Dec 19 2008
Start a Restaurant
There are many options set aside for individuals looking to start their first business.
There are SBA Loans, Micro Loans, Personal, Minority Loans, Investors, Refinancing, and of course your family.
SBA Loans
SBA Loans are government loans set aside for first time business owners but, unless your credit is substantially higher than the norm, they will not assist you. This money, in my opinion, is set aside for people just moving into the country. It sets them up for success. If you are in this majority, good for you, if you’re not; like I was it was difficult.
Micro Loans
Microloans are just a little easier to get depending on your credit. You will receive a smaller amount than typical loans. Usually $25K-50K. These are also accessible through the SBA.
Personal Loan
Another option is a Personal Loan at your bank. Again, you must have great credit and when you tell them what the money is actually for, be prepared for a very lengthy speech.
A common misconception is that you must have a business plan with you when you go to the bank. In most cases, they will never ask for one however, if it’s concerning an SBA, have one with you.
Banks don’t like lending money for restaurants. It’s highly risky for them and of course most restaurants fail in their first year. However, I do want you to know that restaurants only fail due to lack of knowledge, it’s not just about the money.
Minority Loans
If you are woman, there are Minority Loans available. You can check them out at www.sba.gov or just put in minority woman business loans in Google and you’ll find a plethora of resources.
Investors
Investors can also be a good source however, please do your research. It may be easier to get your money from a family member. Use them as an investor.
Regular Investors will normally take more of a cut of the monies than you want to give up. They will want to put their 2 cents in even though they may have had no exposure to restaurant industry. They’re not all like this. Hopefully you can find a silent Investor.
A good Google term to search under in Angel Investors.
Refinancing Your Home
Refinancing your home. We are all aware of the present state of the housing market but, if you are one of the few that does have some equity in your home, this is a great way to go. I went this way and came out with over $60K. This is a great start.
Depending on the type of business you plan to open, it typically takes up to $150,000 to get you through a year of business. This cost includes: build-outs, inventory, plan reviews, licensing, equipment, small wares, tables, chairs, Serv safe certification, office supplies, credit-card processing equipment, lease money, and so much more.
If you plan on renting a location, you must have the funds for a deposit, first and last month’s rent, and about 6 months more of rent money while you wait for your plan review to be accepted by the Department of Business and Professional Regulation.
In this time, you need to make sure you have the money put aside for you to live. You may want to consider keeping your old job until the restaurant opens. I know it’s hard, and the excitement gets the best of you but, trust me you have to be smart about this.
I left my job a bit too early and I learned that this was not the way to go.
Nevertheless, I know that if you have knowledge and the patience to make your dreams of owning a restaurant a reality, it will happen. Don’t give up, there’s always a way.
