Property of Eastbeck® Wealth Management, LLC
Opening a restaurant can be the most inspiring thing you have ever committed to or it can quickly become the most daunting task you have ever encountered. Here are five ways to stack the cards a little more in your favor before the first plate is presented:
- Business Plans Should Contain Detailed & Realistic Budgets: Detailed budgets will help you keep on track with your finances when you are faced with competing financial priorities and numerous decisions. Working with a CERTIFIED FINANCIAL PLANNER™ who has experience in the restaurant industry will be of help at this crucial stage.
- Hiring The Right Team Does Not Mean Making Them Owners: When you encounter someone who says they want “equity” or “sweat equity” as compensation for joining your business in the early stages, it’s ok to think about it. Equity awards or the anticipation of such awards can create significant complications such as feelings of entitlement, taxation issues, and legal nuances, so before you award equity to get help opening your business you should talk with your attorney and your CPA.
- The Lease Is Just As Important As The Location: Regardless of how great you think the locations is, it is important to include as a part of your team, an attorney and a Realtor® who both specialize in commercial real estate transactions. They will work together to thoroughly review the lease terms and the actual suitability of the location. An improperly structured lease can diminish your chances of success before you present the first plate.
- Evaluate Financing Through A Bank: A common opinion is that banks are reluctant to finance restaurant operations. Lucky for you there are many factors that will determine your credibility with a bank such as your experience in the industry, the banks experience in the industry whether negative or positive, your personal credit history, your assets and many more factors which are dependent on your specific situation. Speak with your CERTIFIED FINANCIAL PLANNER™, CPA, and your local banker for advice on how to proceed.
- You Do Not Need The Best Of Everything: It’s easy to buy the best of everything when purchasing equipment and furniture, but over time there may be some of these items you will wish you had not purchased when you need that money in your payroll accounts. This is where sound industry experience is invaluable to your team whether you have first hand experience, hire a professional consultant, or rely on a key employee. Be a value shopper by balancing quality with price.