Start a Restaurant

By the time you investigate and determine each cost of starting up a bar, you may have spent months on research only to determine that you cannot profitably operate in the way you had envisioned, sending you back to square one. Avoid this possibility by starting with an expert (and preferably more than one) who can help you create a top-down estimate.

Start With Your Network

The first place to look is with friends, family, or contacts of your friends and family who are willing to speak with you from their experience of launching a bar. Hopefully they will be willing to do so for nothing more than the satisfaction of you out. Some bar start up costs are similar to those of a nightclub or restaurant, so consider speaking to individuals with those experiences as well.

Non-Competing Business Owners

Bar business owners operating in another city, far enough away that they cannot be considered a competitor, may be willing to help you out by sitting down to describe the costs of launching. Perhaps the consulting fee may be as low as the cost of the business owner’s lunch.

When talking to individuals who have opened bars in the past, be sure to determine whether the cost of doing business and launching in your city will be higher or lower than in the other city, and by how much. Compare prices for some standard items between these markets to check this. Also consider the effect of inflation in the years that have passed since the business owner you spoke with launched his or her bar. Apply the geographic conversion and inflation to the estimates they gave to get a better estimate.

Consultants

Paid consultants with experience helping bars to launch are another means to expert opinions on startup costs. The cost may be significantly higher than speaking with a business owner, but you may gain from their experience working with multiple businesses and the fact that their business reputation rests on their ability to give good advice. As long as you check references carefully for any consultant you work with, you can be reasonably assured of receiving good help.

Conclusion

At the end of the day, remember that all of the experts you speak with can only give you estimates and that the actual costs you may incur will be higher or lower than the total they give. You will eventually have to do your own detailed investigation, but after speaking with a few experts you should have a range can assume you are operating within.

While you are speaking to an expert about start up costs, don’t miss the opportunity to ask about other key challenges they came up against and hearing advice they wish they had received before they launched. Document any knowledge you can gain from their experience.

What is my Company’s Structure?

The corporate structure of your restaurant business is integral to its success because it can affect the environment your company operates in, and even has legal implications that can limit your company’s liability.

Although there are certainly advantages and disadvantages to every corporate structure, an LLC is often the best fit for a startup restaurant. LLC’s protect entrepreneurs from personal liability while simultaneously offering both simplicity and flexibility that are not present in most corporate structures. Corporations require a board of directors, shareholders, and other commercial formalities that can be a hassle for a new business.

What Administrative Regulations Am I Subject To and What Permits Do I Need?

Restaurants must file articles of incorporation, which is relatively quick, and will allow you to acquire a Federal Tax Identification Number which allows your company to properly pay its taxes.

Furthermore, restaurants must meet all the local zoning laws that govern restaurants and also pass the codes enacted by whatever restaurant regulation agency that has jurisdiction within your local area. While these inspections are relatively cheap, they can take up to nine months for acceptance. The acceptance policy includes documentation of counter space, kitchen equipment, and ventilation systems.

If your establishment wants to sell alcohol then it will need to acquire a liquor license which can cost anywhere from a few hundred dollars all the way up to $10,000. Successful restaurants make sure their establishments are up to code and properly secure the regulatory issuances that allow them to legally operate in whatever community they are serving. Although starting a restaurant seems simple in principal, proper planning and adequate time to acquire necessary permits is fundamental to a successful startup.

How Do I Choose Suppliers?

Smaller establishments may be better off utilizing a small pool of regular suppliers in order to streamline processes and establish long-lasting business relationships. When assessing suppliers, remember that price is important but so is quality, safety, and delivery reliability. When evaluating fresh food, always inquire about taking a quick tour of a distributor’s facility paying close attention to cleanliness and adherence to code.

Starting a restaurant obviously entails lots of work, research and most importantly, dedication. It may be necessary to put a lot of time and effort into a new restaurant, but if done correctly, the results will be well worth it.

You are well aware of these facts, and you are determined to create and run the restaurant that you have dreamed of since you were a child: The one that on the outside, resembles a French cottage, and on the inside boasts of authentic French décor and a menu of tasty French comfort foods, creating an exotic yet homey atmosphere for your patrons.

Still, another vital component of starting a restaurant is of course, money. So where are you going to go to find the money that you need to build this restaurant of your dreams? Why not get a restaurant loan?

What is a Restaurant Loan?

A restaurant loan is an unsecured loan that can be used for startup restaurants as well as restaurants that are already in existence. The restaurant loan is given as an advance against the restaurant’s future credit card sales. This means, new restaurant owners can get the cash they need to finance startup costs now, and pay later, without having to make scheduled payments every month. Instead of the traditional fixed monthly payments, restaurant loans are repaid little by little as customers make credit card purchases.

You don’t need any collateral to secure the loan. Your restaurant’s future credit card sales are collateral enough for restaurant loan providers. Your payments go with the flow of your business and therefore a borrower does not feel such a sting when it’s time for loan repayment.

Finding startup cash can be a difficult process. The availability of restaurant loans can make this process much easier, not to mention faster and often more convenient.

Author: Gaston Castro
Article Source: EzineArticles.com
Humorous photo captions

Many people have heard the startling myth that nine out of 10 restaurants fail within their first year of opening. Hearing this can make anyone who is contemplating going into the restaurant industry think twice.

But according to H.G. Parsa, associate professor in Ohio State University’s Hospitality Management program, as quoted in a Business Week article, this is not true.

After researching, he found that realistically, 3 out of 5 restaurants close or change ownership within their first year of business.

According to the article, Parsa also identified “…lack of sufficient startup capital as one of the major elements that contribute to a restaurant’s failure,” leading him to believe that many banks won’t lend to restaurants because they may believe those mythical statistics. The article states, “Typically, the ones that do [lend] require would-be restaurateurs to pay sky-high interest rates or put up significant collateral…”

But even if banks are wary of lending to restaurant owners, especially new ones, for the reasons mentioned above, there is another option; restaurant loans.

Restaurant loans can be used for startup restaurants, or for restaurants that have been in existence for any length of time. The loans are unsecured, so there is no collateral required, nor are there fixed monthly payments. Restaurant loan payments are made via the restaurants credit card sales. Once a restaurant owner receives a restaurant loan, whenever customers use their debit or credit cards to pay for their food or drinks, a small percentage from the sale goes to repay the restaurant loan. This allows the loan repayments to go with the flow of business.

Another benefit of the restaurant loan is borrowers receive the opportunity to renew their restaurant loan once 60 percent of their previous balance has been paid. Therefore a new restaurant can get a loan and the money funded into the account of his/her choice within the first week of the restaurant’s opening. But it doesn’t stop there. These renewal opportunities allow restaurant owners to have access to an ongoing source of business financing, as they can renew their loans as many times as they like.

Increase your chances of restaurant success by getting a restaurant loan, and having enough money to finance everything that a successful restaurant needs.

Author: Gaston Castro
Article Source: EzineArticles.com
Provided by: Humorous photo captions