Many people with above-average cooking skills dream of opening a restaurant one day. But for many, getting financing for a new restaurant is a major stumbling block. If you want lenders to look favorably upon you, you have to put all your personal financial information in order beforehand. You must have an explanation in writing if your credit score isn’t excellent. If you’re serious about opening a restaurant, these tips are for you.
Pick a Location
You may not know it, but all successful restaurants have one thing in common: a great location. Nobody wants to visit a lovely restaurant then get robbed afterwards. We all want to go to eateries that are easy to access and well-lit.
Don’t be quick to pick a location for your new restaurant. Think of the traffic and the size of the space. Is it enough to accommodate your restaurant’s design? Also, consider the rent. You can always negotiate a lease with your potential landlord, so don’t be afraid to ask if the rent is fixed.
Choosing a good location is one of the things that dictates profitability. Accessibility and parking are crucial to a restaurant’s success–as are great food and service. The location will determine many aspects of your restaurant, including the style of the dining room and the menu.
Create a Business Plan
Is a business plan a must? Absolutely! A business plan outlines how you’ll open the restaurant, what you’ll spend money on, and how it will be profitable the first couple of years. No lender or small business bureau will consider loaning you money if you don’t have a well thought out business plan.
A business plan can help you get new business partners or funding. It makes lenders and investors know that they will get a return on their investment. It’s the tool you use to persuade others that investing in your business, or working with you, is a smart decision.
Get Ready for Your Bank Interview
You’ve organized all your financial documents and created a brilliant business plan. Now, you only need to pass the interview successfully so you can take things to the next level. It’s worth mentioning that not every lender will schedule and interview for a business loan, however, most banks do. Research the questions the loan officer may ask and master the answers before your big day.
Interviews help banks know whether you’re worth giving money to, and if your business will increase their bottom line or give them endless headaches. It’s a lot like a job interview. You try to persuade your dream employer to give you the opportunity to shine.
You must prove to the lender that you will be able to make loan payments on time–even when something unexpected happens. You must also prove that you have the money or assets to pay the loan if your venture collapses. Even lenders of cash title loans will ask for the car title to use as collateral, so it’s important to weigh your options before settling on a lender.
