Every new business needs to consider a realistic amount they need in order to get started and where the money will come from. For most this finance is to cover start-up costs such as leases, licences, insurance, stock, equipment etc plus some cashflow to cover bills and meet costs before your business is able to attain financial profitability. So where will you get the money from to start-up and run your business?
RECIPE FOR SUCCESS INGREDIENT CARDS
Ingredient 3: Restaurant Business Financial Profitability
QUESTION:
How to obtain restaurant business finance?
ANSWER:
Determine what your needs are. Consider how much and for how long you will require the financial assistance. How will you repay it? What is the purpose of the assistance? Is it short term to assist with cash flow or perhaps a longer term advance to purchase equipment, expand the business or increase stock?
Once you have determined your needs, investigate the alternative sources. Is your bank the most appropriate source from which to obtain the financial requirements for your business? Is there another source which would be more beneficial in the longer term? Discuss any financial issues with your accountant before applying for financial assistance. He or she will be able to assist you with your application.
Once several options have been chosen, thoroughly investigate each. What are the charges, hidden and up front? How much will the finance really cost you? What happens if you don’t require the facility for the time you specified? What if you want it longer?
Only after you have done your homework should you arrange a meeting with your prospective financier. You will need your business plan and the answers to all the questions you are likely to be asked. Consider what questions might be put to you – after all, why should this person lend you money? You must convince him or her that you are credible and worthy of a loan, have security upon which to base your application and be able to show how you will repay the debt.
Restaurant Business Financial Profitability
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