friends and family to chip in. You have a better chance of them believing in you and your dream, and they can attest to your work ethic and even physically help make sure your restaurant succeeds by volunteering or becoming employed. Everyone knows what a restaurant is and basically how it works, so you won’t have to spend as much time explaining why you need the money and what it is for.
Franchising
Although franchising means you won’t get your very own restaurant, you still get to have a place that is run and managed by you. Companies often offer good financing options for you to start up, and the support along the way is very helpful. You don’t have to worry about marketing and you come with a set customer base. This is a great option if you want to join a brand that you’re sure will stay afloat and be easier to run.
Cooking up a Plan
There are many different restaurant financing options available to you. The key is to make sure you are able to pay them all back with the agreed upon terms. Whether it’s replenishing your savings, making repayments to the bank or giving your friends and family back the money they lent you, opening your own restaurant starts with the money.