The average Canadian eats out or buys takeaway meals at least once a week. If you’re looking to turn a profit, opening a restaurant is the perfect way to start a high-demand business.
Still, startup fees and funding can be a costly challenge. Luckily, there are options available for anyone with ambition and passion. Read on to learn how to start a restaurant with no money and succeed while doing it.
Know What You Need
Before seeking out potential funding sources, you’ll need to determine what you need for your restaurant to operate. A building is likely the first thing you’ll want to invest in because it gives you somewhere to set up shop. Make sure that you look for buildings in high-traffic areas and determine how much you’ll need to rent one out.
You also may need to secure restaurant permits and licenses so that you can legally operate. Exact needs will vary based on what services you plan to offer, but you’ll need food handler permits, business health permits, and food services licenses. You also will require a standard business license and certificate of occupancy.
Getting these licenses and any others you need will cost some money, so make sure to include that on your necessities list, too.
Also consider the costs of:
- Tables, chairs, and other furniture
- Cooking equipment
- Storage space (like refrigerators and freezers)
- Safes and lockboxes for money
- Security equipment like cameras and sensors
- Utility bills (heat, electricity, water, gas, etc.)
Write down all your needs and calculate projected costs. This will give you an idea of how much money to request from potential funding sources.
Find Potential Investors
One quick way to get money for your restaurant is to find willing investors. Friends, family, and business connections may be open to giving you some capital so you can find your footing. Others who work in the industry may be able to give you startup tips, too.
Of course, you would offer them shares of the company in exchange for this capital. If your restaurant succeeds, the money they put down will pay off for them, too!
Still, make sure that you’re clear that there’s no guarantee of success. You don’t want to accidentally ruin your relationships by misleading someone. Hopefully, though, you’ll succeed and everyone will be happy.
Angel investors are a similar source of potential restaurant funds. Instead of people you know, these investors are wealthy people who will invest in startups that they believe in. They’ll get equity in return.
You’ll need to pitch your restaurant to them and tell them what makes you stand out. Consider cooking some of your favorite recipes for them if you meet in person. If you find an angel investor online, tell them your brand’s nuances and what your goals are for the future.
Crowdfund
You likely have seen crowdfunding efforts online frequently in the past few years. Sites like GoFundMe are popular ways for people to receive money for personal projects and new business ventures. People send in money to contribute to the cause and the recipient uses it for the purpose they gave.
There are special crowdfunding sites for startups like EquityNet. Do some research, set up shop on a platform, and blast the link out on social media. You might want to pay for an ad to display the crowdfunding effort on some platforms.
Incentivize donors by offering a free meal when you open or a membership to your restaurant. Give them coupons and discounts. This shows you care and can help you get more crowdfunding.
Take Out a Loan
Loans are the #1 way to get funding when opening a restaurant in Canada. This is especially true when it’s so easy to apply for one online.
You can request up to $850 per month on our online form. You’ll get approved within a day and get money on the same day (assuming that it’s before 2:30 PM and a business day). If it’s later, you’ll get the cash in your bank account one day later.
There’s no need to leave your home. You can make the request on any internet-connected device. It’s also possible to call and request the loan.
Once you have the money, you can do anything you like with it. It can go toward a security deposit on a place to run your restaurant. You can use it to purchase kitchen equipment or seating that you’ll need to open your doors.
Regardless of what other funding sources you get, a loan can really help you get your business off the ground. It’s by far the fastest way to get money and can supplement income from investors and crowdfunding perfectly.
Reduce Menu Prices
As a new restaurant business, you may be tempted to start with higher prices until you make more money. However, this is a bad idea in the long run. You don’t want to short-change yourself, but low prices can entice people to choose your restaurant over competitors in your area.
It’s better to have low prices and many customers than only a few people paying higher prices. 100 people buying a $7 burger will give you $700. That’s far more than 50 people buying a $10 burger!
Over time, you can increase your prices incrementally after establishing your brand. Once people try your food and realize how amazing your menu items are, you can begin to charge more since you’ll have established customers. They’ll be happy to pay the price, and since you’ll have a good reputation, others will likely be willing to spend a bit more to try your food.
Starting a restaurant tends to become profitable within two years of opening its doors. Profit margins will be low at first, but they’ll give you more money to reinvest into your business plan. Assuming that you have a strong business plan and adequate funding from loans, you likely will have more money to invest in the future.
More on How to Start a Restaurant With No Money
Now that you know how to start a restaurant with no money, it’s time to get cracking. 24Cash offers high-quality personal loans that go into your bank account quickly. You’ll be able to start your restaurant business ASAP without worrying about associated costs.
Fill out our loan request form to start investing in your Canadian restaurant ASAP.