Your Questions About Investments In Restaurant

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Charles asks…

Which angel or capital investment provide capital for startup businesses?

I want to start a restaurant business however the bank want 50% of the startup cost upfront which I don’t have enough.

Justin answers:

Ojkingtamba, a restaurant is not an area of business which is of interest to an angel investor. Your best bet is to borrow from your parents, relatives or friends. An alternative might be asking the seller for seller financing of the transaction. If he tried to sell the restaurant for a while but was unsuccessful, then he might be willing to listen to your proposal.

Chris asks…

How do I review my Lease Aggreement to find out if the the premise has a greese trap?

As the title stated, I am in restaurant business. I’ve hired an attorney to reivew my lease aggreement, yet I don’t know if my premise contains a funtional grease trap. In what section of the lease aggreement should I look into?

Justin answers:

None; inspect the restaurant with the
landlord’s permission. IN areas where
expertise is required [these traps are an example], the leasee is obligated to know
what he is getting at his own risk and time
investment.

ASK for him [landlord] to accompany you
on a fast inspection.

Lots of physical things are not in a lease
that is why they state “……….inspection…”

John asks…

What are the impact fee’s for a new restaurant in Chicago, IL?

I’m looking into the possibility of opening up a restaurant in Chicago, IL. Does anyone know what the impact fee’s are along with any other pertinent fee’s/information such as Architect site plans if the place needs no modification?

Justin answers:

You should probably go about researching this a different way, if you’re serious. A restaurant is a big investment, and most fail.

Why would you need an Architect if you don’t plan to remodel/renovate? The design of your restaurant will not be the expensive part, the build-out will be, as well as all fixtures and equipment.

William asks…

How does a person get more working capital?

A friend of mine just starting a franchise restaurant in Jan and has been running in the red since then. The problem is that he is about $3k in the red per month, but only has about $15k in working capital in the bank. He already used his house to get the SBA loan to start the place and the startup was a lot higher than his franchise told him. Apparently they aren’t helping him much, so he is stressed as to how he can get some quick capital and survive through the year.

Justin answers:

Capital can come from individuals or firms specializing in venture capital funding. In either case you will be required to demonstrate that your business can become profitable (return on investment) in the foreseeable future. If you can answer the following questions with a yes, you will not have difficulty raising funds.

1) Is your customer base expanding?
2) Is your competition decreasing?
3) Is your reputation for quality and service better than that of your local competitors?
4) Are your operating costs under control?
5)You have not been in business long enough to have audtable records. How will you prove your revenue flow and costs.

GOOD LUCK

David asks…

How could I protect a classic, exotic automobile from a potential theft?

What do the owners of all of the world’s 250’s and Miura’s do to protect their investments? Why are they never stolen if they’re valued so much? There has to be a logical answer to my question.

Justin answers:

Even top of the line alarms won’t stop professional car thieves. Bottom line is, they’ll tow it if necessary.

Keep it garaged and have the garage alarmed. I have a motion detector set up in my garage for this purpose.

I also have a hidden kill switch. Can be set up to either kill the ignition or cut off the electric to the fuel pump.

I don’t park it any place that isn’t in a very public place and preferably where I can watch it if I’m at a restaurant.

I remember a company that had a electronically switched cutoff valve that connected to the fuel line. You had to use a key to turn it on and off.

One of my cars is carb’d and I cut off the fuel pump to it so that if it is stolen they’ll get about 100 feet and stall out in traffic. There is also a company that has a car-jacking fuel cutoff that does the same thing, it allows them to go a short distance and then cuts off the fuel.

Donald asks…

What is a good ROI for an investor that is a silent partner?

Some more facts:

* I’ll be running the business (a restaurant)
* I think that the parnter will invest a portion fo the business start up costs
* Partner will be a silent partner / not doing anything with the business

My QUESTION: What is a good agreement between both parties concerning ROI for the person that is investing int he business?

Justin answers:

Hi Dear,

Good ROI for sleeping partner is 20% or more of the investment.

As soecified food business normally need good ROI than other trading business.

Richard asks…

What kind of business is a good investment with 200K?

I have been thinking about buying a business my credit is 790 and I want to own something I do not know yet a restaurant laundry place or gas station or something else recommendations I mean I could buy something more expensive because I could borrow money from the bank any recommendations.

Justin answers:

Umm thats not a good idea if you don’t have an idea. Maybe you should spend some time researching the market for the next “bubble”. You’d be more successful with rental houses making over 20% ROI a month lol.

Paul asks…

What kind of business is a good investment with 200K?

I have been thinking about buying a business my credit is 790 and I want to own something I do not know yet a restaurant laundry place or gas station or something else recommendations I mean I could buy something more expensive because I could borrow money from the bank any recommendations.

Justin answers:

You are the only one that can figure that out. You need to think about something you like to do, complete a SWOT (Strengths, Weaknesses, Opportunities, and Threats) analysis and write a business plan to prove that the business idea is viable. Go to http://sba.gov/smallbusinessplanner/plan/writeabusinessplan/index.html or http://www.score.org/template_gallery.html for instructions on how to write a business plan and sample business plans.

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