How do I open up my own restaruant and get financing?

Answer 1

The best routes to take are to research the process of starting a business as well as the industry you're interested in.

I recommend checking out the SBA, Entrepreneur, The Start Up Journal & Nolo. All 4 are great informational resources for the new/small business owner. I posted links for you in the source box.

Associations may be a good avenue to explore. These organizations will address many of the thoughts, questions and concerns you'll inevitably have as well as many you haven't anticipated yet. See the source box for some relevant links.

Research, research, research – this cannot be stressed enough. Read as much as you can about the industry. Here are some book titles that are relevant:

* The Restaurant Business Start-up Guide by Paul Daniels
* Restaurants That Work: Case Studies of the Best in the Industry by Martin E. Dorf
* Restaurant Financial Basics by Raymond S. Schmidgall
* Opening a Restaurant or Other Food Business Starter Kit: How to Prepare a Restaurant Business Plan and Feasibility Study by Sharon Fullen
* Upstart Guide Owning & Managing a Restaurant by Roy S. Alonzo
* The Restaurant Managers Handbook: How to Set Up, Operate, and Manage a Financially Successful Food Service Operation by Douglas Robert Brown

There are plenty of free informational resources out there. Check the source box for links to articles.

Hope that helps! I wish you much success & happiness in all your ventures!

Answer 2

The following are steps that you must take when starting new business:
1) Choose your Business Name
2) Create Business Plan
3) Choose Business Structure and register your company
The following table will help you to make a decision about business structure: http://www.blquest.biz/business_structure.htm

DBA is the cheapest one. But it is the worst way to save money. In taxes and liabilities you will pay more down the road. Partnership is another disastrous option. Chose between LLC or Corporation. For the restaurant I will go with Corporation.

4) Apply for Employer ID Numbers (EIN) with IRS. http://www.irs.gov/businesses/small/article/0,,id=98350,00.html

5) Establish your business:
•Obtain all necessary licenses
•Open physical location for your business. The best approach is to find a good commercial realtor. The realtor will help you negotiate the best lease possible. And can also suggest the best place to open the store.
•Order business phone lines, fax line, 800 numbers and other communication tools
•Order business website and e-mail
•Open business account with your bank. Try to have an average daily balance of at least $1,000
•Establish trade references. You can start with the business credit cards.
6) Apply for Identity Theft Protection with PPL. Having business without affordable legal assistance is an expansive option.
7) Enroll your business in Better Business Bureau after 6 months of existence.

As for a small business loan.

Create business plan. It must include projections for at least 2 years.

Make sure you have 20% - 30% down payment

Make sure you have collateral. The following is the formula to calculate collateral:
Collateral = (Personal Real estate value*0.8 – Mortgage) + Commercial Real Estate Value * 0.8 + Equipment value *0.5 + Inventory *0.1

Make sure your credit score is 680+.

Make sure you have relevant experience. Banks will never finance career change.

Collect all necessary financial documents:
1)Personal tax returns for the last 3 years
2)Business tax returns (for existing business) for the last 3 years
3)Profit And Loss statement year to date

Find local bank that will finance your business type (VERY IMPORTANT). Call first and discuss your needs in details. Not every bank will finance restaurant as it considered a very risky business. Call your local banks first and ask them if they do restaurants. Deal only with one that will give you a positive answer.

Complete loan application – make sure there is no arithmetical errors, mistypings and all personal financial information is correct.

Submit the complete package – all documents that were requested by the loan office, in the order that was requested to the bank.

Good luck,
Marina Lando
President
Business Loan Quest
http://www.blquest.biz

Answer 3

When it comes to financing you need to create a financial plan to introduce to the bank or investors that will provide the monetary funds for your restaurant. Depending on whether or not the agree and approve of your plan influences their decision on financing your plan.

As for opening up...well...it depends on what kind of restaurant you want to open up. Either a "Mom and Pop Diner" or a franchise like "Denny's" or "McDonald's" Now the benefits on franchising is that everything is set up for you, but the mother corporation will charge a fee, usually based on a percentage of your net profits. The benefits to opening a "Mom and Pop" shop is that you'll get tax breaks and you'll own everything. You won't have a General Manager or a Regional Manager to answer to; you're your own boss. It all depends on what kind of restaurant you want.

Answer 4

It is always best to start your business by putting together all your questions and finding answers to them. You can do that with a business plan (and if you plan to look for investors or apply for a loan, you need to present your business plan). Here are some sample business plans that you can use

Sample Restaurant Business Plan (steakhouse) http://www.bplans.com/spv/3228/2.cfm?affiliate=powerhome
Sample Restaurant Business Plan (organic restaurant) http://www.bplans.com/spv/3259/index.cfm?affiliate=powerhome

Below are free information and resources that I've found on how to start a restaurant business:

National Restaurant Association http://www.restaurant.org/
Entrepreneur.com Marketing and Promotions of a Restaurant http://www.entrepreneur.com/article/0,4621,317716-8,00.html
Starting a Restaurant Business http://www.awib.org/content_frames/articles/restaurant.html
RestaurantOwner.com http://www.restaurantowner.com/
AllFoodBusiness.com How to Start a Restaurant http://www.allfoodbusiness.com/starting_your_own_business.php
6 Ways to Attract New Customers to Your Restaurant http://www.homebusinesscenter.com/how_to_start/restaurant.html
Canada Business Starting a restaurant http://www.cbsc.org/servlet/ContentServer?pagename=CBSC_FE%

You may consider the following resources (not free):

Palo Alto's Restaurant Business Plans http://www.bplans.com/st/restaurant.cfm
FabJob.com's Starting a Restaurant Business http://www.fabjob.com/restaurantowner.asp
Entrepreneur.com http://www.smallbizbooks.com/cgi-bin/SmallBizBooks/00047.html

Associations are great resources as well

National Restaurant Association http://www.restaurant.org/
National Restaurant Association Educational Foundation (they have excellent training courses for restaurant owners) http://www.nraef.org/
Your state restaurant association (e.g. http://www.ohiorestaurant.org/ , http://www.azrestaurant.org/ , http://www.parestaurant.org/ , http://www.nmrestaurants.org/
If you want in-depth information, I suggest you check out the following books:

The Restaurant Business Start-up Guide (Real-World Business) by Paul Daniels
Opening a Restaurant or Other Food Business Starter Kit: How to Prepare a Restaurant Business Plan and Feasibility Study by Sharon Fullen
Start Your Own Restaurant (and Five Other Food Businesses) (Entrepreneur Magazine's Start Ups) by Entrepreneur Press and Jacquelyn Lynn
Start Your own Restaurant and Five Other Food Businesses (Startup) by Jacquelyn Lynn

Financing will not be easy. Restaurants are NOTORIOUS for high failure rates. If you approach a bank for a loan, even SBA, you need to have:

- collateral
- funds for your business (they won't give you 100% loan)
- proof that you or your business partner have previous experience running a restaurant (if you have 0 experience, your chances are next to nothing)

I suggest you find some investors to help you out

Answer 5

Financing will be near impossible for a restaurant. You will have to contribute substantial equity, you will need to guarantee and have meaningful personal net worth and hopefully you will need to have alot of experience in the industry.

Most restaurants fail so you will need a very good business plan.

Look at SBA site

Answer 6

Try the Small Business Bureau!

Answer 7

to the the bank and ask for information on how to open a business