Starting a restaurant business might be someone’s long-held aspiration. However, there are many investors who don’t even think to touch this business with a ten-foot pole because many restaurants don’t succeed as planned.
It is clear that owning and running a restaurant is extremely high-risk and a full-time job. When you have goals to achieve, you can’t become lazy or afford to lose focus; otherwise, the place is going to be empty fast. Remember, it’s vital to have a vision. And those business owners, who don’t have a vision, end up making losses.
Likewise, with careful planning and execution, a person’s lifelong dream could come true, regardless of the high competition. So have a clear view because it will help a business get bigger and better.
What do to do if one is enthusiastic and also has a solid restaurant business plan in mind but doesn’t have enough capital to fulfill his dreams?
Hang on….All hope is not lost…
In this article, we have tried to answer the most common Goggle searches question on how to start a small restaurant with no money? Let’s have a look below.
First, a person needs to do an industry overview. Statistics show that about 80% of new food businesses are likely going to fail within the first 5 years of their operation. It happens when there is an economic downturn in the country, purchasing power drops; people reduce their spending for eating out and cook more at home. Similarly, a business falls if there is zero attention from the business owners.
Market Research and Feasibility Study
Restaurant business has no defined demography. Every human needs food so all of us are potential customers of this industry. Well, it is essential to note that various restaurant owners or famous food chains most often design their restaurant to service-specific demography.
For example, they choose to target certain groups of people and, it could fall under the following categories;
- International Tourists
- Top Executives
- The Diplomatic Community
- Corporate Organizations
List of Niche ideas
There are different criteria to classify restaurants. Consider the following if someone wants to start a restaurant business;
- Casual dining restaurants
- Family dining restaurants
- Fast food restaurants
- Vegetarian restaurants
- Fine dining restaurants
- Local / Ethnic restaurants
- Fast – casual restaurants
- Intercontinental restaurants
- Cafeteria-style restaurants
- Buffet restaurants
Consider Starting With A Catering Business Or Food Truck First.
Pop-up restaurants are hosted in various spaces, like bars, abandoned arcades, existing restaurants, theaters, bowling alleys, or even chef’s homes.
Many small restaurateurs decide to launch a temporary food setup before putting their feet in a brick and mortar restaurant. It is because a food truck or local catering business is a low-cost way to test out a mini-restaurant business. Once it gets success, a business owner would feel confident investing in a restaurant business.
In this article, we have also summed up some creative ways to procure funding for hopeful restaurant owners. Read on for 4 best ways to open a small restaurant with no money.
1. Explore a restaurant incubator.
If you have no money or experience to start a business, it would be a great idea to start a restaurant incubator in your locality.
For example, Pilot works is a well-renowned food business incubator, allowing new entrepreneurs to rent commercial kitchens in different cities. This benefits all participants as they get affordable co-working space, flexible working hours, tailored mentorship programs, and, the community of culinary professionals who are on the same boat––looking to achieve the same goal. This platform also keeps a new businessman motivated and focused.
2. Get creative with crowdfunding
Crowdfunding is a financing mechanism, where an entrepreneur (mostly new ones) pitches their ideas online to get funding for their restaurant project in exchange for rewards. But one needs to be creative minded to record a pitch and upload it to high competition sites such as Kickstarter, GoFundMe, and Indigogo.
This crowdfunding idea appeals to those who love to support new emerging brands, and in return, get gift cards from a restaurant when they pitch in.
How to set up a successful crowdfunding campaign? Follow the steps below.
- Set a fundraising goal (the amount that you need to start)
- Choose a campaign duration
- Plan where all the money will invest
- Choose rewards for donors
- Make an exciting video pitch (take time to research)
- Launch your campaign
3. Take out a loan
It is not easy to finance a restaurant business. From managing day to day operations to secure business reputation, all required a lot of hard work. This is the reason it is considered as one of the riskiest investments. Also, getting a bank loan for a food business is a tedious and long approval process. So one may look for conventional financing options–––a great way to finance with the promise to pay investors back once a business has taken off.
4. Find potential angel investors
We have heard the term “angel investors” who come into action when it’s time to scale any small business. Unlike outside firms, they invest in a business by putting down their own personal funds. Mostly former/current entrepreneurs act themselves as angel investors.
If it’s not possible to search for potential investors, one must borrow money from friends or family members.
Starting with a small startup will give you ample opportunities and experience to work with the chef and deal with other nuances of the trade. The key is constant learning. If you don’t research about a business, you can’t grow it. So whatever you plan to do, just keep an eye on the ball. In short, the more you focus, the more you grow fast.
Start small, but take it as high as you dream off.
Thank you for reading!
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