Start a Restaurant

Many traditional lenders have unofficially removed bar and restaurant properties from their short list of business loan candidates. Other lenders will restrict their restaurant lending to a handful of restaurant businesses with a long track record. There are two dominant reasons for these actions by traditional lenders:

(1) Bars and restaurants will usually have the highest failure rate among new businesses. Traditional banks have discovered that an infallible strategy for avoiding such business loan failures is to avoid making these kinds of loans in the first place.

(2) Commercial mortgages for bars and restaurants will involve special financing requirements for liquor licenses and items generally categorized as FF&E (furniture, fixtures and equipment). As a result, there will be a perceived intermingling of various assets looked upon as collateral by the traditional banks, and this extra level of complexity discourages many traditional lenders from actively making commercial real estate loans to bar and restaurant owners.

BUSINESS LOAN SOLUTIONS FOR RESTAURANTS AND BARS

(1) I believe that one of the primary underlying reasons for a high failure rate among bars and restaurants is directly due to the commercial borrower being forced into short-term financing when long-term financing is essential to the health of the business investment. Businesses (and especially restaurant and bar properties) should not be financed with short-term funds. It is essential to obtain long-term commercial financing of at least 15-20 years (and longer is even better).

(2) Seller seconds and other variations of subordinate financing should be considered. This will permit the most aggressive commercial financing for bar and restaurant commercial mortgages, up to 90% of the property value. This is important if you are the buyer because it will provide another financial tool to help with financing. It is important to the seller because it might enable someone to buy the property who could not otherwise do so. Subordinate financing (including seller seconds) is not permitted by many/most traditional banks.

(3) For bar and restaurant loans under $1 million, a Stated Income commercial mortgage should be actively considered. This form of commercial financing will not require income tax returns or other income verification. This especially benefits self-employed bar/restaurant borrowers who frequently have income that is erratic and difficult to document properly. Stated Income commercial real estate loans are not provided by many/most traditional banks.

(4) Finally, restaurants and bars will frequently benefit from using credit card receivables to convert future cash flow into immediate working capital via a business cash advance up to $300,000.

Copyright 2005-2006 AEX Commercial Financing Group, LLC. All Rights Reserved.

Author: Stephen Bush
Article Source: EzineArticles.com
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For many years restaurants have gotten a bad rap when it comes to perceived risk.  Business experts and people in general are prone to citing “The High Failure Rate” of restaurants as a reason not to invest in or start restaurants.  Most of us are so use to hearing such talk we simply accept it as truth.  If we were to ask those who claim that restaurants have a higher failure rate than other small businesses to provide a references for their claim, they couldn’t.  There aren’t any credible research studies to support this myth.

I recently published an article outlining how anyone can dramatically improve their odds of success at starting a restaurant business.   The same day that the article was published a reader left a great comment, which not surprisingly mentioned the high failure rate of restaurants.    For the benefit of aspiring restaurateurs, restaurant investors, and the restaurant industry, it’s time to set the record straight.

There is no meaningful difference in the failure rate of restaurant start-ups and small business start-ups in general.  According to the Small Business Administration about 44 percent of small businesses are still operating after four years.  Similarly, according to a 2007 study conducted at Ohio State University, 41 percent of restaurants were still operating three years after launch.

As someone who has owned and operated a restaurant in a major city, the enjoyment and social aspects of being a restaurant owner fall just below rock star, local celebrity, and city mayor.  A popular restaurant allows the owner to be at the center of community events.  More importantly, if restaurant owners avoids the trap of trying to “Do-it-All” themselves, they can also enjoy a well balanced lifestyle.

The classic nightmare restaurant ownership scenario of long frantic days is the same for any entrepreneur,  who does not graduates from working in his business to working on his business.  Moreover, if restaurants were failing at the staggering 90% rate that some quote, it is unlikely that the restaurant industry would have been growing at double digit rates prior to the current recession.  

Author: Shed Wallace
Article Source: EzineArticles.com
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Sick Project Symptoms

Some of the sick project symptoms include:

• Excessive hard work;
• No time is allowed for taking breaks from work;
• Senior management are avoiding you;
• Sense of denial by team members that things are fine;
• Errors are compounding;
• The team people are tired and irritable; and
• No fun is being had by the team.

Project Failure Factors

There are also two levels of factors that lead to project failure. These are:

Level 1 factors – These factors guarantee project failure [or in street jargon, they are showstoppers]. That is, the project will fail to deliver quality, added value and professional satisfaction on time and in budget.

Level 2 factors – There are a number of other factors, which may not prevent the project from delivering on time and in budget, but will generally result in substantial degradation of quality, added value and professional satisfaction.

Project Management Experts

If you want to make sure that your project doesn’t die an untimely death, you need to get a reliable project management training firm. Based in Australia, Thomsett INTERNATIONAL is recognised as one of the most innovative and effective project management groups. They provide consultancy and education in a number of areas including business project management, business analysis, project team management and mentoring at all levels in the above areas.

Their expertise in the fields of business analysis and project management has benefited not just Australian companies, but also companies from around the globe. Outside Australia they currently have work in, or over the past few years have worked in, the following countries: China, Fiji, Hong Kong, Italy, Kuwait, New Zealand, Papua New Guinea, Singapore, the United Kingdom and the United States of America. With their project management courses, workshops, tutorials and executive briefings, Thomsett INTERNATIONAL has made a mark in the field and is one of the most respected management groups around.

Apart from the courses, the company also has a mentoring programme. Their consultants are all skilled project management mentors. If you think that you or some members of your company could benefit from spending some time being mentored by one of their people, you can call them to discuss a programme. You can check out their complete list of workshops and tutorials on their website at http://www.thomsettinternational.com.au.

Allen James has been a business analyst with a firm in Australia for seven years before moving to the field of writing full time. Today he writes a number of articles in which his experience of the field he worked in is reflected.

Article Source:http://www.articlesbase.com/management-articles/avoiding-project-failure-1315195.html