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Opening of a restaurant? Know your financing options for business

The restaurant and restaurant industries can be described as completely unique without exaggeration. People who have not had the experience of working in a restaurant are struggling to see how hard it can be to find a concept that works while juggling tight profit margins and hours of work. ; bruising. Things do not get much easier when people start looking for business financing options to build or grow their restaurants. Bank underwriters are not trained to be restaurant loan experts and financial statements do not always tell the whole story, so the other aspects of the business plan and the homeowners' finances have to be in. an almost perfect order. Let's take a look at some of the considerations you may need to make before seeking financing or opening a restaurant.

Determine Your Concept

Before you can do anything else, you need to determine what you want the restaurant to be, serve and look like. If you are in a big city like New York, you will be faced with fierce competition in almost every conceivable category. In the data collected during restaurant inspections in New York, there were more than 90 individual categories ranging from Egyptian fare to Australian cuisine to coffee shops. Without a single concept and solid execution, it will be almost impossible to attract attention or create a customer base. Some new operators try their concept starting with a food truck or pop-up dinners at various locations. This is not free by any means, but it gives them the opportunity to try different things without the huge risks associated with buying space and hiring. A complete staff.

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Creating a business plan

If you want to optimize your options to finance your catering business, get organized. The first question you will get in a bank will be about your business plan. Are you looking to build your own space or to move into an existing restaurant? What kinds of foods will you be serving? Will your business be open all year or only seasonally? All of these things will be important to know before you can estimate any type of financing need, as they all affect the kind of construction, equipment and capital you will need. Restaurant business plans are a bit different from those of other companies, like startups, because you do not necessarily try to sell or sell, you want to manage your costs and build customer loyalty. Here, show that you understand product purchases, basic accounting and customer behavior. Banks will want to see that you have a roadmap for your business, but, more importantly, this document will help you stay focused on building, staffing and opening your restaurant.

Plan of Expenditure and Revenue

Ten years ago, some culinary schools taught 2% as a healthy profit margin to achieve. Things are improving now, with most research showing that many restaurant owners are bringing home between 7-9% after all bills are paid. These margins are still thin and very fragile because the costs of food and other things like equipment maintenance and utilities are constantly changing. Take the business plan and go a step further. What would be the cost of your menu if the price of corn or beef explodes by 20% tomorrow? What if your state changed labor laws to demand hourly wages instead of switching? It is important to remember that your only source of income is the sale of food, and the number of things (costs!) That it takes to produce these foods is staggering. Show that you can resist volatility while paying your bills (note payments) and stay in business.

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Put the commitment on the table

There are really only two types of restaurateurs: those who are ready for anything and who manage everything, and those who want to hire someone else to run the business. while enjoying the benefits of the property. If you are exploring your business financing options, you are probably not in the last category, but the rules are the same for both: the real success in the home comes from. intimate involvement and understanding of all aspects of the business. You will need to know how the dishes are prepared, how long the dishwasher takes to load a load, and what the health inspector will look for when he arrives. This level of expertise will help you show your bank that you are dedicated to the business and that you have the will to succeed.