What’s the Greatest Advice We Can Give You On How to Start a Restaurant Business With No Money?
In case you don’t have time to skim through the entire post, here’s one of the most invaluable pieces of advice on how to start a restaurant with no money.
Get Enrolled In a Restaurant Food/ Kitchen Incubator:
What’s a food incubator? It’s a simple shared space where people collaborate to cook things, fulfill orders and learn from some of the experts in the F&B industry.
For incubator owners, the main benefit of conducting such programs is to get help from volunteers who aren’t in it for money. The kitchen incubator is part of a food startup that doesn’t have a lot of money to spend.
By joining hands with people in the startup industry, you will get experience. It’s the most important aspect of figuring out how to start online restaurant business – and that too, with little to no resources. Without experience, you will outspend your expenses in a matter of few months.
Start a Crowdfunded Campaign for Your Restaurant:
Some of the best restaurants were funded by people who heard about the startup through crowdfunding websites.
‘Field and Vine’ raised a little over $27,000 through their Kickstarter page. The Somerville-based restaurant owners didn’t have any money to go on with. While searching Google for ‘I want to open a restaurant but have no money,’ they stumbled over the idea of creating a page on Kickstarter.
While you are at it, make sure that you mention where the money will be going, and how you will be rewarding your restaurant backers, once everything goes according to the plan.
Getting Help from Local Restaurant Association:
If you need help on how to get money to start a restaurant, or how to start a restaurant with no money, don’t hesitate in contacting your local restaurant association.
These associations are set up to help people, like you, collaborate on a forum where issues related to F&B policies, startups, and such other variables can be sorted out. You will get free advice about small business lending, and the appropriate people to contact for getting started right away.
Since COVID, restaurant associations have been hosting online events. Be on the lookout for such Webinars, and virtual get-togethers to connect with like-minded people.
If you were to look for tips on how to start a restaurant business with no money, there’s a very real possibility that your queries will lead to a deluge of misinformation.
Substandard blogging platforms don’t really care about sharing anything useful, other than banking on organic visitors, DA scores, and some other nerd stuff. On that note, if you happen to be an aspiring self-starter who wishes to found his or her own food business with little to no guidance, this post is for you.
Now, do bear in mind that for anyone who tells you that it’s possible to start a restaurant business with no money these days, it’s not going to happen. By the term: “no money”, don’t get the notion that starting a restaurant business with $0 to spare is a dream come true possibility.
You WILL need some kind of petty cash, or loose change lying around before embarking on how to start a restaurant business with no money campaign. It’s not going to be easy, but your due diligence bundled with the tips that we have shared in this post, will get you started in few weeks, or maybe by the end of this month.
But What If There’s an Angel Investor Onboard?
Technically, it could help with your how to start a restaurant business with no money dilemma, but it’s more of a two-faced coin thingy.
An angel investor may or may not be a good option for any startup food business if the policies don’t work in favor of both parties.
There’s a slew of crafty investors who ensure that their initial investment remains safe and secure despite fallbacks on restaurant owners’ part. Especially, since COVID-19 healthcare policies were enacted recently, it’s not a great idea to borrow money from an angel investor or a bank for that matter.
If you are still not convinced, make sure that you have consulted with your lawyer before drafting terms and conditions that have to be reviewed by people from both sides. Make sure that there’s a dedicated clause that outlines the distribution of profit and loss percentages because startup restaurant business owners, or any other business owners for that matter, cannot bear the brunt of losses on their own.
Meanwhile, if you happen to be an investor, make sure that there’s enough wiggle room in your policies to allow your partner to work at full capacity. Don’t hound them with requests for constant updates and adopt a flexible approach that exudes performance at optimal levels.
How to Start a Restaurant Business with No Money| 5 best Tips for Aspiring Entrepreneurs in 2021
Okay, if you have decided to start a restaurant business in 2021, it’s a great idea.
However, you will face adversity and a handful of setbacks that might dissuade you from completing your journey. But, hey, only the worthy are rewarded, right?
Also Read: 7 Deadly Sins on Borrowing Money from Investors
Stick around long enough and work hard to succeed with your business. You’ll get there.
That being said, let us pose a quick question: why would you want to start a restaurant business today?
The answer is simple. People have to eat at some point at any given part of the day. This is basic human nature. We get hungry, we look for reliable food sources and that’s where restaurants come in.
Of course, your customer can just as easily prepare food at home. However, restaurants offer reliability, convenience, and fast food delivery options where an average customer only has to work his/her fingers to place an order. There are no more repeated trips to the kitchen, kids wailing in the background, or over-done food in the oven anymore.
Your customer knows that he can count on your services any time of the day.
Partner Up with a Food Delivery App or Service Provider:
The easiest way of how to start a restaurant business with no money is by partnering up with a service provider that handles food order deliveries, marketing campaigns, and literally every growth-centric thing on its own end.
You, on the other hand, only need to worry about preparing those incoming orders, while riders pick em’ up right off your kitchen.
To get started, you can sign up with a service provider that offers a virtual platform to scale your business. There are plenty of them in the market, but some of these aggregators are not meant for startup-level restaurant owners.
Blink Co. suits startups because of a nominal subscription model that favors restaurant owners more, instead of the other way around. You only need to pay a nominal flat fee on monthly basis (2% to 2.5%).
Many restaurant owners shut down after a mere 3 – 6 month tenure because of partnering up with a service provider that charges a fat fee, based on commission-style payments per order. This way, profits are already chowed down on by the service provider’s end – whereas, a restaurant owner scrambles to make ends meet.
To that effect, such “startup restaurant partners” also don’t give full access to customer insights. These insights are critical to your growth as a new fish in the market. If you are not able to pinpoint at least the most active amount of customers for a given time period in a day – and that too, for a select number of popular dishes on your food ordering menu, what’s the point of working as an operator?
Blink has a dedicated white-labeled portal with powerful hyper-marketing level access to customer analytics data. Give it a spin at Blink for Restaurant page to see how everything can scale up to empower you as a startup contemplating how to start a restaurant business with no money in 2021.
Getting Industry Overview is Critical to Future Growth:
According to ‘Profitable Ventures’’ Restaurant Business SWOT Analysis, there are approx. 4500 restaurants in the U.S. alone, that set up shop with high spirits. However, there’s a downward spike that attributes to calls for immediate foreclosure or shutdown because of a startup’s inability to operate successfully, external constraints, and other factors.
Top it all off with the COVID-19 healthcare restrictions, setting up a dine-in restaurant is like slicing off your own foot these days in hopes of running a triathlon! Don’t do that.
If you are too keen on setting up a real-life brick-and-mortar restaurant business despite healthcare institute policies looming in your customers’ faces, we salute you for your gumption. However, it’s best suited if you take the same sense of motivation and commitment to running a thriving restaurant business online these days.
Due to COVID alone, 80% of the restaurants are more than likely to shut down within the first few months of founding the business. It’s not fluff. It’s a stark reality.
Meanwhile, seasoned restaurant owners are happy that the U.S. government announced a liftoff on COVID-19 restrictions.
However, these businesses are struggling to get their employees back. According to ‘Wall Street Journal’, McDonald’s’ has announced fat paychecks, bonuses, and higher salary in hopes of winning their old employees back, and getting in some new ones as well.
But then again, where does a similar predicament leave you as someone who’s trying to figure out how to start a restaurant business with no money? You are more than likely to see yourself fulfilling orders, running marketing campaigns, making deliveries through unreliable delivery agents, contract-based employees, and vice versa.
In other words, it’s much better to start restaurant services online. If your business scales up, you can start your own name-brand food chain. But right now, it’s best if you stick with a safe approach.
Speaking of safe approaches on how to start a restaurant business with no money, sign up as a partner with a reliable services provider. Such aggregators will equip you with your own online white-labeled virtual space – bundled with a slew of ready-to-deploy menu templates and other perks in no time.
Don’t Invest in Creating Your Name Brand Restaurant App!
Even if you get an Angel investor or a bank to signup, don’t waste that money on creating your restaurant’s own app.
It’s not a bad idea to have an application, but a simple tool costs around $10,000 to $30,000 easily. Web developers don’t come in cheap. And if you are looking to hire someone who will create a bug-free, tighter than your grandma’s padlock food ordering portal with the latest security standards for your customers, think long and hard about it.
On top of that, the maintenance fee to ensure a smooth customer experience incurs additional expenses. You will also need to get your developers on releasing new bug fix patches from time to time to adhere to Google Appstore and Apple App Store’s ongoing policies. All of it comes at a cost.
Blink is your #1 Online Ordering Platform for Restaurants
Have a Food Business Plan at Your Disposal!
Speaking of a food business plan for startup-level restaurant owners, we have already published a post that covers the topic in depth. Be sure to give it a good read as it will definitely help you to deal with the start a restaurant business with no money situation in near future.
The key is to have a business plan that accounts for all sorts of possible expenses, challenges, and other variants that are often overlooked.
The key takeaway in this situation is to improvise because you are figuring out how to start a restaurant business with no money. Therefore, you can easily cut back on brick and mortar establishment costs, running expenses tied to utility bills, name-brand real-life business registration cost, and vice versa.
Only stick with those variables that can be shifted around to keep your initial investment to an all-time low. If you can manage to pull that off with a flat $0 to brag about later, hats off to you, buddy.
Operating Via Rental Kitchens:
Another great tip on how to start a restaurant business with no money is by exploring the incubators’ niche.
Also known as rental kitchens, these real-life facilities are great for self-funded and self-motivated startups who are strapped for cash because they can’t afford to spend too much on founding their own dedicated restaurant.
Incubators are owned by a single entity, but they house several small-scale name-brand restaurant operators, just like you, who work under the same roof. Find out such locations in your local vicinity and see if you can partner with them. The last thing you need to worry about is managing a handful of staff, utility bills, and other expenses.
Yes, you may need to get a supervisor and only a handful of people that will help you to deliver your orders, but that’s the least of your worries. Besides, if all else fails, you can pack up and leave, instead of losing a huge amount of someone else’s money that you took as an initial investment to fulfill your dream.
Also Read: Blink’s Exclusive Intake On Cloud Kitchens In 2021 For Startup Restaurants
The Cheapest Way To Open A Restaurant
If you’re looking to start a restaurant but don’t have a lot of money, there are some ways you can do it on a budget. One way is to find a cheaper location. You may not be able to get prime real estate, but you can still find an affordable place with good foot traffic. Another way to save money is to use less expensive ingredients. You can still serve quality food, but you don’t have to use the most expensive items on the menu.
Finally, you can cut costs by doing some of the work yourself. You can build or refurbish your fixtures and furniture if you’re handy. With some creativity and effort, you can start a restaurant even if you don’t have a lot of money. Being smart about your choices can keep your costs down and make your dream a reality.
Opening a new restaurant may cost hundreds of thousands of dollars. These are the costs of a modest eating establishment, such as a café or diner. You have financing alternatives if you don’t have enough money to finance start-up expenses.
Funding Based on Your Tax Structure
The first and most essential element to consider is whether you’ll be a taxable entity as a sole proprietorship, limited liability company, or corporation. After this decision, you can choose the financial method to employ.
An angel investor is a person or firm that helps provide financial assistance to a project or business plan. Traditionally, an angel investor will give you cash in exchange for partial ownership of your company.
Despite their holy name, these investors do not give money away since they are kind. These individuals believe in your business concept and expect to gain something back for their money.
Have a Business Plan Ready
If you are living in a city where a well-known businessperson invests in real estate or other projects, consider approaching them. Prepare yourself before you make contact. Make sure you have a well-planned written business plan with details on your concept, target audience, start-up costs, and projected sales.
A great business plan can be simple or complex, depending on the information you provide. It should include the type of restaurant you want to open, your targeted consumer demographic, and a detailed budget. Also, include your qualifications as a company owner if you have no restaurant expertise. Consider what other kinds of experience you offer.
Consider Operating a Food Truck
Starting a food truck might be less intimidating than opening a new restaurant. A used vehicle costs between $5,000 and $25,000, while a new one costs from $100,000 to over $200,000. Food trucks have the advantage of having almost no overhead. You don’t have to pay rent or electricity.
Social media on the hand may be used exclusively for marketing, eliminating the requirement for a website and other conventional advertising tactics. Food trucks are still time-consuming and demanding, but they are significantly less expensive to start up than typical restaurants and can be the cheapest way to open a restaurant.
Start With a Catering Business
Opening a new restaurant entails a lot of preparation, implementation, and financial investment. Doing some self-catering work is an easy way to get your feet wet and test-drive operating a restaurant. Menu planning, pricing, marketing, budgeting, food preparation, customer service, insurance, and bookkeeping are all necessary components of running.
What are The Challenges That You Could Possibly Face When Starting a Food Business In 2021?
Of course, it wouldn’t be a venture to brag about if you haven’t overcome your fair share of challenges.
A major challenge regarding how to start a restaurant business with no money is the existence of powerful players in your niche industry. Whether it’s a real-life restaurant you are looking to inaugurate or something that’s more of a virtual name-brand experience for online customers, you will have competitors with a well-established presence out there.
Why would a customer order food from you, when he or she can get something from another reliable online restaurant with hundreds of positive reviews?
You could mitigate such threats through viral marketing campaigns through social media, limited-time discount deals, and the menu of the day sass. But that’s not going to help a lot. Those big sharks will chow you down in no time.
Blink is your #1 Online Ordering Platform for Restaurants
An easy solution is to partner up with a food services provider that handles all the aforementioned constraints by banking on its own market presence. Since Blink Co already has plenty of business partners, with each of them having its own virtual space and a branded mobile platform to handle backend issues plus front-end customer inquiries.
Things are all hunky-dory from a meeting challenges perspective.
That’s a huge relief for entry-level restaurant owners. Find out more today at Blink for Restaurants webpage.
Moving on, a looming challenge for real-life restaurants is the economic churn that reduces buyers’ capacity to afford the lavishness of a walk-in dining establishment. Also, economic constraints and the country’s policies shifting on special food ingredients importation can hinder your ability to get your key items on time.
Other challenges are tied to marketing campaigns, sales, and budget management which do take up a decent size of an entrepreneur’s time. But that’s how businesses are founded and happen to last in the long run.
How Did It Go For You?
If you have some insightful comments on how to start a restaurant business with no money, we would love to hear from you. Go ahead and share your thoughts in the comments section below. There’s nothing like getting to hear from someone who had real-life first-hand experience with something.
Good luck and Godspeed to you!