How many times has a friend or family member tasted your cooking and said to you, “You really should open a restaurant!” If you’ve ever given thought to cooking professionally, you’re not alone. Many people who apply for business loans are foodies who would like nothing more than to pursue their passion for cooking – and get paid for it. Getting the startup business loan, though, is only the first step on a long winding road to opening the doors of your very own eatery.
First, you must make the choice to either buy a preexisting restaurant or start from scratch.
Many would naturally think that buying a preexisting establishment, by using restaurant business loans, would be the obvious choice, but there are many downsides to this, believe it or not. A new owner can inherit such problems as a bad reputation, liability for previous owners’ bills and taxes, poorly maintained and broken equipment, dysfunctional management, existing health code violations and any naturally occurring problems with location. Are these the kinds of things that restaurant business loans should be put towards?
Starting a restaurant from scratch offers many advantages. Putting restaurant business loans towards a new establishment can provide the benefits of choosing the concept and gaining complete control of what the restaurant will become. This means deciding on the location, the menu, the theme, the dining room layout, the kitchen layout, everything. Plus, starting from scratch provides the benefit of having a blank slate in terms of reputation.
Once the restaurant business loans have been secured to start up an eatery from scratch, a strict, comprehensive budget must be made. This is to make sure that the restaurant business loans are spent wisely on the things that matter the most, such as the real estate, furnishings, renovations, management equipment like registers and computer software, commercial cooking equipment, employee wages, and beginning inventory.
Apart from spending restaurant business loans on these startup costs, it’s also important to obtain the right permits. Such permits include obtaining approval as an organization, Federal Tax Identification Number, proper zoning requirements, health inspections, and potentially a liquor license.