Opening a restaurant is not exactly an inexpensive endeavor. In addition to renting or buying a location, you need equipment, tables and chairs, ingredients for your dishes, a team of employees, and a myriad of other supplies.
Unless you have a great deal of money saved up or recently won the lottery, you will need to find ways to bring in an ample amount of money. To help raise the finances you need to fulfill your dream of owning your own restaurant, consider the following five effective ideas.
1. Get a Loan from a Bank that is Experienced in Restaurant Loans
One way that you can get financing for restaurants is to apply for a business loan. When shopping for a bank that can assist you, look for one that offers loans that are specifically designed for the restaurant industry.
For example, Western Alliance Bank features Franchise Finance Solutions that are ideal for quick-service restaurants along with fast-casual, casual, and chains. Through this loan program, restaurant owners as well as franchisees can secure financing for acquisitions, lines of credit, and refinancing through real estate term and business value loans.
2. Look for an Investor
Another restaurant financing option is to find an investor who has deep pockets and shares your passion for great food. If you feel comfortable borrowing money from a friend or family member, this could be an option that probably will not include high-interest rates. You could also work with what is known as an angel investor, which is a person who provides startup owners with funds in exchange for a portion of the company’s equity or royalties.
3. Consider Crowdfunding
While you might associate crowdfunding websites with helping people raise money for medical bills or similar emergencies, they can also be an effective way for entrepreneurs to raise capital for their businesses. GoFundMe and Indiegogo are two of the most popular; the former has fairly low fees and you can get the raised money pretty quickly, and the latter is more focused on start-ups. As a bonus, you are not required to pay back any donations, so you will not be saddled with a lot of debt as you open your restaurant.
4. Take Part in Community Events
Many communities host events throughout the year that features food trucks and food vendors selling their tasty offerings to the public. Taking part in these events can definitely be a win-win for you: in addition to putting the profits you earn toward opening your restaurant, you will also help build up your customer base. Choose a few dishes that are easier to take “on the road” and enjoy meeting members of your local community while raising some additional capital for your new restaurant.
5. Use a Credit Card that Gives Cash Back
From the “every little bit helps” department, apply for and use a business credit card that gives you a percentage back every time you use it.
This way, as you purchase expensive equipment, inventory, and other supplies, you will earn “free money” that you can put toward your restaurant. For instance, if you buy $20,000 with the card and it gives back 2%, that is $400 in reward money that you can use for other restaurant-related expenses.
Financing for Restaurants Can Make Your Dreams a Reality
While the amount of money needed to open a restaurant may seem daunting, do not let it discourage you. Instead, look at the various options for securing financing for restaurants that are available—everything from a loan to an investor, crowdfunding, and more—and select the methods that are best for you.
In no time, you will be celebrating your grand opening and serving customers your delicious food and beverages.