Opening a restaurant takes a lot of money. But surprisingly enough, you can start one even if your financial standing isn’t very promising. If you find yourself wondering how to open a restaurant with no money, the good news is, there are several strategies you can use. Read this guide to know which works best for you.
How to open up a restaurant with no money? Here are some strategies that might work for you:
If you're wondering how to open a small restaurant with no money (or even how to open a larger one), you may want to try to secure a small business loan. A small business loan can provide you with startup capital for the costs associated with getting your restaurant off the ground.
So where is it best to get a small business loan? Enjoy transparent, fast, and fair loans by working with the SBA. We recommend the SBA (7) loan and the microloan.
The SBA (7) loan is a great option if you’re planning to start strongly. Upon approval, you will receive $5 million that can be used for renovation, building acquisition, supplies, equipment, and other related costs.
If you’re planning to start slow and avoid risking a lot, then SBA’s microloan works best as the method in how to open a diner with no money. This grants a $50,000 loan that you can also use to cover equipment, supplies, furniture, and other costs with the exception of buildings. Consider this if you’re planning to start a mobile restaurant.
Having an investor to partner with can be one of the most effective ways in how to open a restaurant without money. An investor will buy-in on your vision in exchange for future profits related to the investment.
Individual investors may set up a contract that is similar to a loan, which will allow you to repay those funds over time, or may purchase ownership in a portion of your new restaurant, which will allow them to continue to bring in profits as your business grows.
I can’t find investors. How do I open a restaurant with no money if this is the case? Another suggestion is crowdfunding. Crowdfunding is a financing method wherein several individuals give small amounts until you reach the required funds. Some restaurants are able to get off the ground thanks to platforms like Kickstarter, GoFundMe, or AngelList, which allow interested backers to support businesses they believe in.
Consider what you have to offer. Do you have a restaurant concept or style of food that is unique, interesting, or enticing? Do you have a story that might increase the odds that someone will want to back your new restaurant? If you're interested in how to start a restaurant with no money to invest, you may want to look into crowdfunding. The success of your crowdfunding campaign may also help give you a better idea of how much interest people will have in your new restaurant.
Local funding options are another method in how to open your own restaurant with no money. Sometimes, local associations will offer loans or grants that will help you get your business started, especially if they are interested in drawing business to a certain area.
Take a look at your local area and consider what funding options might be available. Does the city offer grants for new business owners? Do you have the option to secure funding from a local restaurant association? Do your research and determine whether there is any funding assistance available.
Sometimes, you may struggle to get the funds even if there’s knowledge of how do you open a restaurant with no money. Even with a great concept, since no one knows about your restaurant or the options you can provide, you may have a hard time getting investors.
However, by starting small, you may find that you can generate interest, raise experience, and develop a dedicated group of fans who will keep coming back to your restaurant. You may want to consider:
Opening a catering business. Catering is a great way to get the word out about your food, and you may be able to cater larger meals out of a smaller space than you would need to open a restaurant.
Trying a food truck. Food trucks often generate a lot of interest, and they allow you more mobility as you travel around the area, which can help you reach a wider audience.
Hosting a pop-up restaurant, where you put out your best food items for a short period of time. Once they're gone, they're gone, the scarcity may help increase interest.
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Okay, now I know some of the ways on how to start my own restaurant with no money. I now need to know the startup costs. Giving a rough estimate is hard as there are many factors to consider. We’ll discuss startup costs based on how much you need to pay for the important assets that your restaurant must have to fully operate.
First off, your restaurant needs a building. Most go for a commercial lease and we expect you do the same. The average cost of a commercial lease is $1.95 per square foot a month. Considering that you’ll own a 500 square feet restaurant, then a commercial lease will cost $975 per month.
Furniture is another important investment when starting a restaurant. You will need to pay $700-$2,000 per chair. Of course, you’ll need round and rectangular tables. A single rectangular table costs $193.70 on average. A round table, on the other hand, is $94.90 on average.
You also have to spend money on cooking equipment. The table below shows the cost of the most important implements that a restaurant needs:
Aside from asking how can I open a restaurant with no money, You also have to think about the things to be done when the funds are there. After all, starting a business with no sense of direction will waste financial resources.
Make sure you know how you will generate income with your restaurant. Have a plan in place that lays out who your target customers are, how you will reach them, and any other key information. You may need to provide that business plan to your investors in order to secure a loan or backing for the restaurant.
It’s best to work with a theme. By having a theme, it’s easier to come up with a menu. It also helps you identify target customers.
It seems that the most popular types of restaurants in the USA are those that revolve around Italian, Chinese, and Mexican food. Nonetheless, western-inspired restos don’t fall short such as steakhouses, BBQ houses, burger joints, sandwich joints, and seafood restaurants.
Some restaurants sell the same food. But have you wondered why one or two seem to stand out over others? This has something to with the X factor. That said, your restaurant must have something that others don’t.
It’s up to you to explore and come up with something that can only be found in your restaurant. Things worth trying out are hiring an experienced chef, giving discounts to customers who celebrate their birthday at your business, or using locally produced ingredients for the dishes. You can even try breaking conventions and revising known recipes for a twist.
Employees are a prime investment when starting a restaurant. And so, you don’t want to keep a team that drags your business down rather than help it grow. We don’t mean that you only work with a staff that already has a lot of experience in the food and hospitality industry. What we want to convey is that you work with people who have promise.
Insurance can help protect your restaurant and your investment. You may need commercial property insurance, workers' compensation insurance, and general liability insurance. In addition, you may want to consider business interruption insurance so that you can keep up with payments even if your restaurant has to close for any reason.
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Lonnie Bell Insuranker
Policy Type: Business Insurance
Company name: Employers Insurance
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