So you want to start your own restaurant business but your worried you can’t raise the finance you need to set your business up, if so this article is for you. I will cover the different options that you may want to think about where you can get finance for your new restaurant business, the following are: -
· Your friends and family – you may think this is the best option if they have the finance available for you, but you have to remember they will only have a certain amount of money available and proberly wouldn’t be able to give you more if you ran into trouble and also you may feel bad not being able to repay them as quickly as you thought you might be able to, as making a profit in a business can take a good year or even more. You will also have to discuss what interest you would give them, all this may cause problems with your relationships with the person or persons is it worth it, give it a thought.
· Your savings – if you have a good amount of savings you may be able to use them for your new restaurant business, it depends on the amount you have saved. This amount may run out quickly and if it does you would have to have a plan b in which you could get finance from elsewhere.
· Credit Cards – they offer you money to buy items but if you wanted cash from these they usually charge a daily interest rate for this. Credit cards also have a maximum limit on these depending on your credit history this might be only £3,500 and this wouldn’t get you far in setting up your business so you would have to take out more than one card, but also you have to pay a minimum amount every month and when your setting your business up and have no income coming up you may not be able to afford the minimum payments every month.
· Home Equity – using your home as equity can be a very risky, what happens if your business doesn’t work out the way you think it would and you couldn’t pay bills etc. your house may be taken away from you leaving you with no house to live in, you need to seriously think this one through is it worth the risk?
· Bank Loans – you may be able to take out a bank loan if you have a good credit history, the amount you may be given is up to this and therefore it could be a few thousand pounds but it could be a lot more like fifty thousands pounds. Interest would be calculated every month and it depends on the company on how high this may be.
· Angels Investors – business angels can give you from twenty five thousand to up to two hundred thousand pounds depending on how many angels group together if this is possible for your business. The angel or angels will provide financial backing for you at the correct time and will give you advice but won’t be involved in the running of the restaurant on a daily basis. Be prepared as they will want a good stake of the company so they can get the money back they invested and more, but they can be very helpful as they may have done the same or similar to you only a few years ago and made a success of their business enabling them to help others out.
· Venture Capitalists – they provide financial backing for your new restaurant business but also help you sort out how to run the restaurant and help make important decisions etc. They will also want a good return for their investment like the business angels.
All of the above are options available to most people and I’m sure whatever circumstances you’re in you will find appropriate funding for your restaurant business.
By: Jene Pedder
Posts Tagged Start Business
Are you considering becoming a Wedding Planner but unsure what finance you will need to start your business, this article will cover some areas in which you may need finance for as well as where you may be able to get the finance for if you don’t have the money yourself.
You following points are the places where you may need finance to help your wedding planner business startup: -
· Renting building space – to set your business up you may need a room or rooms in which you can meet and greet your clients and suppliers. You may also have products to sell to your clients, which you might want to display in cabinets or on shelves. If you have a place for clients to visit the business will seem more reliable as many clients don’t just want to view a website but also want to meet and visit their place of work.
· Stock and Equipment – you will need a computer and access to the Internet if you want to be a wedding planner. The Internet has lots of useful information, suppliers of everything you will need for a wedding. A wedding planner will need to buy files and folders to keep any information a couple give them and any other ways to keep information stored.
· Staff – wedding planners usually start their business off by themselves but if their successful and begin to get more and more clients they might want to employ a few staff to help carry out the research in the up and coming months and also make sure everything runs smoothly on the day.
· Insurance – you should take out insurance not only on the building your using but on the work you do, just in case someone isn’t happy and they file a lawsuit against you, always best to be careful and take precautions just in case.
· Marketing – every business needs some kind of marketing, if no marketing is done there’s more of a chance that you may fail as a business. You need to market your business in wedding magazines, newspapers, have your own website and market it well using search engines and also let any bridal shops and suppliers know who you are and give them leaflets to hand out to there clients if possible.
· Hidden Costs – the hidden costs may be transport costs, traveling from location to location from your base to the clients home, from their home to the church or reception. Your traveling costs could be quite a lot.
So now you know where you may have to spend money to get your business running smoothly. Now you may be worried where are you going to get the money from to start your business up. There are many different financial options for you to consider these are:
· Friends and Family
· Bank Loans
· Credit Card
· Home Equity
· Business Angels
· Venture Capitalists
Each different financial option has different good and bad points. Friends and family may not have all the money you need, if they do you really want to borrow from them? A banks loan charges high interest and you will need to show a detailed business plan, a credit card may not give you the whole amount you require so you would have to use more than one and this can be costly, using your home as equity can be a bad gamble if your business doesn’t take off, business angels and venture capitalists take a share of your business, they give you the finance you need and help you with making your business successful.
By: Jene Pedder