So you’ve decided that being a restaurateur is your destiny. You’ve come up with THE PERFECT name, logo, location, and theme, and now you’re on your way to becoming one of the greatest restaurant owners in history! But there’s just one little snag before your big debut – Your start-up funds are nearly non-existent. . . What do you do? Take a little advice from Jenny Foster, owner of Senorita Burrita, of course!
The first thing you need to do when acquiring start-up funds is to figure out just how much money you need to raise.
While you may have location in mind already, you need to consider the costs of making that restaurant space yours! First, there are the basics like rent/lease, licenses and permits, insurance premiums, legal, accounting and consulting fees, and deposits on basic utilities.
Next come fixtures and renovations, furniture, office supplies, décor, a telephone system, and everything else required just to get your restaurant functioning. Then there are the REAL necessities - equipment, smallwares, disposables, and the ever-important starting inventory.
Oh, and you cannot forget about marketing costs – If no one knows about your restaurant, they will never come! Make sure to consider advertising and promotion costs such as printing and copying, postage, and entertainment as a bare minimum.
Finally, you will need people to run your restaurant – You cannot do it all by yourself. With that comes not only other salaries and benefits, but yours as well. And you may even need to purchase company vehicles to get you and your employees around.
Once you get up and running, remember those costs that will come before you even know it – replacement inventory, building maintenance, loan repayments, and all the other miscellaneous and unanticipated costs. Make sure you have plenty of working capital on hand as well to cover salaries and bills that come in before you start making money.
Now neither Jenny nor I are experts on most of these costs, BUT, I can tell you that we both have experience with restaurant equipment and restaurant supplies! For me, I write about them – for her, they are the key to her successful business. To help generate estimates for her restaurant equipment and restaurant supplies, Jenny went to a local restaurant supply store and hand-inspected the types of things she was interested in purchasing. Actually looking at and handling products helped her to determine exactly what pieces she needed to start Senorita Burrita’s and how much they would cost.
(Thankfully for you, WEBstaurantStore.com is your local supply store - we can be accessed anytime, anywhere! Check out our with Food Service Help and WEBstaurant TV sections to read buying guides and watch how-to and informative videos – It’s like having your own personal salesperson walking you through your purchases – Seriously.)
Anyway, no matter how you go about estimating your costs, at some point you will need to face the figures and start to raise the funds. For Jenny, she started out by asking friends and family for loans. Thank goodness for her, a good friend stepped up to the plate and served as her biggest investor – A real dream come true! For additional start-up money though, Jenny hosted fundraising parties and events which helped her raise a few extra thousand dollars.
Jenny also suggests using community resources like Community First Fund Loans to borrow money, but advises that it’s best to explore all other options before resorting to a bank loan (since they are typically more difficult to get approved).
After talking with Jenny, it was pretty clear that the most important thing to remember when getting start-up money is to be conscious of every penny you spend. This will help you trim the amount of money you need to borrow and reduce stress when you have to pay back the money you borrowed. Here are some more tidbits of insight that Jenny gave us to share:
Be sure to check out all 4 installations of the How to Start a Restaurant series!