If you live in a busy town, you’ve probably seen plenty of restaurants come and go. The industry’s popularity certainly doesn’t make it any less risky. There’s just so many reasons for a seemingly promising restaurant to fail. Right at the top is seasonality, or the drastic fluctuations in revenue experienced by restaurants that peak during the summer or holidays. Seasonality makes it difficult to keep a sufficient amount of employees on staff for the busy and slow seasons. And much like the industry itself, restaurant employees tend to come and go at the drop of a hat.
Then there’s the ongoing need for equipment, which has a lovely habit of breaking down at the worst time for your finances. Your target market likely prefers locally-sourced ingredients and an expansive drink menu. They don’t know how much the price of either feature has risen as of late. Actually, they might not know you at all if you neglect to consistently market yourself ahead of your busy periods.
Assembling the basic requirements for success might not be such a challenge were it not for the industry’s notoriously low profit margins. Increases in rent prices, wages and benefit mandates have reportedly shrunk these profits even further. For even the busiest restaurants, saving money for growth-related investments is nearly impossible.
Fundture Capital has many years of experience providing Small Business Loans for Restaurants, Bars & the Hospitality Industry. We can provide all types of business lending products. Contact us today for your FREE business funding consultation!