Financing Restaurant Equipment
Most restaurateurs work in the food service industry and graduate to open their own places. They learn on the job and rarely undertake any formal study, confining themselves to researching competition, scouring Yelp, Twitter, Instagram and Facebook for restaurant reviews and the internet for restaurant concepts, and ideas.
Is this you or are a newbie entrepreneur restaurateur, that is considering risking your retirement savings? Remember that risks also means the risk of failure? Then again Jeff Bezos said "I knew that if I failed. I wouldn't regret that, but I knew the one thing I might regret is not trying." Have you planned for the worse? Did you write a business plan? If you answered "No" then my second questions is the following: Do You Want to Be In Business Next Year? Writing a thoughtful business plan that operates your restaurant on paper will help you make important business decisions about your restaurant.
Many great restaurants and entrepreneurs with little money and a lot of creativity have found their way to success.
Some first time entrepreneurs discover that they will never be able to raise the projected start-up capital needed to launch their restaurant. Instead they kept their day job and started a scaled down operation and started honing their skills doing catering, opening a small food truck, one of my customers simply set up with a 75 pound propane deep fryer at a local markets and sold tasty deep fried corn dogs and curly fries with a homemade curry mustard and ketchup. He later used the profits from this venture to open his own storefront. Another customer opened up a small hole in the wall sandwich shop whose first days sales was $36. She persisted and grew the business to successful catering company that employs over 100 people.
Unlike oil and water, top entrepreneurs will use a combination of the funding sources: debt, equity, self funding, sweat equity and external funding from friend and family do mix well. Below are a list of funding sources.
Silent Partners can be ideal because they invest cash and have no say in how the restaurant is run. Unfortunately, they tend to be not so silent when you become successful.
Family and Friends
Doing business with family and friends can be a recipe for disaster. If you do seek money from make sure you get everything in writing and make sure that are not risking their retirement. In other words make sure that they understand the risks, but if they got the extra money to throw your way then why not take it. Another option besides asking friends and family is to put together a business fundraiser on Go Fund Me.
Using some of your own money to finance your restaurant will definitely make you like a serious business owner to investors. Just don't risk your retirement savings. All investors are going to want to see a business plan, estimated start-up costs, how much money you need from them, how soon before they'll see a return on their investment, how much they can expect to profit, and your vision of a working relationship with them.
Many suppliers offer Net-30 or Net-15 credit. This means that they will front you the goods and you need to pay them full in 15 or 30 days. Many vendors will require that you have a credit card on file with them so that they can charge your card on the 15th or 30th day. Remember your vendors want to see you success because you are their source of revenue.
Probably the best use of your business credit card is to use it cover your food costs. Having a cash back rewards card that pays you back 1 to 5 percent that you pay off before being charged interest is a great way to build your business credit rating. This may not seem like much, but if you are able to grow your restaurant to gross $1,000,000 and your food costs is $400,000 the savings alone is $12,000 which will got or your bottom line. Properly forecast how much and what your going to sell, purchase and receive according to your forecast, portion effectively, and control money, waste and theft and you can save another $12,000 plus dollars. Unfortunately, to many restaurant owners max out their credit cards and bought new restaurant and did not manage their food costs properly. Now they are know paying high interest, bouncing checks, destroying their credit rating and falling behind on credit card payments.
The restaurant industry is a risky business and banks can be extremely reluctant to lend money to first-time owner. Yes, it’s still risky even though the National Restaurant Association Forecasts 2019 Industry Sales Projected to Reach $863 Billion compared to its 2017 forecast of $798.7. Banks will look at your financial and business records, credit rating, business plan and experience to determine your ability to repay the loan. In other words they really don’t care about the growth of boutique restaurants. Banks will simply task you out its simply not worth your time or frustration.Ultimately, if you’re a first time restaurant owner, your better off Leasing Your Restaurant Equipment.
Leasing Restaurant Equipment
Finding restaurant equipment used to be tough for restaurant start-ups. They only wanted to finance. Banks only want finance established high-volume restaurants based on the restaurants invoices. Banks ignore many of the low dollars deals for the restaurant industry when the average deal size is between $3000 to $20,000.
The restaurant equipment financing companies that I work with offer low monthly payments you can afford. You can set up the best fit for your restaurant by financing your restaurant equipment for 12 to 60 months. Enabling to earn back your investment, maintain, steady cash flow, and build your business credit rating. Leasing Restaurant Equipment is 100% Tax Deductible Section. The IRS guidance under section 179 allows businesses to deduct the full purchase price for restaurant equipment financed. Most businesses are able to deduct 100% of the total equipment costs.
The dozen plus financing companies that I work with want your restaurant start-ups business and have financing programs that start as low as $500. I can help find a way to finance most of the equipment your offer. My name is Sean Kearney, my cellphone number is 206-419-5801 and my email is firstname.lastname@example.org. I am more than happy to answer your emails, phone calls, or texts morning, noon or night.