Resturant Business

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Permalink Reply by Ultimate Juice Man, Gregory on July 29, 2008 at 10:52am

I looked into a brick & mortar busines once and was told to put together a business plan and then take the business plan to the bank. The bank will look at a small business loan.

If you have a college near they sometimes have a business dept where students will take it on as a project "Business Plan" for you. With the credit crunch it's getting more difficult to start a brick & mortar business. Check out my profile, $35 is what it takes to get a membership.

Hope this helps

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Permalink Reply by Norris Wilcox on July 29, 2008 at 11:49am

Thanks for your advice I never thought of that with the schools I guess i need to
put a business plan.

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Permalink Reply by SUp.biz, COO on July 29, 2008 at 3:36pm

There are several ways to go about this, and I’ve run through some of your options below:

1) Business Credit Cards
The Google founders (Sergey Brin and Larry Page) maxed out their credit cards, and if you have good credit, may be your easiest option.

2) Savings / Retirement Funds
You can draw on savings. I can’t tell from your question, but if you have no full-time employees, you may be eligible to set up a Solo 401(k) (also called an Individual 401(k) or Self-Employed 401(k)). You can transfer the funds from your retirement accounts without penalty into the Solo 401(k) and borrow up to $50,000 or 50% of the balance (whichever is less).

3) Home Equity Loan
If you own a home and are confident in your business, this is a simple way to obtain a sizable amount of funding.

4) Government Loans
Check out www.sba.gov and www.score.org.

5) Lines of Credit
If you have a good credit rating, you may be able to secure a line of credit, which you’ll be able to use by writing checks against it or by using a credit card for that account. The line is usually revolving, such that the amount available to you is reduced as you use funds, and increased as you repay funds. You can use the funds as needed, and interest only starts to accrue when you use the funds. Typically, a bank will demand a personal guarantee from you.

6) Letters of Credit
This is different than the line of credit discussed above. Here, the bank gives a vendor a “letter of credit”, which is simply a written guarantee that the bank will pay a certain obligation if you fail to do so. You don’t receive or have access to funds unless you fail to make a payment, but letters of credit are useful in a variety of ways, including getting the hardware you need on a reasonable payment plan from a vendor.

7) Long-Term Debt
This is a loan that is over one year long. It can be unsecured, or secured by collateral such as accounts receivable or inventory. A loan secured by your accounts receivable is often a good option for young rapidly expanding companies.

8) Angel Investors
Your business might get funding from “angels,” which are wealthy people or groups of people looking to invest in an emerging business.

9) Venture Capital
If angels aren’t an option or don’t offer sufficient capital, you might explore venture capital. Venture capitalists will take equity in your company. If this is your first company and you don’t have venture capital contacts, it will be difficult to get a meeting. As a starting point, you will need to prepare a presentation and executive summary, then get a list of venture capital funds, identify those that make investments in businesses like yours, and choose the particular partners within the funds that more narrowly focus on businesses similar to yours. It is a challenging project.

I took this from StarLawyer's Response to a Question in the Finance Section.

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Permalink Reply by Chuck Bartok on July 30, 2008 at 9:52am

Norris,
We have enjoyed the food service business off and on for years. It is a
time invested business and must be managed by one with
a PASSION for the product and be willing to
totally immerse in the daily operations.

My suggestion is to seek a TOP management position with a
"retiring" restuaranteur, rather than seek Small business loan in this Economy.

Besides you spend too much on the Dummy Tax of Interest
rather than
INVESTING in you business.That position is not considered in the Vogue,
but aviding Borrowed money has allowed us to Build and earn comfortably,
with our Biting our nails.

Whenever I took borrowed Capital things just seemed to "go south"

I have guided a few clients through the process of "taking over"
Improving the environment and eventually Buying out with excellent terms..

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Permalink Reply by Chuck Bartok on July 30, 2008 at 9:54am

Also Norris, should you desire to pursue
Loans, we can help on you business plan and most importantly
Solid Cash Flow projections, based on some
real data.

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Permalink Reply by Janis Pettit on July 30, 2008 at 11:18am

Although I'm currently a small business growth and marketing coach, I've owned 2 successful restaurants and I can tell you that the idea is much more glamourous than the reality.

Forget about bank or SBA financing--they won't even look at start up restaurants. If you have a following, you may find some friends or clients that are willing to invest. This is the way many start. If not, you might consider looking at a franchise. It's easier to get financing for a franchise with a proven record of profitability.

Be prepared to work 80 hour weeks to start. Also do a well thought out business plan first. Your profit margin will only be around 10%, so if you gross $500,000 for example, you'd be taking home around $50,000. Also, I'd recommend picking the brains of successful restaurant owners in your area for tips and resources.

Good luck!

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Permalink Reply by Norris Wilcox on July 31, 2008 at 10:51am

I would like to thank everyone am learning a lot with the comments things i never thought of very good advice thanks to everyone

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Permalink Reply by Bart on October 5, 2008 at 6:29pm

your bank perhaps con help you with your small business loan.perhaps..

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