Last updated on November 30th, 2017 at 11:15 pm -
Hey guys Sean Mory joining you for another session of LenCred Credit Geek Q&A. It is just going to be me today. Dustin is busy handling some of the new clients that we are starting ramp up a little bit with. Summertime is always busier time of the year for LenCred. We are also going to switch gears a little bit about what we are talking about during our sessions. We are still going to be answering your questions. We are going to try and appeal to the larger voice of small business owners and entrepreneurs. So our marketing department has started to look into questions you guys are asking on google.
The biggest one we have seen this week, one of the top two actually, is how to finance a startup restaurant? great question and I think is about 10% to 20% of the small business owners I speak with are doing business in the food industry. The first and biggest mistake I see is that a lot of people try to get all their capital in one place. They have some pretty unrealistic expectations. So the first rule of thumb if you have never borrowed that type of money before then don’t expect to borrow that type of money now without bringing some collateral or down payment money to the table. Second mistake I see a lot of people make is they are trying to purchase their building. I get it, you want to get that asset in place early on, but sometimes you have to be more realistic and start small and take bigger bites as you start to grow your business.
Now the first thing is equipment. Every single restaurant is going to need equipment.
A lot of times small business owners are like I need $40,000 to $50,000 for my ovens, for my overhead vents, and everything like that, you have to put in the grease traps, things to that effect. A lot of that equipment walk-in freezers, coolers, fridges, POS Systems (LenCred Merchant Services) which every restaurant is going to need more than likely. These equipment needs can sometimes be financed through equipment financing specifically. $25,000, $35,000, maybe even $50,000 on a term over two, three, or five years even can be a good way to take a $50,000 budget and cut it into a $20,000 budget. This can start making everything a little more realistic.
Now the second piece of this is make sure that you know your options, that you do not start jeopardizing and spending personal credit just hoping that you are going to be able to get the capital you need. You need to be strategic and start cutting back budgets anytime that you can. put together any basic business plan if nothing else. You do not have to be a business expert to put together a simplistic plan. There are companies like SCORE that you can go to that are previous small business who have retired that for free will help you. Our CEO has done some thought leadership with them. There are some great avenues like that but the last thing I will say here and wrap up, I want to get off my soap box here with you guys is make sure that you are asking questions and that you are doing your doing your research prior. Do not assume that you are going to be able to get what you want and start committing financially before you know you have the pieces of the puzzle in place and that you are going to be successful.
Thank you for joining us, hope that helps answer your question. Everyone have a great day!