Finding the funding to grow your restaurant can be tricky, especially if you are not sure where to look.
For the significant investment funding should you be looking at a crowdfunding campaign, an investor with deep pockets, a venture capitalist firm or go for the old-fashioned bank manager approach? For restaurant businesses that are already trading and turning over more than £2500 per month via their merchant card sales, they could qualify for a merchant cash advance – specially designed for the hospitality and retail market where PDQ terminals are used daily. These are great cost-effective, quick cash, two-day turnaround situations. If you’re looking for investment (cash and experience) then read on.
If you require significant investment and you are looking for investment may be for development, property purchase or equipment financing there are loads of funding options available. Take a look at our sister website Capalona for more options and information.
Here are some tips and facts for those restaurant owners seeking to secure an investor.
So what do investors look for specifically in the restaurant market?
Investors look for obsession around the business owners brand and product. Someone’s obsession with their product is something rare. Investors know that business owners have strengths and weaknesses – usually, weakness is on the financials, and it’s something they can bolster with immediate effect.
The business needs to be scalable too. The brand and concept need to be so strong with the power to grow at a steady pace. Whatever your business is it needs to have a point of difference – or several points of difference. Are customers choosing your brand over other restaurants already?
Investors don’t invest easily – they will look closely at the business plan, possibly work with you on it before investing to make sure they are investing in something that fits with them too. An investor who may just front up the cash and let you get on with it could be the biggest mistake you make. An investor with credible experience, who has been there and done it before is the type of investor to seek.
The investment should also offer you (the founder) an incentive to retain a decent stake. If the company hits specific targets, then you claw back agreed equity as a reward. This keeps your heart and mind on growing the business of course – and in return offers the investor the peace of mind that you won’t drop out of the deal.
Restaurant Investment Tips to focus on:
Brand Stand out – your restaurant brand needs to offer something that offers stand out. Good food alone won’t be enough.
Obsession – be passionate about your business and every detail of what you offer.
Take advice and be open – listening to those that have been there and done it can be invaluable. Restaurant Expos are great for this type of talk.
Realistic – restaurant businesses don’t usually generate massive valuations – be realistic to its worth.
Hard work – be prepared to work, investment is the easy part.