Startups & Financing
Opening Your First Restaurant
Learning the Owner’s Vision
- I begin with an understanding of the owner’s vision: menu, price points, branding, restaurant size, demographics, locations and financial capabilities and opportunities.
Estimated Costs for the Business
- From this basis, the owner and I can put together initial projections of sales, followed by project costs of operating the business.
- Estimated costs to open the restaurant are also put together: construction, soft costs (including leasing, licenses, permits, professional fees, financing costs, initial marketing, etc.), time-lines, and operating capital.
- Next, an initial business plan for potential lenders, investors, landlords, and other stakeholders is made.
Finding the Ideal Space
- At this point of the planning phase, we can get a clearer understanding of the size of the space and rent/debt service that is affordable.
- The owner and I begin the search for the ideal space that fits the demographics and “people traffic” needed to support the projections and vision. After identifying a space, we will negotiate a Letter of Intent with the property owner.
- For businesses that will have investors (outside of traditional lenders), an investor scenario for sales and returns on their investment will be created.
Financing and Permits to Operate the Restaurant
- Next comes the appropriate financing to build, open and operate the restaurant, followed by initial designs, permitting and licensing processes.
- With permits and financing in place, we can start construction, implement marketing strategies, and initiate management, staffing and training
The Importance of the Right Amount of Operating Capital
- FOR THE SUCCESS OF A NEW RESTAURANT, THE RIGHT AMOUNT OF OPERATING CAPITAL is critical, therefore, budgets are put in place for all aspects of building and opening the restaurant. These budgets will have the necessary oversight and supervision to ensure that there is money available for initial operations.For a brand new restaurant space, the entire process can take from 6 – 18 months. For a property that had been a restaurant, this can take from 3 months to a year. Photo of Cicala at Divine Lorraine