Self Assessment for New Restaurant Entrepreneurs
The first place to start in the process of raising money for your restaurant is with a critical and honest self-assessment that takes inventory of your skills and abilities and also notes where you have gaps in your experience, credit, collateral and cash.
These are gaps that need to be addressed in order to create a complete funding package. By ignoring or downplaying gaps that do exist you will only be hurting your chances of raising the money you need. Therefore a very honest and very thorough self-assessment is the first step in the process.
One of the key factors in being able to raise money to start a restaurant business is having relevant experience in that business. An experienced operator already knows how to run a business and therefore significantly reduces the risk that business will be run poorly or that mistakes will be made that will cause the business to lose money or even cause it to go out of business.
Imagine two people pitching investors for money to open a new restaurant, one with 25 years of restaurant management experience and the other with none. Without knowing anything else, it is pretty obvious who you should bet on to get the money to open.
That is not to say that if you have little or no experience that you can't get funded it only means that you will have to take steps to mitigate your lack of experience by bringing in other people as advisers, managers and key employees who can fill in the gaps.
You also hopefully can augment the lack of specific skills with more general but still applicable experience you do possess.
Assessing your capabilities in a more general sense is important particularly if you don't have a whole lot of related business experience. For example if you have managed people but not a restaurant you still have management experience or if you have managed a profit center within a larger business you have experience in managing numbers which can apply to the management of your own business.
In considering your own capabilities you want to make a list of your accomplishments that relate to the business of running a business which would include in order of value transfer:
Owning your own business outside foodservice
Managing finances or accounting
Manufacturing or production processes
Customer service experience
Supply chain management
Anything requiring significant multi-tasking
A restaurant owner must be able to do things that relate to all of the above and so having some of these skills will transfer to being an owner.
If you have owned your own business in another field then you already know a lot of what will go into it. If you have managed employees you also already have experienced a big piece of the puzzle because even the smallest place needs more than one person and being able to train, motivate and manage employees is one of the most critical aspects of running a successful operation.