Thinking about what’s the next for you and your restaurant is your never-ending task as a restaurant owner. To be able to continuously meet the demands and expectations of the customers, and to stay at the top of the competition, your fresh ideas should be overflowing. From the latest restaurant technology up to the new and trending type of marketing, you’re endlessly trying to incorporate everything in your restaurant business. But, let’s be honest, with all the costs you have sustained for your restaurant, you might not have enough resources to introduce these new ideas and technology.
Financial assistance is one of the major setbacks for a restaurant. It hinders you in innovating and improving your current management as you don’t have enough resources to support your initiatives. This is a common dilemma in the industry, that’s why industry professionals have established different ways on how to seek additional financial support for your restaurant.
Obtaining capital for your next step is a challenging yet fulfilling task on your end. It allows you to establish your business as a trustworthy and reliable organization in the Restaurant Industry. But, winning the trust of anyone is not as easy as it sounds. Financial establishments often require tons of proof that you can sustain what they provide to you.
This article aims to inform you about alternative ways to support your big “next step” in the industry. It aims to communicate what are the helpful technologies you need to improve your operational and managerial systems, and how you can sustain them financially.
Technologies That Helps Streamline Your Restaurant Management
Before indulging in the financial knowledge of the Restaurant industry, you must learn first what are the proposed technologies that you can initiate once you have enough financial support.
But why go through the hassle? Aside from the fact that these technologies are the most proven solution to every predicament of a restaurant owner, fifty-one percent of modern diners believed that incorporating technology within the daily complexities for restaurant operations increases good value. And since you’re running a client-oriented business, listening to your customers is part of your job.
Before opening your restaurant, you must have this type of technology. It serves as the brain and heart of your entire operations as it can support every area of it. Starting from your front-of-the-house functions until waste management, your POS System will be your ultimate guide towards restaurant management.
This technology provides you an extensive analysis of how your restaurant is doing. It can see through your sales, marketing, and even customer behavior. Through your POS System, you can produce comprehensive reports that contain indispensable data and help you steer your entire management process towards success.
Now, it is understandable that you already have an existing POS System, but what if it needs an upgrade? Can you easily ask your provider to give you their latest model? Keep in mind that the rest of the industry is not resting a bit just to make sure that every change in the market situation is being addressed, this is the main reason why you also have to keep all your technology updated.
This solution may require you to provide a higher upfront cost and having restaurant financing options will surely help you get the best system in the market. Every consumer is looking for ease and convenience, an online ordering system makes it easier for them to satisfy their cravings without risking their health to go outside.
Launching an online ordering service with your food delivery service creates a whole new experience for your customers, one which they will enjoy more.
Inventory Management Software
While most of the modern POS systems are equipped with basic features that help your restaurant holistically, it is still ideal to incorporate solutions that are developed specifically to address the main concern. For this instance, your inventory needs more than just basic inventory features.
Managing your inventory well is the same as managing your restaurant’s bottom line. If you have a better system for inventory management, you can control your purchasing, costing, and even waste management. It affects all the vital areas of your operations that’s why you should not skimp on this solution.
Contactless Self-Service Kiosks
The pandemic has helped the growth of contactless solutions. From table reservation until the payment process, customers now opted for contactless processes. This might be a total change in layout since you ought to focus on hospitality, but you also have to weigh in the safety of both your staff and customers.
Modern consumers will be more delighted with your brand if you provide services that meet their digital lifestyle. Adopting different types of contactless strategies helps you redefine your operations into a safer and more reliable customer experience
If this is not convincing enough for you, be informed that the contactless payment market is accounted for from its current value of $40 billion over to $100 billion over time. It surely is a huge market to miss out on.
Staff Management Software
Why do you keep on spending countless hours and overtime just by making your staff schedule? Tap your staff’s potential by creating a schedule that will help them increase their productivity and efficiency every shift.
As a restaurant owner, you must ensure that the working environment and culture you establish will keep your staff high spirited and morale-boosted. Having scheduling and staffing software enables you to see your staff’s performance, and it also helps you identify who needs more training and in what area do they need it. You can easily produce a schedule that can solve and address the foreseeable future smoothly.
Customer Incentive Programs
Running a customer-driven business makes you understand how hard it is to keep your customers interested, more so cultivate loyalty to your brand. Launching different types of promotions and exclusive deals may appeal to them, but you should look for solutions that will support your customer incentive programs in the long run.
This is where your customer loyalty software comes in handy. You may start to initiate different types of rewards, incentives, and loyalty programs for your customers and see how well they will respond to them. These programs are seen to be effective as they will be based on the data that you’ve collected through your POS and Online Ordering Systems.
Financial Options For Your New Restaurant Initiative
Supposedly, these technologies and solutions for your restaurant are not as expensive as they might seem, but knowing how profit margins continue to slim down a restaurant’s revenue, having restaurant equipment finance assistance will be a huge boost for your restaurant.
Preparing a well-written business plan and financial report is always the first step. Whether you’re talking to an investor or going to a bank for an interview, you must present your business based on numbers and facts. Here are the differences and trusted ways you can seek added financial assistance to support your new restaurant initiative.
Though not the most ideal step, exhausting your monetary resources is one of the most reasonable financial support you can get. Using your credit cards for the annual subscription of the different restaurant software can be turned into your asset as your timely payment can help you build a credit score.
Just be wary of using the same credit card on your expenses. It can create trouble in your auditing process, so it’s ideal to separate a business credit card to avoid problems.
Personal loans are also a good option as it is easier to obtain compared to business loans issued by financial establishments. But since it’s personal, it’ll be connected to you directly and you’re solely responsible for completing the payment process. Failure to do so can negatively impact your credit score, which can affect your future financial support-seeking program.
Self-financing is the most common way for restaurant startups who’re still having a hard time gaining the trust of major financial investors and establishments.
Bank Business Loans
The most traditional way you can use to get additional funding is by asking for your local bank to approve a business loan for your restaurant business. Your bank will be looking into your credit score, collateral, reputation, and demonstrated skill and business plan. This traditional approach often takes time to approve, it usually takes 14-60 days to provide an update. If you still have time on your hand and you’re just in the preparation process, this could be the best option for you.
Your local bank will ask for collateral you can put up, which is 31% of the small restaurant businesses on average. Make sure that you studied the terms given by your local bank such as the interest and term loan payment options. Other financial institutes may have a better offer for you.
Reach out to angel investors. They are not just interested in technology-driven businesses, but they also aim to cover a wider market. These investors may seek equity in your business, just make sure that you’ll prioritize your terms as you may end up losing more of your business in the process.
If you’re trying to stay away from loans and debts, but comfortable with sharing a part of your business, then investors are the best option for you. Before talking to a restaurant investor, make sure that you can present your restaurant business well and how you’ll manage the funds that you’re seeking. Show them that every cent of their investment will be valued and will be put to good use.
Finding the perfect investor for your business is never easy. Differences in business philosophies and goals are the main culprits why most of the investors’ backdown on supporting a business. Widen your options by attending different conferences and summits, this way you’re slowly building your network at the same time you’re able to meet and know these investors and how well they’ll suit your philosophies.
Checking online platforms for investors is also a workable and practical option for you. You’re reaching out to an international audience and at the same time, you’re appealing to your niche market globally.
This is probably the most popular way to source out funding for your restaurant. This process requires you to present your business idea to the public in exchange for something of value such as an invitation for the opening, free meal, free merchandise, or even a loyalty subscription.
There are different types of crowdfunding processes, make sure to learn more about them to ensure that you’re getting what perfectly suits your restaurant. Here’s an overview of the different crowdfunding types for small to medium-sized restaurants.
- Loan-based – The money is lent to you with a set interest rate.
- Investment-based – The public invests in your restaurant for an exchange of something of value.
- Donation-based – The public donates resources to support your initiative or cause.
- Reward-based – You’re providing something in return in exchange for their investment, usually related to your new product or service.
Seedrs, GoFundMe, Kickstarter, Crowdfunder, Crowdcube, Indiegogo, are just some of the popular names in the crowdfunding field.
While it may be challenging to stay clear and connected to your objectives, crowdfunding is still one of the easiest and quickest ways to source out additional funding. It requires no upfront costs, and no bank appearances are needed. Lastly, it is crowd-based funding, and the public investors usually connect with your story, which makes it easier for them to engage and support your brand.
You may also opt to try out government-backed financial assistance such as start-up loans that usually amounts to £500 to £25,000. It is an unsecured personal loan where you’ll be given support and assistance in writing an effective business plan and even includes a twelve-month business mentoring.
Just make sure you meet the requirements, and you can soon enjoy a business loan where you’re fixed to pay an interest of six percent annually. No application and early repayment fee will be required from you.
Merchant Cash Advance
If you’re dedicated to going contactless and want to install a new food delivery technology, then this might be the best option for you. A merchant cash advance is where a percentage of your restaurant’s sales (usually your credit and debit card sales) are acquired in exchange for a huge amount of monetary resources.
This is great for your restaurant if you’re mainly accepting debit and credit card payments since this approach automatically deducts payments through a daily automated clearinghouse system.
If you just want to get over a small hiccup in a short period, microlending is an option for you. Microlending company will base your paying capacity on your restaurant’s reputation and business and personal credit scores.
If you want to score a higher amount but want to stick with the arrangement microlending provides, you may want to check out peer-to-peer lending. The same setup as microloans but you’re allowed to pool a higher amount of funds with different investors. Here’s a list of some of the known P2P websites which you can trust.
- Funding Circle
Local Business Associations
You may also seek assistance from different local business groups in your region. It is an existing circle of experts and businessmen who can not just connect you with potential investors, but they can also provide mentorship and essential business advice for your restaurant. Listed below are the business organizations that hold the most potential and authority in your community.
- National Restaurant Association
- A local association of restaurants (and owners)
- Rotary clubs
- Local Chamber of Commerce
Joining this circle helps you build up your connection not just inside the Restaurant Industry, but also to other local businesses you can seek partnership with.
Your friends and family will always be there to support you and your restaurant. Should you be placed in a situation where additional funding is needed, you can simply ask them a favor. This is an unsecured type of loan since you’re technically you’re just asking them out of their kindness and they’re actually on the losing side of the deal should you fail to pay them out.
If they share your vision of your restaurant and want to support your growth no matter what, they will offer you a loan with no equity at stay and no interest to pay. Just be clear on discussing the risks of this type of investment, and ensure that your relationship will not be negatively affected should there be further complications.
Factors To Consider Financial Options For Restaurants
With all the options presented, here are the factors that could affect your choice of funding source. Make sure that you will conduct a thorough study first before asking for their service.
- Lender or Partner
- How quick it will be processed
- The reputation of the lending company or investor
- Collateral required
- Payment options and schedule
Ways to Manage Your Restaurant Finances
Now that you know what are the different ways you can seek out additional funding, you must also know how to protect your existing resources. Here are some helpful tips you can apply to manage your restaurant’s finances properly.
- Create a budget, and stick to it.
- Establish a cash flow statement
- Track expenses in a secured platform
- Analyze daily reports
- Manage existing costs, such as labor costs, food costs
- Impose strict payment deadlines
- Prepare emergency business fund
- Reduce food costs