Starting a restaurant is fun but also very costly. Startup expenses can reach hundreds of thousands of dollars — or even millions! Most people do not have enough capital to self-fund such an expensive proposition. Here are some things to consider:
1. Startup Expenses
Are you constructing from scratch? Labor costs, building materials, and real estate can cost a fortune. This is perhaps the most expensive route to opening up your own restaurant. If you are purchasing an existing building and renovating it, you will save a bundle of some expenses, but equipment, decorations, and furnishings can all cost a lot as well. Weigh your priorities and use your money wisely.
2. Cooking in the Kitchen
It is important to accurately calculate your operating expenses. Equipment costs, supplies and employee wages can add up quickly. Finalize your menu before purchasing kitchen essentials and making a deal with a food vendor. You also will need to launch a marketing campaign when your restaurant first opens.
3. Location, location, location
Assessing the potential location of your restaurant is critical not only for securing loans, but also for the future success of the small business. Sometimes, lenders deny financing to restaurant entrepreneurs simply because the location is poor. Be sure you have found the right spot.
Have a strong business plan that provides insight into the unique concept of your restaurant. The writing should be clear and succinct. Biz2Credit can help you prepare a business plan that will not only help you gain financial backing from lending institutions, but also help you prepare other people working with you in the restaurant.