Restaurant Startup Financing It might seem like a little piece of the American dream — taking a risk and heading to the bank to withdraw your life’s savings and start your own restaurant. In fact, that might have been your plan the entire time that you were stocking money away into your savings account for all of those years. However, spending all of you and your family’s savings to open up a restaurant generally isn’t a good idea. Although you might not like the idea of going into debt if you don’t have to, seeking restaurant startup financing through a reputable company like IRH Capital can be a smarter decision. These are a few reasons why.
Your initial plan may have been to use your savings — and only your savings — to open your restaurant. This means that you might have always planned to start your restaurant on a tight budget.
Being financially smart and not spending more than you have to is always a smart decision, whether you are spending money that you already have or are financing your start-up. However, you shouldn’t start your restaurant out on a too-tight budget if you can help it.
For example, spending a little more on higher-end restaurant equipment will save you money in the end. Investing in a solid location instead of trying to get by in a commercial property that you can lease cheaply can make or break your business. If you take out a business loan to start your restaurant, you will have a little more money to spend to ensure that your business is started out on the right foot.
The restaurant business is hard. It can take years for you to start turning a real profit. In the meantime, you might find yourself needing new equipment, more stock or other funds to keep your restaurant running and thriving. If you go ahead and risk everything now, you might have a tough time getting money later to run your business.
If you take out a start-up loan now, however, you will still have all of your money in savings. It’s a good idea to hold onto it; then, if you find that your restaurant needs something later on, you’ll have the money that you need to cover it
You might not think that you will need your savings for your personal needs. If you are in good financial shape — which is a good thing if you are trying to start a business — you might not be too worried about your personal bills.
However, as mentioned above, the restaurant business is hard. You might be putting all of your hard work and effort into your business, and you might not be bringing home enough money to pay the bills afterward. Paying two sets of bills — one set at your home and one at your business — can be tough.
However, if you’re in a tight spot and need money to keep your family afloat, it might be hard to do so. It’s a lot easier — and smarter — to borrow money for a business than to attempt to borrow money for personal bills and needs later. By financing your start-up instead of using all of your personal savings, you’ll have money in the bank to take care of yourself and your family later if you need it.
As you can see, it’s really not a good idea to spend your entire life’s savings to start up a restaurant. Instead, contact us at IRH Capital to find out more about restaurant financing for your new business.