How to Finance a New Restaurant


If you are considering launching a new restaurant, you most likely have a background in hospitality. However, it does not matter if you are a talented chef or an experienced manager, opening a new restaurant will not be easy, to say the very least.

One of the biggest issues preventing you from opening your dream restaurant could be your financial circumstances. So, if you don’t have the savings to match your dream, you will need to prove to an investor that you have the vision, passion and talent to create a popular restaurant, which will be no easy feat. However, anything worth having is worth working towards, which is why you should read our top tips to financing a new restaurant.

How to Finance a New Restaurant

Gain a Business Management Degree

If you are serious about opening a new restaurant, you should take the necessary steps to one day open your doors to an influx of customers. One of the best ways to do just that is by returning to education to gain a degree in business management. Not only will this provide you with essential knowledge to run all aspects of a profitable business, but the degree will make you a more appealing prospect for an investor.

Understand Your Numbers

Do not seek investment until you know exactly how much it will cost to finance your restaurant. You must look at the outgoings, projected sales and the potential profit your restaurant could make in year one, two and five. Remember, a restaurant’s profit margin can start off quite small, and it can take time and dedication to reap the many rewards the hospitality sector can bring.

You must identify how much money you will require to launch a restaurant, because you will need to purchase business kitchen equipment, produce, marketing materials and utility bills. It is also essential you consider employees’ salaries, whether you will close your doors on public holidays or if you plan to serve lunch. Investors will not be afraid to ask tough financial questions about the opportunity, so provide honest answers that will instil them with confidence.

Choose the Right Partner

A business partner could also be a great way to finance a restaurant, because they have the capital and confidence to invest in your dream. However, it is important you only work alongside people you trust and ensure you both have the same vision and goals before you build your hospitality brand, or this could lead to an unhealthy relationship that could leave a restaurant in tatters.

Make a Loss to Enjoy the Rewards

The thought of someone investing in your restaurant might make you feel uneasy, because it is your dream, after all. That is why it is sometimes worth initially skipping your own salary, if possible, so you can repay your investors as soon as you can. Also, an investor will be more likely to finance a new business venture in the future, because they will trust you will make quick repayments.


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